FG hopeful N150bn Sukuk will be oversubscribed
By Patience Ikpeme
The Nigerian government is optimistic that its N150billion Sukuk bond offer will be oversubscribed.
The Director General of the Debt Management Office (DMO), Ms Patience Oniha made this known at a meeting with investors in Abuja yesterday.
Funds raised through the Islamic bond will finance 53 separate road projects including 3,000 km of roads, while tolls will be collected for repayment.
Oniha invited ethical investors to key into Sukuk bond, stressing that banks in particular are reaping the benefits of Sukuk because it is tax-exempt and the liquidity it offers.
Oniha stressed that infrastructure development was essential to attracting investors and economic growth, and that private funding was necessary due to government’s financial limitations.
Mr. Hassan Usman of Buraq Capital Limited and former Managing Director of Jaiz Bank, described Sukuk as an attractive ethical instrument because it is based on Islamic principles that promote ethical and responsible financing.
He said Sukuk avoids unethical practices such as interest-based transactions, speculation, and investments in prohibited industries such as alcohol, gambling, or pork-related businesses and adopts stringent project approval and disbursement mechanisms.
This means that before Sukuk funds are allocated to any project or investment, a thorough vetting process is conducted to ensure that it complies with Shariah principles and meets strict ethical standards. The funds are then strictly disbursed to serve their intended purpose, ensuring transparency and accountability.
Furthermore, Mr. Usman emphasizes the efficiency of Sukuk, suggesting that it is a well-established and effective financial instrument.
Sukuk provides an avenue for companies, governments, and organizations to raise funds from investors who adhere to Islamic principles.
The Sukuk will mature in 2033, offering a rental rate of 15.75% per annum.
