Sukuk: We have raised N742bn to finance infrastructural development — DMO DG
The Director General of the Debt Management Office (DMO), Ms. Patience Oniha has stated that the agency has raised N742bn so far to finance infrastructural development in the country through Sukuk.
According to the DG, “Since its introduction in 2017, we have issued Sukuk each year, except 2019 and it has been very rewarding as N742 billion has so far been raised for infrastructure development through it.
“The federal government is happy and investors are happy, which explains the growing interests in the instrument.”
Speaking at a meeting with investors in Abuja, the DMO boss said that the federal government was determined to ensure value for borrowed money through the project-tied Sukuk, adding, “everyone can see the roads and bridges being constructed or rehabilitated through Sukuk.”
Ms. Oniha said that the federal government was giving infrastructure development the needed priority because of its critical role in the growth and development of any economy.
According to her, “Infrastructure plays a vital role in the socio-economic development of Nigeria. It facilitates and accelerates economic development, such that where there are no infrastructures, economic development and growth would be difficult to achieve.
“The Government has placed high priority on the rehabilitation and upgrade of existing road networks and construction of new highways, with a view to facilitating the movement of people and goods, thereby contributing to national economic development.
“When investors are coming, they are interested in the infrastructure in an economy. At a point businesses started moving to Accra because of infrastructure. Infrastructure is critical for economic growth and development. Infrastructure is an enabler.
“Sometimes when we talk about infrastructure, we hear comments like ‘government has not done enough.’ It is obvious that the government does not have enough resources to provide the infrastructure we need. That is why the government decided to attract the private sector to be part of funding infrastructure development.
“We introduced Sukuk, which is an ethical instrument, to enable investors who would not invest in the conventional instruments to be able to participate in private sector funding of infrastructure across the country.”
The DG expressed strong optimism that the current N150 billion issuance would be very successful, going by the level of interests shown by both corporate and individual investors.
The N150 billion 10-Year Ijarah Sukuk is due October 2033 with a rental rate of 15.75 per annum.
In Abuja, part of the Sukuk proceeds were applied in the construction of the road linking Galadimawa Roundabout through Garki Area 1 to CBN and the Southern Parkway, as well as, the road from the Villa Roundabout to Apo Junction.
The DG therefore urged corporate organisations and individuals to massively invest in the instrument, as part of their contributions to the infrastructure development of the country.
According to her, the proceeds of the Sukuk VI would be utilised in the construction or reconstruction of infrastructure across the six geopolitical zones.
Also speaking at the event, Mr. Hassan Usman of Buraq Capital Limited and former Managing Director of Jaiz Bank described Sukuk as a very attractive ethical instrument as its proceeds would be applied strictly to projects approved by the Trustees.
He said that the funds to be raised from the exercise would be subject to diversion because the Trustees would have to ascertain certificates of works done before disbursement would be approved to the contractors.
