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The Nigerian Stock Exchange announced the listing of the N100bn, seven-year, Federal Government Ijarah Sukuk with a rental rate of 16.47%. Director General of the Debt Management Office Ms. Patience Oniha said that the FGN Ijarah Sukuk was designed to finance critical road infrastructure across the country. She added that the proceeds would be used to further support the construction and rehabilitation of 25 roads across the six geopolitical zones of the country. According to Oscar Onyema, CEO of the Nigerian Stock Exchange, the listing has strong implications for emerging and frontier markets, which continually seek to unlock dormant pools of capital needed for economic growth and development.

The proceeds of N100 billion Sukuk are being applied to infrastructure development across Nigeria. Director General of Debt Management Office (DMO) Ms. Patience Oniha said that the proceeds were designated for the financing of 25 road projects across the six geopolitical zones of the country. An inspector team visited Abuja-Abaji-Lokoja Road, Obajana-Okene Road, Suleja-Minna Road and Kaduna Eastern Bypass Road. During the inspection, the team assessed progress on the work that had been done as well as ongoing rehabilitation and construction works on the roads. Of particular significance is the fact that the funds from the Sukuk had made it possible to construct the Okene Bypass, which reduces congestion on the roads within the town.

To confute speculations about the N100 billion Sukuk, the Nigerian government said the money was intact in the appropriate account opened for it at the Central Bank of Nigeria. The Minister of Finance, Kemi Adeosun, earlier said the fund will be used to finance the construction of 25 key road projects across the county’s six geo-political zones. She said each of the zones was to benefit about N16.67 billion for road projects in their respective domains. After a month no money has been disbursed to contractors to start the construction works, which fuelled speculation that the money may have been diverted by the government. Director of the Debt Management Office, Patience Oniha, said the Sukuk was not available to government for general spending purposes, but went directly into the account opened for it. Although she did not say the exact time the process for the disbursement will be completed, she assured that once the contractors fulfil the requirements, the disbursement of the money would commence.

In Lagos, the Debt Management Office started a national road show last week in preparation for the issuance of the much awaited N100bn non-interest bearing Sukuk bond.
The Office said in a statement, that the road show led by the Director-General, Ms Patience Oniha, would also be held in Kano, Kaduna and Port Harcourt. It said the team would be accompanied by its financial advisers, Lotus Capital Financial Services Ltd. and FBN Merchant Bank Plc.
The road show is to create awareness about the sovereign Sukuk and sensitise target investors about its features and benefits. The Office had announced its intention to issue a sovereign Sukuk in the domestic market as part of measures to fund the 2017 budget deficit.