Yemisi Izuora
The N100bn targeted by the Federal Government from the Islamic bond, Sukuk, will be spent on critical road infrastructure across the country, the Debt Management Office has said.
The Director-General, DMO, Patience Oniha, said this at various stops of the roadshow organised to drum support for the bond, according to a statement issued by the agency.
Oniha, alongside officials of the Ministry of Power, Works and Housing, told stakeholders in Lagos, Port Harcourt and Abuja that the N100bn was dedicated to building critical road infrastructure across the country
The sovereign Sukuk is an ethical-based investment in which rent is based on the investment bi-annually and the principal sum paid at the end of the seven-year tenor.
The DMO boss assured potential investors that the Sukuk was backed by the full faith of the Federal Government and was one of the avenues through which it intended to raise funds for capital projects.
“This is one of several efforts to raise funds for specific projects and this is backed by the full faith of the Federal Government. This is a rental product to cater for segments of our society that require such services,” Oniha added.
The Assistant Director, Planning and Development, Federal Ministry of Power, Works and Housing, Mr. Danlele Yila, listed 25 road projects spread across the six geo-political zones of the country, which the N100bn Sukuk capital would be used for.
Some of the projects include the Loko Oweto Bridge, dualisation of a section of the Abuja-Lokoja road, dualisation of the Suleja-Minna road as well as the Kano-Maiduguri road.
Others are dualisation of the Kano-Katsina road (phase 1), rehabilitation of the Onitsha-Enugu Expressway, the Enugu-Port Harcourt road (section 1-3), and the dualisation of the Ibadan-Ilorin road (section 2).
Tunde Adama of Citibank, one of the placement agents, who spoke after the first session, expressed optimism on the Sukuk.
“This is a new product, which means new opportunities, new investment. I am confident that it will do well, same with other financial instruments such as the FGN Bond, savings bond and the others that the DMO has always put on offer,” he was quoted as saying.
Benefits of investing in the Sukuk, according to the DMO, include safety, regular and tax-free income, and liquidity as it will be listed and traded on the Nigerian Stock Exchange and the FMDQ OTC Securities Exchange Plc, with offer for subscription slated for Thursday.