Yemisi Izuora
The Chief Executive Officer, CEO, of the Nigerian Stock Exchange, NSE, Oscar Onyema has commended the Management of the Debt Management Office, DMO on the successful issuance of the N100bn, 7-year, 16.47 per cent FGN Ijarah Sukuk, which was oversubscribed and largely driven by local demand.
Onyema said this is a strong attestation of the confidence investors have in the Nigerian economy and markets, and also opens up new financing windows for prospective issuers of capital, seeking more cost-effective means to diversify their funding sources.
In his remarks during the facts behind the listing of the FGN SUKUK Bond, the CEO noted, “As we begin to witness a rise in the demand for sustainable and more responsible investing in the global economy, we are also beginning to see a significant increase in the development of alternative asset classes.
The Islamic Finance industry for its part has grown from an estimated asset size of $2.1tn in 2014 to $3.4tn projected for 2018. As you may be aware, the central underpinning of Islamic Finance is in the promotion of ethical and responsible investment principles”.
Onyema stressed that increased awareness about ethical investing, changing demographics and rising populations, as well as increased infrastructural requirements, have been the key growth drivers of this industry, adding, “This has strong implications for emerging and frontier markets which continually seek to unlock dormant pools of capital needed for economic growth and development, particularly as these economies have larger infrastructural deficits and relatively stronger demographics in favour of Islamic Finance, than developed markets. In Nigeria, for example, the N100bn FGN Sukuk has been issued to fund the development and rehabilitation of key economic roads in the six geo-political zones of the country.
“We celebrate with the DMO and the entire team, for maintaining their commitment to coordinating the management of Nigeria’s debt, raising funds for financing government projects, and developing our Capital Markets. This listing lends credence to our commitment to championing and advocating for the growth of our Debt Capital Markets. With a diversified investor base, our market offers issuers and their products access to capital and visibility, whilst delivering transparency and liquidity to investors.
“I commend all parties to the offer on this significant milestone. I also thank everyone else who has provided support in making today’s listing a reality. It is against this backdrop that I wish to encourage everyone here, to take advantage of the available opportunities by partaking in and contributing to the growth of our market, through product innovations that meet strategic investors’ needs and appetite.
The Exchange remains committed to its collaboration with the Government and all market stakeholders, to collectively contribute towards the growth and economic development of the country”.
The DMO has over the years worked to develop well-functioning debt markets to bridge the long-term financing gaps in the expenditure outlays of the Federal Government at cheaper and more sustainable costs. Through the issuance of the FGN Savings Bonds for example, the DMO has raised over N7bn from the domestic market since March 2017. The $1.5bn, 30-year, FGN Eurobond and the $1.5bn, 10-year FGN
Eurobond issued in November last year by the DMO gathered an estimated bid size of $11bn and marked the largest ever Eurobond sale, as well as the longest-ever bond maturity issued by the Federal Government. Furthermore, the DMO’s subsequent issuance of the N10.69bn, FGN Green Bond in December 2017, the first by an African Sovereign and the first Climate Bonds Certified Sovereign Bond ever issued, underscores the Federal Government’s commitment towards achieving the nation’s climate change objectives.