…As FCTA seeks to increase debt burden by 287% in one year

…Senate backs FCT Sukuk borrowing, counsels Minister to focus infrastructure development on satellite towns

…DMO lauds judicious use of past borrowings 

Luminous Jannamike, Abuja

The Federal Capital Territory Administration has said it will borrow N200 billion from Sukuk fund in order to fulfill its mandate of building a world class nation’s capital city which reflects the dreams of its founding fathers as captured in Abuja Master Plan document. 

The borrowed money, Sunday Vanguard learnt, would be invested in infrastructure development within and around the Federal Capital Territory. 

The FCT Minister, Muhammad Musa Bello, made this known during the inauguration of the Technical Committee on proposed Sukuk issuance, justified the borrowing which had been condemned in some quarters as excessive.

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Dignitaries present at the ceremony were the Chairman, Senate Committee on the FCT, Sen. Abubakar Kyari; Chairman, House Committee on FCT, Rt Hon. Abubakar Garba Idris, represented by Hon. Iduma Igariwey; Senate Minority Whip, Sen. Philip Aduda and the Director-General, Debt Management Office (DMO), Patience Oniha.

Bello noted that the nation’s capital, has been witnessing the high influx of people from across the country which has overstretched the existing infrastructure and social amenities, stressing that with the resources available for the development of the Territory not matching the infrastructural needs, it has become necessary to seek an alternative source of funding outside the statutory allocation.

Meanwhile, findings by Sunday Vanguard reveal that FCTA’s total debt stood at N69.53bn as of March 31st, 2021. So, the proposed N200bn Sukuk borrowing means that the FCT Administration is seeking to increase its debt burden by 287.65 per cent in one year.

But the FCT Minister argues that borrowing does not only enable the government to finance critical infrastructure but also to power other aspects of the economy. 

Bello clarified that the N200bn Sukuk fund would be used to further support the government’s capital spending on water, street lighting and road projects already captured in the 2022 budget.

“Resources available for the development of the Territory no longer matched the infrastructural need, with a resulting fear that Abuja may not achieve the dreams of its founding fathers.

“For this reason, we needed to rehabilitate and expand some existing roads in the city as well as open up some others to arrest traffic gridlocks along major roads within and around the city and satellite towns. 

“Hence the need to seek for an alternative source of funding outside our statutory funding to finance the completion of some projects with huge capital outlay but with the potential for maximum positive impact on residents,” he said.

However, the Chairman, Senate Committee on FCT, Senator Abubakar Kyari, backed the Sukuk borrowing plan, and advised the FCT Administration to also focus on the development of satellite towns of Abuja to relieve the pressure on the city centre.

“The N200bn is just going to be like a drop (of water), but at least, it is a step in the right direction,” Kyari added.

With a total of four Sukuk issuances so far in Nigeria, the Debt Management Office has raised over N600 billion for the rehabilitation and construction of many road projects across the country. 

On her part, the DMO Director-General, Ms Patience Oniha, stated that previously issued Sukuk funds were being used judiciously, adding that the result visible in the projects being executed even in the FCT.

While noting that a N29 billion Sukuk had previously been approved for the FCT, Oniha maintained that Sukuk has proven highly instrumental to the development of infrastructure in Nigeria. 

“I think, for us, the excitement is that people are seeing the infrastructure. And when we came out the second time, we had things to show them that this is what we did with the money. I think that’s what Nigerians are asking for,” Oniha said.  

Meanwhile, the Committee’s Terms of Reference,  amongst others include; Developing a framework for accessing Sukuk fund for the FCTA; Review and advise on the procedure and options for obtaining sovereign Guarantee for the issuance of Sukuk; Prepare a budget estimate for the issuance and advise on requisite approvals.