…Express optimism on N150 b Sukuk 
Emma Ujah, Abuja Bureau Chief
The federal government and investors are happy with Sukuk, the ethical instrument introduced by the Debt Management Office in 2017, the Director-General (D-G) of the Office, Ms. Patience Oniha, has said.

Speaking at a meeting with investors in Abuja, this afternoon, she said that the massive investment through which the federal government has raised N742 billion for infrastructure development across the country was an eloquent testimony of investors’ strong appetite for Sukuk.

Her words, “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.” 

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 D-G 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.

 She urged corporate organizations 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 utilized in the construction or reconstruction of infrastructure across the 6 geopolitical zones.
 
In his presentation, mMr. 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.

 “It does not waste time and the money is Escrowed to be used for the purpose only.  It is efficient because upon the completion of work, the Trustees give approval for payment.”

 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 2019 Global Competitive Index Report ranked Nigeria 130th out of 141 economies surveyed for quality infrastructure facilities.