The Federal Government of Nigeria earned N1.77 trillion from sukuk bonds over a four-year period (2017-2021). In Islamic finance, the sukuk bonds are sharia-compliant bond-like instruments. Throughout Nigeria sukuk bonds were issued to fund a total of 97 road projects during the period, Debt Management Office said in a report.
Across the six geopolitical zones of Nigeria, the government raised a N100 billion seven-year debut sukuk bond in 2017 to fund 25 road projects. However, the N100bn sukuk bond was oversubscribed by about N6bn by investors including pension fund administrators, banks and fund managers with a total subscription of N105.88 billion.
Debt Management Office said, “The Abuja-Abaji-Lokoja Road, Obajana-Okene Road, Suleja-Minna Road, Kaduna Eastern Bypass Road, Ibadan-Ilorin Road, Kolo-Otuoke-Bayelsa-Palm Road, Enugu-Port Harcourt Expressway, Kano-Maiduguri Road, and Damaturu-Potiskum Road were among the roads financed by the bond.”
While the Federal Government received over N132 billion in subscriptions for its N100 billion seven-year 15.74 percent sukuk offer from 2,073 investors in 2018. The sukuk bond is due every two years.
In 2020, the Federal Government’s N150 billion sovereign sukuk bond, which was offered to investors , was oversubscribed by N519.12 billion. The offer received a total subscription of N669.12 billion, representing a 446 percent subscription rate, report noted.
The debt office said in a statement that, in the third sovereign sukuk, it said it allocated N162.57 billion to investors. The bond was in high demand from a variety of investors, including ethical funds, insurance companies, fund managers, and pension funds. Furthermore, the money from the sukuk was used to repair the Outer Marina Road, which connects Lagos Island to Victoria Island, Falomo, and Ikoyi.
