The Debt Management Office (DMO), on Monday released the proceeds of the N130 billion Sukuk bond for the development of road infrastructure to the Federal Ministry of Works and Housing and Federal Capital Territory Administration (FCTA).

The Minister of Finance, Zainab Ahmed, and the Director General of the Debt Management Office, Patience Oniha, presented the N130 billion proceeds cheque to the ministries in Abuja.

According to a statement on DMO’s website, the federal government had issued the debut Sovereign Sukuk of N100 billion in September 2017, with a tenor of seven years.

The cheque were presented by Mrs Zainab Ahmed, the Minister of Finance, Budget and National Planning at a ceremony which held in her office in Abuja.

Ahmed noted that the issuance of sovereign sukuk, a project-tied debt instrument, is one of the many innovative and very successful initiatives of the present administration.

She said it was aimed toward financing development of critical infrastructure. Adding that the facts on how much the initiative had helped to improve road infrastructure across the country were glaring.

The report quoted, “As at date, this administration has invested the sum of N612.557 billion raised through Sovereign Sukuk between 2017 and 2021 for the construction and rehabilitation of key economic road projects.

“The projects are in the six geo-political zones and the FCT.

“In real terms, the amount has been used to construct and rehabilitate sections of 71 road projects covering 2,808 kilometers and four bridges by the FMWH.

“It has also aided the construction of sections of six road projects covering 99 kilometers and 19 bridges by the FCTA,” she said.

The minister said that FMWH and FCTA would be sharing N130 billion, being proceeds of 2022 Sukuk issue proceeds which was successfully issued by the DMO on behalf of the Federal Government.

She said that the release would form part of the 2022 budget, which implementation had been extended to March by the National Assembly.

“FMWH will get N110 billion and the FCTA will get N20 billion.

“The N130 billion will be released as part of the capital expenditure in the 2022 Appropriation Act, which has been extended by the National Assembly to March 31.

“As at November 2022, N1.88 trillion had been released as Capital Expenditure, which represents about 40 per cent performance when compared to the total Capital Budget of N4.7 trillion.

“This informed the need to extend the period to implement the capital component of the 2022 Budget,” she said.

In her remarks, the Director-general of the DMO, Patience Oniha said the present administration has invested the sum of N612.557 billion raised through Sovereign Sukuk between 2017 and 2021 for the construction and rehabilitation of key economic road projects in the six geo-political zones and the Federal Capital Territory, FCT.

She said the amount has been used to construct and rehabilitate sections of 71 road projects covering 2,808.06 kilometers and four bridges by the ministry of works and housing and sections of six road projects covering 99 kilometers and 19 bridges by the FCTA.

She explained that through the Sovereign Sukuk initiative, the DMO has demonstrated its strong alignment with the policy of President Muhammadu Buhari on infrastructural development.

Oniha said the instrument has also helped to deepen the capital market, created benchmarks for other borrowers and promoted financial inclusion by providing a retail product.

“The private sector and sub-nationals have begun to embrace the instrument and I look forward to seeing more issuances in this regard as this will provide additional asset class for the rapidly growing ethical investors and funds in the economy,” the DG said.

Speaking during the presentation, the Minister of Works and Housing, Mr Babatunde Fashola, said that the Sovereign Sukuk had contributed immensely to raising badly needed funds for roads projects across the country.

Fashola said that various construction companies, which had laid off many of the staff due to redundancy had recalled most of the staff members, partly due to the funding support from Sovereign Sukuk.

He commended the former finance minister, Mrs Kemi Adeosun, the incumbent Minister of Finance, as well as the DMO director-general for initiating and sustaining the Sukuk initiative.

The Debt Management Office (DMO) Nigeria is a government agency established to centrally coordinate the management of Nigeria’s debt. DMO is on a mission to meet the Government’s financing needs in a prudent manner that supports economic development, while proactively managing the risks associated with the public debt.

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