The Federal Government has announced its intention to utilize the proceeds from its ongoing N150 billion Sukuk issuance to finance a total of 53 road projects nationwide.
Patience Oniha, the Director General of the Debt Management Office, revealed this information during an investors’ forum held in Abuja. These 53 road projects collectively span over 3,000 kilometers.
Oniha further explained that the tolls generated from these roads would be used to repay the Sukuk. Sukuk represents a non-interest, asset-backed bond that adheres to the principles of Islamic finance.
She reiterated the government’s commitment to prudent borrowing by employing project-focused Sukuk, which has resulted in tangible road and bridge developments.
Recognizing infrastructure’s pivotal role in economic growth, she stated, “infrastructure is an enabler of economic development.”
She expressed optimism that the N150 billion Sukuk would be oversubscribed, noting that the extra funds that may be realized will be used for available projects.
She said, “The government and people involved believe in the use of Sukuk and plan to continue offering it every year. The hope is that ethical investors will invest in the Sukuk.”
She invited ethical investors to take advantage of the opportunities present in Sukuk to participate in subscribing to the offer. She encouraged widespread participation, highlighting that Sukuk VI’s proceeds would fund projects across the country’s six geopolitical zones.
The DMO boss noted that banks are interested in sukuk because of “its tax-exempt status and the liquidity it affords them”.