– To fund 53 road projects with N150bn Sukuk bond in 2023
The Debt Management Office (DMO), on Thursday, disclosed that N742,557 billion has thus far been raised via sovereign Sukuk bond since its inception in 2017; in federal government’s efforts to address the infrastructure challenges in the country.
Muslim News gathered that Sukuk, also known as Islamic bond or Sharia-compliant bond is an Islamic financial certificate that represents a portion of ownership in a portfolio of eligible existing or future assets. They can be considered as an Islamic version of conventional bonds.
The director general of the DMO, Patience Oniha, made the disclosure in Abuja at the 2023 Sukuk issuance-investors meeting, where N150 billion was put on offer.
According to her, proceeds from Sukuk have been used to rehabilitate and build over 4,000 kilometers of roads and bridges spread across the six geo-political zones in the country.
Oniha tasked the investors to be part of the N150 billion Sukuk to ultimately augment the efforts of the government to tackle the decaying infrastructure nightmare.
She said: “Sukuk has helped in infrastructure renewal. The country often experiences slow growth and this is due to challenges around. Infrastructure renewal facilitates business.
“We issued the first one in 2017 and issued each year except in 2019. It’s part of borrowing for the new budget for infrastructure development.
“Some ask, why Sukuk? Well, it’s one avenue to make ethical investors come in and also widen financial inclusion.
“Our population is growing and we appreciate that our infrastructure is stretched. “Insufficient infrastructure in Nigeria has driven investors to Accra and we need to halt that. There is a master infrastructure plan and we are not resting but need to do more.
“Infrastructure has a multiplier effect. So, with Sukuk, everyone is involved. We need to attract the private sector. Infrastructure is one of those enablers of economic growth.
“The federal government has had many development initiatives but we have not seen too much of what we expect as citizens. Not all roads are owned by FG though as some are owned by states”, she explained.
On why roads are not tolled to ensure funds are available for routine maintenance, the DMO boss said the decision to toll or not was outside the purview of her organisation.
She also applauded the ethical investors fund created by the National Pension Commission (PenCom).
“We believe in Sukuk. What it has done can be seen. We plan to continue. Doing it yearly is something we believe in”, she said.
Oniha recalled that the Presidential Infrastructure Development Fund (PIDF) was created in 2018 by the Buhari administration and ongoing projects currently developed under it are; Abuja – Kano road, Lagos – Ibadan expressway and second niger bridge.
She also noted that the infrastructure for tax credit scheme was a good initiative as it encourages partnership with private companies where taxes are paid in advance to enable the government to invest in notable projects that would be beneficial to its citizens like what is going on in the road sector.
“The Infra Co is up and running. CBN, AFC, NSIA etc are shareholders. They’ll bring N1trn as seed capital and appoint fund managers all to improve infrastructure,” she noted.
Source: The Sun (Nigeria)
