* Islamic finance expert hails milestone as proof of Nigeria’s reliability in global sukuk market
Nigeria has successfully redeemed its N100 billion Federal Government Sukuk issued in 2018, reinforcing the country’s credibility in the global Islamic finance market and strengthening investor confidence in sukuk as a sustainable tool for infrastructure development.
The seven-year sukuk, issued in December 2018 to finance road construction across the country, was fully settled on December 31, 2025, with the Federal Government, through the Debt Management Office (DMO), paying the purchase price of the underlying sukuk assets to investors.
The development marks the second consecutive successful redemption of a Federal Government sukuk, underscoring Nigeria’s growing reputation as a reliable sovereign issuer in the emerging global Islamic finance space.
Analysts say the milestone is expected to improve Nigeria’s chances of attracting more domestic and international investors seeking ethical and asset-backed investment opportunities.
Commenting on the development, Prof. AbdulRazzaq Alaro, Professor of Islamic Law of Banking and Finance at the University of Ilorin, described the redemption as a major achievement for both the government and investors.
According to him, sukuk has proven to be a win-win financing instrument, offering investors stable and predictable returns while providing the government with an affordable and sustainable means of addressing infrastructure deficits.
“To date, over five thousand kilometres of roads across the six geopolitical zones of the country have been constructed through sukuk issuances,” Alaro said, noting that the instrument has played a critical role in tackling Nigeria’s long-standing challenge of infrastructural decay.
He added that the successful settlement of the 2018 sukuk sends a strong signal to the global market that Nigeria honours its obligations, a factor that could deepen the country’s integration into the international Islamic finance ecosystem.
Prof. Alaro, who was recently named the Nigerian Islamic Finance Person of the Year 2024/2025, an award organised by Muslim News Nigeria to recognise outstanding Muslim achievers, congratulated all stakeholders involved in the sukuk programme.
“Congratulations to all the stakeholders in the sukuk market, congratulations and long live the Federal Republic of Nigeria,” he said.
Since its debut in the sukuk market, Nigeria has increasingly relied on the instrument to finance critical road projects nationwide, positioning Islamic finance as a viable complement to conventional funding sources for national development.
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