FG Seeks Another N100bn Sukuk Bond To Finance Infrastructure
The federal government is to float over N100bn third Sukuk Bond in a bid to address infrastructure challenge. The government had successfully floated the first and second Sukuk bonds raising N100 billion from each exercise in the past.
But the Director General of Debt Management Office (DMO), Ms. Patience Oniha yesterday disclosed that government was perfecting arrangements to float another N100 billion Sukuk Bond to finance some infrastructure projects listed in the 2019 budget.
Oniha stated this at inaugural edition of the Islamic Finance Network (IFN) Nigeria Forum organised by the Nigerian Stock Exchange (NSE) in partnership with REDMoney Group in Lagos.
Sukuk are bonds structured to generate returns to ethical investors without infringing on the Islamic law which forbids interest payments.
Oniha said: “It represents an ownership interest in the asset to be financed rather than a debt obligation. It will be this year 2019 you God’s grace because the budget has been approved. The projects would be those included in the budget and the borrowing will also be what has been approved in the budget, part of new domestic borrowing. So, it will be this year.” According to her, the second Sukuk bond (N100 billion Ijarah Sukuk) issued last December would be listed in July. She said the DMO needed to ensure allotment to all successful parties as well as commencement of the infrastructure projects before applying for listing.
“There are two conditions and I believe those two conditions have been met and we would list shortly, it may not be a ceremony.
“Once we agree, you know FGN securities are listed on two trading platforms, so once the other platform say we can list and trading will start without necessarily having an official ceremony we will do that.
Also speaking, the Chief Executive Officer of the NSE, Mr. Oscar Onyema, said that the Islamic Finance sector has grown noticeably over the years, from about $1.5 trillion dollars in 2016, to about two $2 trillion in 2018. Onyema, represented by Divisional Head, Trading Business, NSE, Mr. Jude Chiemeka, said that the figure was driven by growth in Islamic Banking assets as well as growth in Sukuk issuances.
“This growth has largely been concentrated within Gulf Cooperation Council region and in Asia. “However, recent data suggest that Islamic financing is beginning to take root in Africa, with issuers across Gambia, Sudan, Senegal, Ivory Coast, Togo, as well as Nigeria in more recent times,” Onyema said.