Abuja: The Debt Management Office (DMO) announced that the recently issued Series VII Sovereign Sukuk, valued at N300 billion, has attracted N2.205 trillion in subscriptions. This represents a 735 percent subscription level, showcasing significant investor interest in the ethical financial instrument introduced in 2017.
According to News Agency of Nigeria, the DMO stated that the Sovereign Sukuk was launched as an innovative strategy to broaden the nation’s investor base and provide opportunities for all Nigerians to engage in the capital market. An analysis of the subscriptions revealed a diverse range of investors, including retail investors, non-interest banks, financial institutions, banks, pension fund administrators, and asset managers.
The DMO confirmed that, similar to previous series, the funds generated from the issuance would be utilized by the Federal Government for the construction of new roads and the rehabilitation of existing ones. Additionally, the funds will support the building of bridges across the six geopolitical zones of the country and the Federal Capital Territory. The raising of funds through Sukuk for infrastructure projects aligns with the President’s Renewed Hope Agenda, which prioritizes infrastructure development.
The debt office emphasized its commitment to offering safe and liquid investment products to the public while supporting the Federal Government’s development plans. The News Agency of Nigeria noted that the DMO hosted an investor meeting on May 12 in Abuja for the issuance of the N300 billion Series VII Sovereign Sukuk.
Patience Oniha, Director-General of the DMO, highlighted that since its inception in 2017, Sukuk has become a preferred product for non-interest investors in the capital market. Oniha remarked that the acceptance of Sukuk attests to one of the DMO’s primary roles in developing the domestic capital market while also raising funds for the Federal Government.
Oniha reported that the Federal Government has successfully raised a total of N1.09 trillion through the Sovereign Sukuk since 2017 to support infrastructure development. She recalled that the first Sukuk was issued in September 2017, receiving a total subscription of N105.878 billion, exceeding the initial offer of N100 billion with a seven-year tenor.
Following the modest success of the first Sukuk and subsequent achievements from September 2017 to December 2023, the DMO has raised a total of N1.09 trillion. This amount has facilitated the construction or rehabilitation of over 4,100 km of roads and nine bridges across Nigeria and the Federal Capital Territory (FCT).
Oniha noted that these projects have produced substantial benefits, including reduced travel time, improved road safety, and job creation. They have also enhanced market access for remote farmers, increased access to public services like education and healthcare, and fostered overall economic development.
Furthermore, Oniha emphasized that the sustained issuance of Sukuk is due to its project-tied nature, its promotion of financial inclusion, and its contribution to the development of the domestic financial market. She highlighted that investors find fulfillment in contributing to infrastructure development while receiving a return on investment, paid every six months.
