Nigeria is working out details for issuing a debut sovereign sukuk this year and may also sell a eurobond, the head of the country's debt office said on Friday.
Abraham Nwankwo said his Debt Management Office (DMO) had yet to determine the size of a potential sukuk deal and was working with the Securities and Exchange Commission (SEC), the central bank and the stock exchange to build capacity.
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| Nwankwo, DMO boss |
Nigeria, reeling from the plunge in vital oil revenues, has set up a government committee to advise on the amount to be raised from the Islamic bond sale, the timing and jurisdiction of issue, either domestic or foreign.
"We are definitely going to issue a sukuk this year. We may also likely issue a eurobond this year. We are working hard to put together all the necessary framework," Nwankwo told Reuters on the sidelines of a media briefing.
Nigeria plans to borrow as much as $10 billion from debt markets, with about half of that coming from foreign sources, to help fund a budget deficit worsened by the slump in oil prices that has slashed revenues and weakened the naira.
The government has said it wants to access concessionary sources to fill its funding needs, but any shortfall would be covered through the capital markets.
Issuance of a sovereign sukuk is part of a strategic plan developed by the DMO to develop alternative sources of funding and to establish a benchmark curve for corporates to follow.
Nigeria is home to the largest Islamic population in sub-Saharan Africa, with about half of its 160 million people Muslims. It is also home to one of Africa's fastest growing consumer and corporate banking sectors.
In 2013, Nigeria's Osun State issued 10 billion naira ($62 million) of sukuk, but no other sukuk transactions have followed.
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