How Nigeria plans to spend 100 bln naira proceeds from Sukuk bond - debt office

Nigeria's Debt Management Office (DMO) has said that proceeds from the planned issuance of 100 billion naira debut Islamic Bond, Sukuk will be channeled toward building critical road infrastructure that will enhance the living standard of Nigerian.

The director general of the debt office, Patience Oniha, accompanied by officials of the West African country's Ministry of Power, Works and Housing are currently on tour of the country to market the bond to investors.

“This is one of several efforts to raise funds for specific projects and this is backed by the full faith of the Federal Government. This is a rental product to cater for segments of our society that require such services,” Oniha was quoted in a statement by the debt office.

Nigeria has targeted a total of 100 billion naira from the issuance of Sukuk bond, which is an ethical-based investment instrument in which rent is based on the investment bi-annually and the principal sum paid at the end of the seven-year tenor.

The team has already visited Lagos, Abuja, Port Harcourt and also intends to proceed to the north part of the country, where there is a concentration of large Muslim populace.

The debt office chief assured potential investors that the Sukuk was backed by the full faith of the Federal Government and was one of the avenues through which it intended to raise funds for capital projects.

Some of the projects to be funded from the proceeds of the bond are; the Loko Oweto Bridge, dualisation of a section of the Abuja-Lokoja road, dualisation of the Suleja-Minna road as well as the Kano-Maiduguri road.
Others are dualisation of the Kano-Katsina road (phase 1), rehabilitation of the Onitsha-Enugu Expressway, the Enugu-Port Harcourt road (section 1-3), and the dualisation of the Ibadan-Ilorin road (section 2).
The debt office has appointed Citibank local unit as its financial advisor for the bond.