Nigeria said it plans to focus its new borrowing through the Islamic Sukuk Bonds on revenue generating projects to ensure that proceeds from such projects are used to service the Sukuk.
Director-General of the Debt Management Office (DMO), Patience Oniha said at a roadshow to launch fresh issuance of Sukuk Bond that the debt office recognises the need to upscale issuances to include other standalone projects beyond road infrastructure.
The DG who said the issuance of the Islamic bond had been increasingly successful given the strong level of awareness that has been created.
“This success can also be attributed to the increased confidence from market participants given that the Sukuk bonds are tied to specific projects that can be tracked.
“Looking ahead, we recognise the need to upscale issuances to include other standalone projects beyond road infrastructure, but more importantly, we are looking to support projects that are revenue generating to service the Sukuk.
“Furthermore, there must be a focus on growing and diversifying the investor base for the Sukuk as well as other investment products,” she stated.
Nigeria, which launched the initiative on Sukuk issuance has raised about N362.6 billion through the Sharia-compliant debt instrument.
The proceeds have been used for road projects across the six geopolitical regions of the country in a bid to ramp up infrastructural development.
The first Sukuk bond was launched by Osun State in 2013, worth N11.4 billion with 7-year tenor.
Since then, the DMO has raised N362.6 billion with the increasing demand for ethical investments in the country led to three successful Sukuk issuances by the federal government.