Director General of the Debt Management Office (DMO), Patience Oniha, says another N100 billion Sukuk will be floated in December 2018. This is coming after the Federal Government had earlier issued an N100 billion in September 2017 for the construction of 25 economically important roads.
Sukuk or Islamic Bond is a financial instrument structured to generate returns to ethical investors without infringing on the Islamic law, which forbids interest payments.
“June was when the budget was approved and Sukuk is a project that was also approved in the budget,” she said.
“We will float it; we have made significant progress; we will issue it this year.”
The DG said the second tranche would be specifically for infrastructure development just like the first one issued in September 2017.
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Oniha said that the DMO was working with the Ministry of Power, Works and Housing on the projects earmarked for the second tranche of the N100 billion Sukuk bond. She also expressed optimism that the second tranche would be oversubscribed, based on the feelers from investors and the public.
“We still have auctions regularly, we issue FGN Bonds and they have been oversubscribed. So, whether liquidity is tight or not, we have got good demands,” she explained.
“Don’t forget we are selling good products when we do Treasury Bills and FGN Bonds.
“But in terms of Sukuk, I think from the feelers we have got from investors and the public, it is a product the people want to associate with.”
She noted that people would be more enthusiastic about the Sukuk because it’s for infrastructure.
Some of the roads funded by the first tranche include the Ibadan-Ilorin Road, Kolo-Otuoke-Bayelsa-Palm Road, Enugu-Port/Harcourt Road, Kaduna Eastern By-Pass, Kano-Maiduguri Road and Loko-Oweto Bridge over River Benue, among others.