The Debt Management Office (DMO) yesterday stated that based on documents recently received from the implementing Ministry for the road projects being financed from the proceeds of the Sovereign Sukuk, the Federal Government is currently processing the release of funds to contractors handling the various road projects.
The DMO explained that with this development, work on the roads will be further accelerated in line with the plans of the Federal Ministry of Power, Works and Housing to provide better driving experiences for motorists during the Christmas and New Year festivities.
It would be recalled that based on the structure of Sukuk financing, which is expected to be asset-backed and approval received from the sole regulatory body for non-interest financial products in Nigeria – the Financial Regulatory Advisory Council of Experts (FRACE), payment to the contractors constructing and rehabilitating any of the Sukuk roads can only be made based on the achievement of milestones, which would be supported by appropriate documentation.
The introduction of the Sukuk by the Federal Government as a financing instrument has been endorsed by several Nigerians because of its direct link between borrowing and project implementation.