Nigeria’s Debt Management Office has listed N100 billion, $278 million, 7-year, federal government Ijarah Sukuk with a rental rate of 16.47 percent on the floor of the Nigerian Stock Exchange.
Patience Oniha, the director-general, DMO, said the listing of the FGN Ijarah Sukuk bond is about financial inclusion and deepening of the country’s financial market.
“The Sukuk will encourage financial inclusion by providing an avenue for non-interest investors to participate in the fixed income market.
In addition, the Sukuk provides an opportunity to further develop the savings culture in Nigeria, particularly among individuals and other retail investors,” she said.
The director also noted that the FGN Ijarah Sukuk was designed to finance critical road infrastructure across the country. “The proceeds will be used to further support the construction and rehabilitation of 25 roads across the 6 geopolitical zones of the country”.
Sukuk are bonds structured to generate returns to ethical investors without infringing on the Islamic law which forbids interest payments. It represents an ownership interest in the asset to be financed rather than a debt obligation.
In his welcome remarks at the Facts Behind the Listing presentation by the DMO, Oscar N. Onyema, the chief executive officer of the NSE, said, “this listing lends credence to our commitment to championing and advocating for the growth of our debt capital market. It is a further affirmation of our unique platform to help both the Federal Government and businesses access capital. With a diversified investor base, our market offers issuers and their products access to capital and visibility, while delivering a transparent and liquid market to investors”.
“Today’s listing has strong implications for emerging and frontier markets which continually seek to unlock dormant pools of capital needed for economic growth and development, particularly as these economies have larger infrastructural deficits and relatively stronger demographics in favour of Islamic Finance, than developed markets”.