By Chinwendu Obienyi and Adanna Nnamani (Abuja)
The federal government, through the Debt Management Office (DMO), has raised N2.205 trillion through the Sovereign Sukuk programme since its inception in 2017, reflecting overwhelming investor confidence in the non-interest, Sharia-compliant bond designed to finance infrastructure development across the country.
According to a circular issued by the debt office on Wednesday, the programme has recorded an oversubscription of 735 per cent, making it one of the most successful capital market instruments in the country’s recent history.
The latest in the series is a N300 billion seven-year Ijarah Sukuk, launched earlier this month to fund critical road and bridge infrastructure across Nigeria’s six geopolitical zones and the Federal Capital Territory (FCT).
According to the DMO, the sustained oversubscription underscores “investor appetite for the ethical instrument introduced in 2017 as an innovative strategy to expand the nation’s investor base and provide opportunities for broader participation in the capital market.”
An analysis of the Sukuk programme’s reach shows that it has attracted a diverse mix of subscribers, including retail investors, non-interest banks, conventional financial institutions, pension fund administrators, and asset managers.
Speaking on the development, DMO Director-General Patience Oniha noted that the first Sovereign Sukuk, issued in September 2017 with a target of N100 billion, closed at N105.878 billion after widespread public sensitization.
“From that modest beginning, the Sukuk has become a transformative tool,” Oniha said. “Between 2017 and December 2023 alone, the DMO successfully raised N1.09 trillion, which funded the construction and rehabilitation of over 4,100 kilometres of roads and nine bridges across the federation.”
She emphasized the tangible benefits of the projects, which include reduced travel time, improved road safety, job creation, and enhanced market access for rural farmers and communities.
The DMO further highlighted the Sukuk’s unique dual-value proposition: while supporting national development goals, investors also receive semi-annual returns through rental income under the Islamic finance Ijarah (leasing) model.
Oniha noted that the sustained success of the programme is built on public trust, market innovation, and strong collaboration with financial partners.
The issuance is supported by a consortium of financial advisers and issuing houses, including Lotus Financial Services Limited, Buraq Capital Limited, Stanbic IBTC Capital Limited, Greenwich Merchant Bank Limited, and Vetiva Capital Management Limited.
These firms are instrumental in structuring the Sukuk, managing the offering process, and facilitating investor engagement.
As Nigeria continues to seek innovative and sustainable financing to address its infrastructure deficit, the Sovereign Sukuk stands out as a credible and impactful tool—marrying ethical finance with national development.
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