FG issues N1.1trn Sukuk bonds for road projects

The Federal Government has issued six Sovereign Sukuk worth N1.1 trillion ($657.6 million) to finance 124 federal road projects in the country.

The Securities and Exchange Commission (SEC) Director-General, Dr Emomotimi Agama, said this at the ongoing International Islamic Capital Market Conference in Karachi, Pakistan, on Thursday, December 12, 2024.

A statement issued by the SEC quoted Agama as saying that the road projects covered over 5,820 kilometres across the six geopolitical zones of Nigeria.

He said the success rate made the Islamic Capital Market (ICM) stand out as a resilient and innovative tool for mobilising resources.

Agama described the issuance of sovereign Sukuk since 2017 as a key pillar responsible for the growth of the ICM in the country.

The SEC boss stated that the issuance had consistently been oversubscribed, with the subscription rate reaching as high as 441 per cent.

He disclosed that sub-national and corporate Sukuk issuances were also growing in the country.

DMO offers 2 bonds for subscription

Agama said: “Beyond Sukuk, the ICM segment in Nigeria offers diverse investment opportunities.

“From one registered fund in 2008, the segment currently boasts of 14 registered Halal mutual funds with a net asset value exceeding N105 billion as of November 2024.

“The NGX Lotus Islamic Index tracks 11 Shariah-compliant equities, while Nigeria’s first Islamic Real Estate Investment Trust – ChapelHill N-REIT highlights the potential of real estate investments.

“The prospects for Nigeria’s Islamic finance industry are underpinned by key growth drivers, both global and domestic.”

Agama said the growth of the ICM segment had come with some challenges including limited public awareness of Islamic finance principles, paucity of tradable instruments, and regulatory alignment across institutions.

He added that capacity-building efforts, particularly in Shariah governance and compliance remained critical to sustaining the growth.

The Star