FG raises N1.77tn Sukuk fund for Ibadan-Ilorin, Enugu-Port Harcourt, 95 other roads – Report

According to a report obtained by our correspondent, the Federal Government earned N1.77 trillion from sukuk bonds over a four-year period.
According to the report, the N1.77 trillion sukuk was raised between 2017 and 2021.

The sukuk bonds, which are sharia-compliant bond-like instruments used in Islamic finance, were issued to fund a total of 97 road projects throughout the country.

The Federal Government raised a N100 billion seven-year debut sukuk bond in 2017 to fund 25 road projects across the country’s six geopolitical zones.

The N100 billion sukuk bond was oversubscribed by about N6 billion by investors such as pension fund administrators, banks, and fund managers, with a total subscription of N105.88 billion.The Abuja-Abaji-Lokoja Road, Obajana-Okene Road, Suleja-Minna Road, Kaduna Eastern Bypass Road, Ibadan-Ilorin Road, Kolo-Otuoke-Bayelsa-Palm Road, Enugu-Port Harcourt Expressway, Kano-Maiduguri Road, and Damaturu-Potiskum Road were among the roads financed by the bond, according to the DMO.

In 2018, the Federal Government received over N132 billion in subscriptions for its N100 billion seven-year 15.74 percent sukuk offer from 2,073 investors.
The bond, which was created to fund road infrastructure across six geopolitical zones, is due every two years.

The Federal Government’s N150 billion sovereign sukuk bond, which was offered to investors in 2020, was oversubscribed by N519.12 billion.
The offer received a total subscription of N669.12 billion, representing a 446 percent subscription rate.

In the third sovereign sukuk, it said it allocated N162.57 billion to investors. The debt office said in a statement that the bond was in high demand from a variety of investors, including ethical funds, insurance companies, fund managers, and pension funds.

The DMO had also said, “The sukuk issuances are project-tied and are used to finance specific projects, which are disclosed to investors. It said the proceeds of the issuance would be used to finance 44 critical road projects across the six geopolitical zones of the country. The breakdown of the sukuk expenditure included eight roads for North-Central (N26.5bn), eight roads for North-East (N30.5bn), seven roads for North-West (N26.5bn), five roads for South-East (N26bn), six roads for South-West (N27.05bn) and 10 roads for South-South (N26bn).”

The money from the sukuk was used to repair the Outer Marina Road, which connects Lagos Island to Victoria Island, Falomo, and Ikoyi.
Between 2017 and 2018, the Federal Government spent N200 billion raised through sukuk bonds on 53 critical highway projects across the country, according to Abubakar Aliyu, Minister of State for Works and Housing.
According to him, 25 of these projects were funded in 2017 and 28 were completed in 2018.