The Debt Management Office, (DMO) says the proposed N250bn sukuk will be used to finance key economic road projects identified by the Federal Ministry of Works and Housing, Federal Capital Territory Administration, and the Ministry of Niger Delta Affairs.
The DMO’s Director-General, Patience Oniha, said this in Abuja, on Monday, at a media sensitisation programme on the debt issuance, while inviting investors within and outside Nigeria to participate in the sovereign sukuk.
The offer is a 12.8 per cent, 10-year Ijarah sukuk due 2031, which opened on December 16 and will close on December 22, 2022.
Oniha said the government was working to enhance revenue so that spending on other capital projects could be sourced locally instead of through loans.
She said, “Sukuk is one of the instruments we use for borrowing. This is tied to some specific projects. The exchange rate has been relatively stable. Monetary policies affect lending rates. The sukuk we are looking to issue today is for roads and bridges. This time round, we are working with the FCT and Niger Delta Ministry — they have road projects.
“That is why the sukuk we are issuing is bigger. In terms of policy, the government is working to improve infrastructure and the borrowing is going into infrastructure. We are also focused on revenue so that the government can spend from there.”
She added, “In Abuja, the route leading to the Apo roundabout from the Aso Rock Villa area is one of the roads to be funded by the bond.
Also, from Apo roundabout to the mechanic village is another stretch of road to be covered by funds raised from issuing the sukuk. In the Niger Delta area, the Federal Government plans to complete sections of the East-West Road, which stretches from parts of Delta to Oron in Akwa Ibom State.”
The DMO also said there were plans to dualise sections of the East-West Road, while other ongoing road projects would benefit from the fund.
She also said the DMO had raised N2.89tn out of the anticipated domestic borrowing, adding that the balance of N250bn was what the sukuk offering was meant to achieve.
She also spoke on concerns that the country was on the road to a debt trap.
She said, “We’re not depending on one source of funding and the loans are concessional. The Chinese loans are less than $4bn.
“While we’re borrowing, we are also trying to increase revenues. You have to borrow to address the infrastructure gap. We are strongly focused on growing revenue.”
