In a strategic push to enhance Nigeria’s infrastructure and strengthen investor confidence in alternative financing, the Federal Government has announced a new ₦300 billion Sukuk issuance aimed at funding critical national road and bridge projects.
This latest sovereign Sukuk, the seventh since the initiative began in 2017 was unveiled on Monday by the Debt Management Office (DMO), as part of a broader plan to expand participation in non-interest financial markets and boost fiscal reforms through sustainable capital raising strategies.
Patience Oniha, Director-General of the DMO, highlighted the increasing sophistication of Nigeria’s Islamic finance landscape, pointing to a steady rise in investor awareness and participation. Speaking during a presentation to investors, she credited this shift to consistent government efforts in developing the domestic debt market.
“When we introduced the first Sukuk in 2017, investor familiarity was limited,” Oniha noted. “Today, the level of interest and understanding demonstrates how far we’ve come in building a more inclusive financial ecosystem.”
The current Sukuk issuance, which carries a 19.75% rental return, has a seven-year maturity period and will be repaid in full upon maturity. Rental income will be distributed biannually, offering a steady stream of income to investors.
Since inception, Nigeria has raised ₦1.093 trillion through Sukuk offerings, directing the funds toward the rehabilitation and construction of highways and bridges across the six geopolitical zones. This most recent ₦300 billion tranche will continue that mission, supporting priority infrastructure identified by the Federal Ministry of Works and the Federal Capital Territory Administration (FCTA).
The debt instrument qualifies as a government security under the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA), meaning investors will enjoy tax exemptions. Additionally, the Central Bank of Nigeria (CBN) recognizes the Sukuk as a liquid asset, and it meets requirements for trustee investments under Nigerian law.
In a bid to promote transparency and investor confidence, the bond will be listed on the Nigerian Exchange Limited (NGX) and the FMDQ Securities Exchange, enhancing accessibility and liquidity in the secondary market.
Oniha reaffirmed that Nigeria remains committed to maintaining investor trust across all its financial products—from Sukuk to Eurobonds and treasury bills. “We have made great strides in maintaining transparency and creating a stable investment climate,” she said.
She further noted the positive signal sent by Fitch Ratings’ recent upgrade of Nigeria’s credit rating from B- to B, attributing it to the government’s fiscal discipline and reform initiatives aimed at improving macroeconomic stability.
Despite public debt reaching ₦144.67 trillion by the end of 2024, Oniha assured investors that the government is managing liabilities prudently, focusing on spreading maturities and avoiding short-term repayment pressures.
“The focus is not just on raising funds, but on ensuring that debt service remains sustainable while driving real economic growth,” she explained.
Supporting voices from the private sector echoed the impact of previous Sukuk-funded projects. Ayo-Oluwa Aderibigbe of Stanbic IBTC Capital cited Lagos’s Marina road upgrades as a tangible example of the value derived from these instruments.
Meanwhile, Attahiru Maccido, Managing Director of Buraq Capital, emphasized that the current issuance will finance infrastructure projects specifically designated by federal authorities, ensuring accountability and targeted deployment of proceeds.
Oniha concluded by underscoring that the Sukuk model aligns with Nigeria’s commitment to ethical financing, investor inclusivity, and long-term development goals.
