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FG presents second N100b Sukuk proceeds for road projects

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Finance Minister, Zainab Shamsuna Ahmed

Minister of Finance, Mrs. Zainab Ahmed, yesterday presented the second tranche of N100 billion Sukuk cheque to the Minister of Power, Works and Housing, Mr. Babatunde Fashola, for payments to contractors handling some select road projects across the six geo- political zones.

The first N100 billion Sukuk cheque was presented to the Federal Ministry of Power, Works and Housing in the last quarter of last year for roads construction.

The Federal Government, on December 28, 2018, issued a 7-year N100 billion Sovereign Sukuk (15.743% N100billion Al Ijarah Sukuk due 2025) as part of the new domestic borrowing in the 2018 budget to finance road projects. The offer attracted significant interest from a wide range of retail and institutional investors with a total subscription of N132.20 billion, which represents a subscription rate of 132.2 percent.

The Director General of the Debt Management Office (DMO), Ms. Patience Oniha, who spoke about the offer, said retail investors in the offer accounted for 17.33 percent of the total allotment compared to 4 percent recorded in the debut issuance, indicating that the stated objectives of financial inclusion and deepening of the investor base for government securities, in addition to infrastructure funding, are being achieved.

“The high level of subscription and participation by a diverse range of investors demonstrate the high level of investor confidence in the financing product, particularly, because the road projects funded with the proceeds of the first Sukuk that was issued in 2017 were evident for all to see.

“The 25 road projects, which benefited from the debut Sukuk, have resulted in improved transportation across the six geo-political zones.

“The proceeds of this second Sovereign N100 billion Sukuk will also be deployed to financing infrastructure, in keeping with the government’s commitment to bridging the infrastructural gap. The proceeds will be for the construction and rehabilitation of 28 key economic road projects in the 2018 budget. The projects are located in the six zones of the country with each zone having a total allocation of N16.67 billion.”

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