FMDQ OTC Admits N100 Billion Infrastructure Sukuk on Platform

Efforts to tackle the nation’s infrastructure deficit is yielding a reasonable result, as the Federal Government through the Ministry of Finance, and the Debt Management Office (DMO), last week, listed the ₦100 billion Federal Roads Sukuk on the FMDQ OTC Securities Exchange platform.

The seven-year, 16.47 per cent Ijarah Sukuk due 2024 and the first sovereign Sukuk in the Nigerian Debt Capital Market, is expected to encourage other arms of government, and the private sector to issue non-interest-bearing securities.

Already, government is said to have commenced the deployment of the proceeds of the bond into the construction and rehabilitation of designated roads across the six geopolitical zones of the country.

The Director-General, DMO, Ms. Patience Oniha, while addressing market participants at the listing of the instrument in Lagos, said the bond would boost business activities and enhance the quality of life in the country.

“The DMO in pursuit of its objectives to diversify the sources of government funding, and deepen the domestic capital market, successfully issued the debut N100billion 7-Year Sovereign Sukuk on September 26, 2017,” she said.

According to her, the Sukuk would integrate ethical investors into the domestic securities market, and help establish benchmark pricing of similar bond by other domestic issuers.

Furthermore, she added that it offers investors the opportunity to earn returns, while contributing to Nigeria’s infrastructure development.

Oniha said the proceeds were being deployed for the construction and rehabilitation of 25 key economic roads projects across the six geopolitical zones.

“The listing of the sovereign Sukuk on FMDQ will provide investors with the much needed transparent and efficient platform for price determination and liquidity, the bond is solely for infrastructure development, and people that invested in this bond have invested for the future.

She explained that the bond was also initiated to boost the financial inclusion programme of the government, and reach out to the unbanked people.

Oniha, however, assured all parties that the funds would be utilised judiciously, noting that DMO had commenced the inspection of various projects earmarked for the fund.

The Senior Vice President, Economic Development Division, FMDQ, Emmanuel Etaderhi, congratulated the issuer and co-sponsors to the issue, saying the issuance would further deepen the domestic debt market.

He pointed out that the issue would increase the range of investible debt securities in the markets, invariably contributing to the development of the nation, while reiterating the Exchange’s commitment to support DMO’s initiative towards the development of a highly liquid, deep and well-developed market.

He added that listing of the Sukuk on FMDQ would rightly position the nation to continue to maximise its potential through the Nigerian debt market.

By  Helen Oji

The Guardian Newspaper April 16th, 2018

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