From Uche Usim, Abuja
Cheery news came the way of the federal government as the N250 billion Sovereign Sukuk whose offer opened on December 16, 2021 and closed on
December 23, 2021, recorded an unprecedented subscription level of over N865 billion. This outcome
represents a subscription level of 346% or oversubscribed by N615 billion
An analysis of the subscription data by the Debt Management Office (DMO) revealed high levels of subscription from banks and fund managers (including pension funds), as well as non-interest financial institutions, ethical funds, cooperative societies and retail investors.
The increasing level of participation by a more diverse and larger number of investors is a confirmation that the DMO’s objectives of issuing Sovereign Sukuk to grow the domestic investor base and promote
financial inclusion is being achieved. In addition, the high subscription level is proof of investors’ acknowledgement of the impact the N362.57 billion Sovereign Sukuk issued between 2017 and 2020
has had on the development of road infrastructure in Nigeria.
The DMO has reaffirmed that the proceeds of the N250 billion Sovereign Sukuk will be used to finance the rehabilitation and reconstruction of road projects across the six geopolitical zones and the Federal Capital Territory (FCT).
On how the money realised from the Sukuk offering will be spent, the Director General of DMO, Patience Oniha, said N200 billion will be allocated for specific projects.
“For the FCT, N37 billion was disclosed for those of us who live in Abuja. There is a Ministry of Niger Delta that has N75 billion included in those roads.
On whether the Sukuk deal was captured in the 2021 budget, she said “there is a N3.143 trillion of new domestic borrowing in the 2021 budget and the supplementary budget. We have raised the other money. What is remaining is N250 billion and that is Sukuk”.