The Nigerian Federal Government has authorised the FGN Road Sukuk Company 1 Plc (acting as an issuer on her behalf) to issue a 100-billion naira Sukuk. This facility has a 10-year maturity period. From today Monday 21st November 2022, interested investors are invited to subscribe until 29^th November 2022. The unit cost of the bond is fixed at 1,000 naira, and 10,000 naira is the minimum subscription that can be purchased. With a rental rate pegged at 15.64%, the rental payment will be due half-yearly, with the bullet repayment due on the maturity date (December 2032).

This Sukuk is structured on a Forward Ijara (Lease) instrument type in conformity with existing regulations and regulatory bodies. It is noteworthy here that, as its name suggests, this facility guarantees the use of these proceeds to construct and rehabilitate key road projects across the six geopolitical zones in Nigeria. As security, this alternative financial instrument is backed by the Federal government of Nigeria and will be listed on the Nigerian Exchange (NG) and FDQ Securities Exchange after completion.

This sovereign Sukuk is part of a series of Sukuk initiated in 2017 by the Nigerian government aimed at developing critical infrastructure, promoting financial inclusion, and deepening the domestic securities market. It also gives Nigerian investors, de facto, the opportunity to support the infrastructural development of their country. The previous Sukuk issuances have received strong interest from various investors, which materialised in sustained oversubscription given the increasing demand for non-interest bonds. Efforts have also been made to strengthen the public's awareness of this ethical investment instrument.

Furthermore, in Nigeria, sovereign Sukuk bonds are under the supervision of the Debt Management Office, the overseer of Nigeria’s government debt issuances and management. It provides further details about this Sukuk bond. According to the institution, this fifth issuance of 100 billion naira Sukuk takes the total amount of sovereign Sukuks bonds to 712.557 billion. The 4 four previous issuances, which were spent on 71 roads and 4 bridges covering a total of 2,820.06km across the country, are as follows: N100 Bn in 2017, N100 Bn in 2018, N162.557 Bn in 2020 and N250 Bn in 2021.

IFC NEWS