The Nigerian government has invested over N600 billion raised through sovereign sukuk in road projects across the country.
The Minister of finance, budget and national planning Mrs Zainab Ahmed, disclosed this at the symbolic cheque presentation ceremony of the 2022 N130 billion sovereign sukuk cheques to the Ministers of Works and House, Babatunde Fashola and his FCT counterpart Muhammed Bello yesterday in Abuja, Nigeria Capital.
The sukuk is a strategic debt instrument by the debt management office, DMO that supports infrastructure development, promotes financial inclusion and deepens the domestic securities market.
The Ministry of Works and Housing received N110 billion, while Federal Capital Territory administration was given N20 billion of the Sukuk funds.
Mrs Ahmed said the 2022 Sovereign Sukuk of N130 billion will be released as part of the capital expenditure in the 2022 appropriation Act, which has been extended by the National Assembly to March 31, 2023.
As at November 2022, N1.88 trillion had been released as Capital Expenditure, which represents about 40 per cent performance when compared to the total Capital Budget of N4.7 trillion.
“I am proud to say that the issuance of sovereign sukuk, a project-tied debt instrument, is one of the many innovative and very successful initiatives of this administration towards financing the development of critical infrastructure in the countr.
“The facts on how much the initiative has helped to improve road infrastructure across the country speak for themselves.
“As at date, this administration has invested the sum of N612.557 billion raised through sovereign sukuk between 2017 and 2021 for the construction and rehabilitation of key economic road projects in the six (6) geo-political zones and the federal capital territory (FCT).
“In real terms, the amount has been used to construct and rehabilitate sections of 71 road projects covering 2,808.06 kilometers and four bridges by the FMWH and sections of six road projects covering 99 kilometers and 19 bridges by the FCTA.
“The 2022 sovereign Sukuk of N130 billion will be released as part of the capital expenditure in the 2022 appropriation act, which has been extended by the national assembly to March 31, 2023. As at November 2022, N1.88 trillion had been released as capital expenditure, which represents about 40 percent performance when compared to the total capital budget of N4.7 trillion.
“This informed the need to extend the period to implement the capital component of the 2022 budget.
“It is important to add that besides the immense contributions of sukuk to the funding of critical road infrastructure, the objectives of deepening the domestic capital market and financial inclusion are being achieved by the government,” Ahmed explained.
Speaking, the Director-general of the DMO, Patience Oniha said the present administration has invested the sum of N612.557 billion raised through Sovereign Sukuk between 2017 and 2021 for the construction and rehabilitation of key economic road projects in the six geo-political zones and the Federal Capital Territory, FCT.
Road Projects And Bridges
She said the amount has been used to construct and rehabilitate sections of 71 road projects covering 2,808.06 kilometers and four bridges by the ministry of works and housing and sections of six road projects covering 99 kilometers and 19 bridges by the FCTA.
She explained that through the Sovereign Sukuk initiative, the DMO has demonstrated its strong alignment with the policy of President Muhammadu Buhari on infrastructural development.
Oniha said the instrument has also helped to deepen the capital market, created benchmarks for other borrowers and promoted financial inclusion by providing a retail product.
“The private sector and sub-nationals have begun to embrace the instrument and I look forward to seeing more issuances in this regard as this will provide additional asset class for the rapidly growing ethical investors and funds in the economy,” the DG said.
In his remarks, Mr Fashola said the Nogerian government was creating massive jobs in the construction sector by building roads and bridges.
He said the new releases would help to also significantly address Nigeria’s poor roads network.
Confidence Okwuchi
