Nigeria to Offer Sovereign Sukuk Ijarah Worth NGN 100 Billion for Ten-year Tenure

The Nigerian Debt Management Office (DMO) has announced, on behalf of the Federal Government of Nigeria, plans to raise NGN 100 billion (USD 226.6 million) through the issuance of Sovereign Sukuk Ijarah with a ten-year term in order to fund more road improvements across the nation, on the 21st of November 2022.

Why it Matters?

Ijarah Sukuk, which was first issued in Nigeria in 2017, is a domestic component of government borrowings and has given the Federal Government NGN 612,557 billion (USD 1388) to fund 71 roads and six bridges totaling 1,881 kilometres across the country. The new offering’s proceeds will only be utilised to build and repair important road projects within the nation’s six geographic zones. The money will be raised through the FGN Roads Sukuk Company 1 Plc, a special purpose vehicle that will use the net proceeds of the Sukuk to build the designated roads.

Details

• The Federal Government is backing the Sukuk, which are being issued at NGN 1,000 (USD 2.3) per unit with a minimum subscription of 10,000 units and in multiples of 1,000 after that.
• The DMO is in charge of managing and issuing Nigeria’s government debt, and the country last issued Sukuk in December 2021.
• The Sukuk are offered at 15.64% annual rate, with rental payments made every six months and the bullet payment (principal sum) expected to be made on the Sukuk’s maturity date on the 2nd of December 2032.
• The offering, which is currently available for subscription, will close on the 29th of November 2022, and listing will take place on the Nigerian Exchange (NG) and FDQ Securities Exchange after completion.