The Debt management office (DMO) has revealed that a large percentage of service providers that are benefiting from the increased level of activities and projects being financed by the Sukuk bonds are small and medium businesses.
According to DMO ,the benefits from the earlier Sukuk issuances, which were also used to finance roads construction, “included improved safety on the roads, faster travel times, access to markets for farm produce and opening up of parts of the country for development”.
The sale of the third tranche of the seven-year Islamic Sukuk, also known as as Ijarah, at a rate of 11.2 per cent opened in May. While announcing the result of the subscription of the offer on Friday, the DMO disclosed that the total subscription by investors was about N669.1 billion which represents a subscription level of 446 per cent of the N150,000 bond.
The Federal Government has issued a total of N350 billion seven-year debut Sukuk bonds used in financing the construction of almost 100 roads across the country geo-political zones since the program began in 2017.
The DMO said it expects to continue to raise funds through Sukuk to support improvement in infrastructure and development of the domestic capital market.
Demand for the Sukuk came from a wide range of investors, including ethical funds, insurance companies, fund managers and retail investors, amongst others. The participation by a wide range of investors aligned with the DMO’s objectives to diversify the investor base for the Federal Government Securities and promote financial inclusion
In 2017, the federal government also raised a N100 billion seven-year debut Sukuk bond for the financing of 25 road projects across the six geopolitical zones of the country, It raised another N100 billion in 2018 for a seven-year period for the same purpose.