DMO Lists FG’s N100bn Sukuk on NSE

• DMO Lists FG’s N100bn Sukuk on NSE

The Nigerian Stock Exchange on Tuesday announced the listing of the N100bn, seven-year, Federal Government Ijarah Sukuk with a rental rate of 16.47 per cent on the floor of the Exchange by the Debt Management Office.

According to a statement from the bourse, Sukuk are bonds structured to generate returns to ethical investors without infringing on the Islamic law, which forbids interest payments. It represents an ownership interest in the asset to be financed rather than a debt obligation.

The Director General, DMO, Ms. Patience Oniha, said the listing of the FGN Ijarah Sukuk bond was about financial inclusion and deepening of the country’s financial market.

“The Sukuk will encourage financial inclusion by providing an avenue for non-interest investors to participate in the fixed income market. In addition, the Sukuk provides an opportunity to further develop the savings culture in Nigeria, particularly among individuals and other retail investors.”

Oniha noted that the FGN Ijarah Sukuk was designed to finance critical road infrastructure across the country.

“The proceeds will be used to further support the construction and rehabilitation of 25 roads across the six geopolitical zones of the country.”

In his welcome remarks at the Facts behind the Listing presentation by the DMO, the Chief Executive Officer, NSE, Mr. Oscar Onyema, said, “This listing lends credence to our commitment to championing and advocating for the growth of our debt capital market. It is a further affirmation of our unique platform to help both the Federal Government and businesses access capital.

“With a diversified investor base, our market offers issuers and their products access to capital and visibility, while delivering a transparent and liquid market to investors.”

According to him, the listing has strong implications for emerging and frontier markets, which continually seek to unlock dormant pools of capital needed for economic growth and development, particularly as these economies have larger infrastructural deficits and relatively stronger demographics in favour of Islamic finance than developed markets.