TheCable

The Debt Management Office (DMO) says it has returned the oversubscribed portion of the country’s N250 billion road Sukuk instrument offered in December 2021.

The sovereign Sukuk ended with a subscription level of over N865 billion. 

Patience Oniha, director-general of the DMO, said this on Thursday at a presentation ceremony held in Abuja.

The ceremony was organised to present cheques to beneficiary ministries.

In December 2021, the DMO had said road projects in the ministry of works and housing, federal capital territory administration and the ministry of Niger Delta affairs will take priority in the 10-year N250 billion road Sukuk instrument

According to Oniha, the 2021 Sukuk could not accommodate the oversubscription as it was part of the federal government’s borrowing plan, which was available in the budget. 

“Based on all the investor engagements we have done, and the popularity of the Sukuk product, we decided to go for N250 billion, and we got N865 billion,” NAN quoted Oniha as saying.  

“Sukuk is part of domestic borrowing in the budget; it is not an extra borrowing, so we took only the N250 billion that was available in the budget and returned the rest to investors.

“But we made sure that each investor who bid got something.” 

Oniha said the Sukuk product had gained investors’ confidence as a viable instrument for financing road infrastructure in Nigeria.  

“When we raised the money, it goes to the contractors after they have done the job,” the DG said. 

“It is one way to energise each party and to tell the contractors that we are in business and that when they do their jobs, their monies are ready.

“One fundamental achievement is the incremental growth that has been achieved with the Sukuk. We started with N100 billion in 2017, N100 billion in 2018, N162 billion in 2020 and N250 billion in 2021.

“The incremental growth and oversubscription in 2021 are a demonstration of confidence; it means that investors believe in the product.” 

Zainab Ahmed, the minister of finance, budget and national planning, said the N250 billion Sukuk fund would be released as part of the capital expenditure in the 2021 budget, which had been extended to March 31.

Ahmed assured that the federal government would continue to prioritise spending on infrastructure to keep up the growth momentum of the gross domestic product (GDP).

“As you may be aware, the GDP is projected to grow by 4.2 per cent in 2022. This can only be possible through a steady increase in spending on critical infrastructure,’’ she said.