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Officials of the Debt Management Office, Federal Ministry of Power Works and Housing, Federal Ministry of Finance and Office of the Accountant-General of the Federation have started the inspection of the roads being financed with the Sovereign Sukuk issued in 2017.
The proceeds of the N100 billion Sukuk were designated for the financing of 25 road projects across the six geopolitical zones of the country.
From the list of Road Projects made available to the public when the Sukuk was issued, these were major roads that will facilitate the movement of people, goods and services, thereby contributing to economic growth and development.
It would be recalled that the current Muhammadu Buhari administration had prioritised investment in infrastructure as a major focus in its plans for the growth of the economy and job creation.
The Sukuk represents a promise kept and a step forward in Nigeria’s drive for the development of infrastructure, which is in line with the Economic Recovery and Growth Plan (ERGP) launched by the Government in 2017.
The team visited the Abuja-Abaji-Lokoja Road, the Obajana-Okene Road, the Suleja-Minna Road and the Kaduna Eastern Bypass Road.
During the Inspection, the Team assessed progress on the work that had been done as well as ongoing rehabilitation and construction works on the roads.The Team interacted with the various contractors handling the projects. The inspection revealed that significant amount of work had been done and the contractors expressed their appreciation for the Sukuk which assured them of prompt payment for work done. The Sukuk has incentivised the contractors to accelerate work on the selected roads because of the confidence that the Government had dedicated funds already in place to pay them upon completion of milestones.
Of particular significance was the fact that the funds from the Sukuk had made it possible to construct the Okene Bypass, a new road which would ensure a safer and more convenient journey for travellers and residents by moving traffic away from the township and reducing congestion on the roads within the town. Similarly, the Kaduna Eastern Bypass, whose construction had been delayed by inadequate funding, will ease traffic within the Kaduna metropolis, while also improving the travel experience for persons transiting through Kaduna to other towns.
According to information made available, the Government delegation will inspect all the Sukuk-financed Roads to confirm that the Sukuk funds have been utilised as planned.
Analysts believe that this debut Sukuk has breathed new life into old projects and provided funding for new ones. It is, therefore, a financing instrument that is very appropriate for the development of infrastructure.
The N100 billion “7-Year 16.47 percent Ijarah Sukuk due 2024” was listed at The Nigerian Stock Exchange and the FMDQ OTC Securities Exchange yesterday April 10, 2018 for better secondary market trading and liquidity for investors.
The Sukuk Bond admission on FMDQ platform demonstrates Federal Government of Nigeria unrelenting commitment to the development of Nigeria’s infrastructure sectors through the Nigerian debt capital markets (DCM).
To formally welcome the listing of the pioneer Sukuk to its platform, the OTC exchange held a memorable ceremony to commemorate and honor the issuer, the FGN, represented by the Director General of the DMO, Patience Oniha, along with key representatives from the DMO.
Also present at the Ceremony were the co-sponsors to the issue on FMDQ and Registration Members of the OTC Exchange, FBNQuest Merchant Bank Limited, represented by its Managing Director/CEO, Kayode Akinkugbe and Lotus Financial Services Limited, represented by Hajara Adeola, Managing Director/CEO, and other parties to the issue.
Welcoming the guests to the Ceremony, Emmanuel Etaderhi, Senior Vice President, Economic Development Division, FMDQ, congratulated the issuer and co-sponsors to the issue.
He reiterated the OTC Exchange’s commitment to continue to support the initiatives of the DMO towards the development of a highly liquid, deep and well-developed DCM in Nigeria.
Patience Oniha, Director-General of the DMO, during the issuer’s special address, stated: “the DMO in pursuit of its objectives to diversify the sources of government funding and deepen the domestic capital market successfully issued the debut N100.00bn 7-Year Sovereign Sukuk on September 26, 2017. The purpose of the Sukuk is to integrate ethical investors into the domestic securities market, establish benchmark for pricing of Sukuk by other domestic issuers and offer investors the opportunity to earn returns while contributing to the infrastructure development of the country.”
Delivering the Registration Member (Listings) remarks, Kayode Akinkugbe, highlighted, “we are pleased to have advised the FGN on its N100.00bn debut Sukuk issuance, and despite fairly volatile market conditions, we leveraged FBNQuest Merchant Bank’s superb distribution platform to successfully distribute about 65percent of the offer. The N100billion Sukuk issuance is the first attempt by the Federal Government to raise funds through non-interest instrument in the capital markets for infrastructure development.”
Similarly, co-sponsor and Registration Member (Listings), Lotus Financial Services Limited, represented by Hajara Adeola, during her remarks stated, “The FGN N100billion Sukuk has been instrumental in financing road projects, while ensuring socio-economic development and financial inclusion. With this listing, the Sukuk will trade like other FGN securities through registered brokers and dealers on the Exchanges.”
Tumi Sekoni, Associate Executive Director, Capital Markets, FMDQ, whilst giving the closing remarks, applauded the issuer for achieving this milestone, stating that this was another highly laudable step by the Sovereign, through the DMO towards supporting the growth and development of the nation’s DCM.
HOPE MOSES-ASHIKE & IHEANYI NWACHUKWU
