The Minister of Finance, Mrs.
Zainab Ahmed, has handed over the N100 billion generated from last month’s
Sukuk issued by the Debt Management Office (DMO).
Speaking at a brief ceremony in
Abuja yesterday, she said the Sukuk was a demonstration of the federal
government commitment to funding the nation’s infrastructure by mobilising both
public and private funds to bridge the existing gap.
She stated: “The proceeds of this
second Sovereign N100 billion Sukuk will
also be deployed to financing infrastructure, in keeping with the Government’s
commitment to bridging the infrastructural gap.
“The proceeds will be for the
Construction and Rehabilitation of Twenty-Eight (28) key economic Road Projects
in the 2018 Budget. The Road Projects are located in the six (6) Geo-political
Zones of the country with each Zone having a total allocation of N16.67 billion.”
In his remarks, the Minister of Works Power
and Housing, Mr. Babatunde Fashola, pledged to immediately disburse the N100
billion to contractors working on 28 road projects across the country.
According to him, the money was
evenly disbursed to identified critical road projects with each geo-political
zone receiving N16. 7 billion.
The Director-General of the DMO,
Ms. Patience Oniha, who provided more details on the Sukuk, said that more
private investors were investing in infrastructure through Sukuk and other
federal government bonds.
Her team, she said, would step up
sensitization for greater participation, even among retail investors who
accounted for over 17 per cent of the last
issuance.
She also disclosed that the N100
billion Sovereign Sukuk issued in December 2018 was oversubscribed by N32.2 billion, explaining that it was part of the New Domestic Borrowing in the
2018 Budget to finance road projects across the country. It had a 7-year tenure
with 15.743% rentals and due in 2025.
According to her, Retail
Investors accounted for 17.33% of the Total Allotment compared to 4% recorded
in the debut Issuance, indicating that the stated objectives of financial
inclusion and deepening of the investor base for FGN securities, in addition to
infrastructure funding are being achieved.
Oniha added that the high level
of subscription and participation by a diverse range of investors demonstrate
the high level of investor confidence in the Fund, particularly, because the
road projects funded with the proceeds of the first Sukuk that was issued in
2017 were evident for all to see.
She said, “The Twenty-Five (25)
Road Projects, which benefited from the debut Sukuk have resulted in improved
transportation across the six (6) geo-political zones.”
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