Nigeria is tapping into the Islamic finance market to fund its infrastructure development. The federal government has issued six Sovereign Sukuk, which are Sharia-compliant bonds, since 2017, raising a total of N742.557 billion. The funds have been used to rehabilitate and construct 4,000 kilometres of roads and bridges across the country’s six geopolitical zones and the Federal Capital Territory.

The Debt Management Office (DMO), which oversees the Sukuk issuance, is preparing to offer another N150 billion Sovereign Sukuk to address Nigeria’s huge infrastructure gap. According to the World Bank, Nigeria’s infrastructure deficit is 30 percent of its GDP, far below the international benchmark of 70 percent.

The DMO’s director-general, Ms Patience Oniha, said that Sukuk is one of the strategies for improving infrastructure and attracting ethical investors who want to invest in socially beneficial projects. She said that the Sukuk has similar features as the previous ones, such as a 10-year tenor, a 15.75 percent rental rate, and a minimum subscription of N10.

The Federal Ministry of Works, which is one of the implementing agencies of the Sukuk projects, said that the funds have enabled it to build 60 roads of about 3,200km so far. The director of the highway department, Umar Bakare, expressed optimism that the new Sovereign Sukuk will help to reduce the infrastructure gap. He also said that the ministry has maintenance engineers who monitor the quality of the road works.

As reported by, the DMO has 10 transaction parties for the Sukuk issuance, including BURAQ Capital Limited as the financial adviser, three issuing houses, two delegate trustees, two solicitors to the delegate trustees and two solicitors to the issue.

The representative of the Federal Capital Territory Administration appealed to the investors to have confidence in the federal government securities and support Abuja’s development as the face of the nation. He also requested more funds allocation for the FCTA for road construction.

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