DMO said the subscription level, which is 435 per cent of the amount offered (N150 billion), is an indication that the level of awareness of the product has increased and that investors are willing to support the financing of infrastructure.
In response to this strong demand for the Sukuk, the DMO said it has allocated N350 billion to the diverse investors who subscribed to the Sovereign Sukuk.
“The N350 billion will be used to finance the construction and rehabilitation of roads and bridges across the six geopolitical zones and the Federal Capital Territory.
“The DMO remains committed to meeting the needs of investors while also supporting the development of the domestic capital market,” the debt office said in the statement.
The DMO on October 3, 2023, announced the sixth Sovereign Sukuk offer for subscription. The Sovereign Sukuk in structure, is a forward Al Ijarah, for 10 years at a rental rate of 15.75 per cent and enjoys similar features as the previous Sukuk. The product has a minimum subscription of N10 (at 1000 per unit) and multiple of N1000 thereafter.
“The funds will be used to finance the rehabilitation of road projects and bridges identified by the implementing agencies of the federal government,” Oniha said at the meeting with investors yesterday in Abuja.
As of 2017 when the DMO first issued Sukuk, the federal government’s investment in roads and bridges was primarily funded through the national annual budget which was inadequate, and to some extent external borrowings, and other initiatives of the government. Consequently, the federal government, through the Debt Management Office initiated the Sukuk funding programme for financing road infrastructure in 2017.