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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