Why DMO raised N615.557bn Sukuk funds in 4 years

By Chioma Obinagwam

The Debt Management Office (DMO) has explained its reasons for raising N615.557 billion through Sukuk in four years.

Confiance News gathered from the Director-General of DMO, Ms Patience Oniha, in her presentation titled: “Nigeria Public Debt – Some Considerations,” at the Capital Market Correspondents Association of Nigeria (CAMCAN) 2022 conference in Lagos.

She said that it was for the rehabilitation and construction of new roads across the country.

Oniha said that a total of N615.557 billion had been raised through Sukuk from September 2017 to December 2021.

She noted that N365.557 billion of which had been deployed for the construction of 1,881km of roads and six bridges.

“The last Sukuk issued in December 2021 targets 71 road projects,” Oniha said.

She listed some of Sukuk funded projects as the reconstruction of Bida-Lambata road in Niger State, rehabilitation of Lagos-Ota-Abeokuta road in Lagos and Ogun states and rehabilitation of Enugu-Port Harcourt road section III Enugu-Lokpanta, in Enugu State.

Others are the rehabilitation and reconstruction of Enugu-Port Harcourt dual carriageway section II Umuahia-Aba in Abia State and rehabilitation of Kano-Katsina road Phase I, Kano State, among others.

A Sukuk is an Islamic financial certificate, that complies with Islamic religious law commonly known as Sharia.

It involves the means by which corporations or governments raise capital and the forms of investments that are made in accordance with Shariah.

She also said that a total of N25.69 billion had been raised through sovereign Green bonds from December 2017 to June 2019.

The director-general said that the funds had been deployed to seven selected projects in various sectors including renewable energy, agriculture, water, transport and afforestation.

Speaking on purpose for borrowing, Oniha said that governments borrow to finance budget deficits, finance specific projects and refinance maturing debt obligations.

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