The Debt Management Office (DMO) has urged investors to take advantage offered by the N150 billion Federal Government of Nigeria Sovereign 2023 Sukuk issuance and invest in the fixed-income instrument.
The call was made by the Director General of the Debt Management Office Ms Patience Oniha on Thursday in Abuja at the 2023 Sukuk Issuance Investors meeting.
The DMO Director General told investors at the occasion that the FGN Sukuk is specifically structured to ensure that all funds are utilised on infrastructure projects.
According to her, Sukuk encourages financial inclusion by providing an avenue for non-interest investors to participate in the fixed-income securities market.
“The Sukuk provides an opportunity to further develop the savings culture in Nigeria, particularly among individuals and other retail investors
“The Sukuk is an appropriate investment opportunity for ethical investors”, Ms Oniha further explained.
She pointed out that all categories of investors including Financial Institutions such as Deposit Money Banks, Asset Managers, Pension Fund Administrators, Insurance Companies, Ethical Investors (Non-Interest Banks, Takaful Stockbrokers), Corporate Societies, Religious Bodies, Government Agencies, Individuals etc, can invest in the Sukuk.
Ms Oniha stated that the instrument has low risk as the payment obligation under the Sukuk is an irrevocable obligation of the Federal Government of Nigeria, and in terms of liquidity, Sukukholders can trade the Sukuk on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited.
She noted that the Sukuk is classified as a liquid asset by the Central Bank of Nigeria (CBN) and therefore, qualifies as liquid assets for banks and other financial institutions, and the Sukuk investment certificate may be used as collateral for securing credit facilities from financial institutions.
The DMO, which is the Government agency responsible for managing the public debt, commenced the issuance of Sukuk in September 2017.
Through the issuance of Sovereign Sukuk, the DMO has raised and deployed ₦742.557 billion to the rehabilitation and construction of 4,000 kilometers of road projects and bridges across the six geopolitical zones and the Federal Capital Territory.
Proceeds from Sukuk are used by the Federal Government to develop infrastructure and achieve the associated multiplier benefits, and the financial instrument offers ethical investors an opportunity to invest in government securities.
It helps to achieve a higher level of financial inclusion, deepen the domestic financial markets, and set benchmarks for corporates and subnationals.
DMO on October 03, 2023, announced an Offer for Subscription of its sixth Sovereign Sukuk for ₦150 billion, and it is structured as a Forward Al Ijarah, for 10 years at a rental rate of 15.75 percent and enjoys similar features as the other Sukuk.
. TheWitness
