The Director General of the Debt Management Office (DMO), Ms. Patience Oniha, has said the agency is looking at supporting projects that are revenue generating to service funds raised via Sukuk.
The federal government has raised about N362.6 billion through Sukuk issuances which is a Sharia-compliant bond. The proceeds have been used for road projects across the country.
Oniha said the Sukuk initiative by DMO Nigeria had been increasingly successful given the strong level of awareness that has been created.
“This success can also be attributed to the increased confidence from market participants given that the Sukuk bonds are tied to specific projects that can be tracked. Looking ahead, we recognise the need to upscale issuances to include other standalone projects beyond road infrastructure, but more importantly, we are looking to support projects that are revenue generating to service the Sukuk.
“Furthermore, there must be a focus on growing and diversifying the investor base for the Sukuk as well as other investment products,” she stated.
The road show with the theme: ‘Systemic restart: Islamic Finance in Nigeria,’ orgasnied by Nigerian Exchange (NGX) Limited in collaboration with REDMoney Group.
In his address, the Chief Executive Officer, NGX, Mr. Temi Popoola, who was the keynote speaker, said according to the Islamic Finance Development Report 2020, the Islamic finance industry’s assets grew by 14 per cent in 2019 to $2.88 trillion, returning to its long-term pattern of strong growth after the slowdown in 2018.
“In Nigeria, the Islamic finance sector continues to grow with increased interests from market participants and a growing number of players including two Islamic banks, four takaful insurance companies and several microfinance banks and managed funds.
“Following the issuance of the first Sukuk in Sub-Saharan African – the Osun State N11.4 billion 7-year Ijarah Sukuk in 2013, the increasing demand for ethical investments in Nigeria has further led to three successful Sukuk issuances totalling N362.6 billion by the Debt Management Office on behalf of the federal government of Nigeria from 2018 till date; all of which were largely oversubscribed and have been listed on NGX,” he said.
Popoola expressed NGX’s commitment to building this asset class, saying, the exchange would continue to provide an efficient and liquid market for investors and businesses in Africa, to save and access Shariah-compliant capital and investments.
“Our collaboration with RedMoney in convening the annual IFN Nigeria forum attests to our belief in the potential and importance of Islamic finance in catalysing inclusive economic recovery and a more sustainable global economic growth.
“We will collaborate with all market stakeholders to contribute towards the growth of Islamic finance in Nigeria and Africa at large,” he said.