Nigeria Opens N300bn Worth of Sukuk for Subscription
The Federal Government of Nigeria (FGN) has opened N300 billion worth of 7-year Sukuk for investors’ subscription at a rental rate of 19.75%, according to the Debt Management Office (DMO) offered document.
The Sharia-compliant investment instrument, Sukuk, offered with 7-year tenors ending in May 2032, was opened for subscription on May 12 and scheduled to close on May 20, according to DMO.
The DMO offer document showed that the minimum subscription has been set at ₦10,000 and in multiples of ₦1,000 per unit, thereby promoting inclusivity. The authority record showed that the Nigerian Sukuk program has seen consistent and growing investors’ interest.
The sovereign Sukuk has evolved into a key funding tool for Nigeria’s infrastructure development while promoting ethical finance and financial inclusion, AAG Capital Limited said in a commentary note.
Analysts highlighted that the strong demand and consistent oversubscription reinforce the instrument’s credibility, transparency, and broad investor appeal. The increasing oversubscription in the recent years signals deepening investor confidence and demand for ethical, government-backed securities.
Addressing the issue of oversubscription and the possibility of increasing offer sizes, the Director-General noted during today’s investors’ call that Sukuk issuances are tied to the funds allocated for infrastructure projects in the Federal Government’s budget.
Hence, future issuances will continue to be guided by budgetary provisions, even as investor demand remains strong. Since its debut in 2017, the Federal Government of Nigeria, through the DMO, has successfully issued sovereign Sukuk, a Sharia-compliant investment instrument designed to finance critical road infrastructure.
These Sukuk issuances have collectively raised ₦1.09 trillion, contributing to the construction and rehabilitation of over 4,100 km of roads and nine bridges across Nigeria’s six geopolitical zones, including the FCT.
AAG Capital Limited explained that sukuk are Islamic financial instruments that represent ownership in tangible assets or infrastructure projects, structured to generate returns without violating Islamic law, which prohibits interest (riba).
The firm said in a commentary note that Nigeria’s sovereign Sukuk follows an Ijarah (lease-based) model, where investors (pension funds, insurance firms, non-interest financial institutions, faith-based organizations, and retail investors) fund infrastructure projects (primarily roads) and earn semi-annual rental income until maturity, when principal is repaid. CSCS Shareholders Approve N8.8bn Total Dividend in 2024
