By Matthew Tabe
The Director-General of Debt Management Office (DMO), Patience Oniha has disclosed that the N250 billion Sukuk funds presented to the federal government will be injected into roads project across the country.
She made the disclosure during the symbolic N250 Billion Sovereign sukuk cheque presentation held at the Federal Ministry of Finance Budget and National Planning, Abuja.
She said, “Be assured that the sukuk funds have been ring fenced and will be used to Finance the designated road projects to deliver results and benefits to the Nigerians populace.
According to her today’s event is for the presentation of symbolic cheques to the three (3) Ministries who will utilize the proceeds of the W250 Billion Sovereign Sukuk issued in December
2021.
She said, “it is significant in many respects, but suffice to say that, it is closely aligned with one of the strategic objectives of the administration of President Muhammadu Buhari GCFR, which is, the development of infrastructure.
The DG stressed that improvement in infrastructure due to its multiplier effects, is widely accepted as one of the best means of creating jobs, supporting and attracting new business and promoting overall growth and development.
“I am pleased to report that since the debut N100 billion Sovereign Sukuk in September 2017, the DMO has issued three (3) more, getting better each time and bringing the total amount raised through Sukuk so far to W612.557 billion.
“The introduction of Sukuk as a source of raising funds for Government has improved road infrastructure across the six (6) geo-political zones. The acceptance of Sukuk by investors and the verifiable evidence of its benefits has encouraged some State Governments and institutions to raise funds through Sukuk Issuance.
Mrs Oniha emphasized that there is so much to say about the impact of the Sovereign Sukuk in terms of contribution to road infrastructure and the development of domestic financial markets.
“These explain the increase in the size of the amount raised through Sukuk, number of projects covered and the number of implementing Ministries over the years. The level of investors interest in the product is evident from the subscription of over W865 billion received from diverse investors for the W250 billion offered.
The Minister of Finance Budget and National Planning, Hajia Zainab Ahmed during her speech said, “we have committed through the Federal Ministry of Works and Housing (FMWH), a total sum of N362.557 billion from 2017 to date to the funding of key road projects through Sukuk.
“In view of the significant milestones recorded in the use of Sukuk funds to reconstruct and rehabilitate our road infrastructure, which evidence is visible for all to see, the Government decided to incorporate other Ministries with critical road projects into the Sukuk funding structure. Today, we have the Federal Capital Territory Administration (FCTA) and Ministry of Niger Delta Affairs (MNDA) joining us.
She stated that the three (3) Ministries (FMWH, FCTA and MNDA) will be sharing the Sukuk Issue Proceeds of N250 billion, which was successfully issued by the DMO on behalf of the Federal Government of Nigeria as the Federal Ministry of Works and Housing – N210,565,OOO,OOO.00; Federal Capital Territory Administration – N29,OOO,OOO,OOO.00; and Ministry of Niger Delta Affairs N10,435,OOO,OOO.00
“The 2021 N250 billion will be released as part of the Capital Expenditure in the 2021 Appropriation Act, which has been extended by the National Assembly to March 31, 2022. As at November 2021, N3.40 trillion had been expended for capital, which represents over 74% performance when compared to the total Capital Budget of N4.569 trillion. Out of the N3.40 trillion so released, N2.98 trillion represents 83% of the provision for MDAs’ capital, N369.9 billion for Multilateral/Bilateral Project-tied loans, and N49.52 billion as GOEs Capital Expenditure.
According to her, the Government will continue to prioritize spending on critical infrastructure in Order to sustain the momentum on GDP growth. As you may be aware, the GDP is projected to grow by 4.20% in 2022.
“This can only be possible through steady increase in spending on critical infrastructures, such as roads. I wish to congratulate the DMO for the introduction of the Sovereign Sukuk and for the successes recorded in raising the funds through the product, which now stands at a total sum of N612.557 billion.”
