Sukuk: We’ll work with FCT, Niger Delta ministry on road projects, says DMO

The Debt Management Office (DMO) says road projects in the Niger Delta and federal capital territory (FCT) will take priority in the 10-year N250 billion road Sukuk instrument.

DMO is issuing the bond at a rental rate of 12.80 percent per annum, payable half-yearly.

Speaking on Monday at an event in Abuja, Patience Oniha, DMO director-general, said the federal government is working to improve infrastructure in the country.

Oniha said the government is working to improve revenue so that spending on further capital projects can be sourced locally instead of through loans.

“Sukuk is one of the instruments we use for borrowing. This is tied to some specific projects,” the director-general said.

“The exchange rate has been relatively stable. Monetary policies affect lending rates. The Sukuk we are looking to issue today is for roads and bridges. This time around, we are working with the FCT and Niger Delta ministry — they have road projects.

“That is why the Sukuk we are issuing is bigger. Policy-wise, the government is working to improve infrastructure and the borrowing is going into infrastructure.

“We are also focused on [enhancing] revenue so that the government can spend from there.”

In the nation’s capital, the route leading to Apo roundabout from the Aso Rock villa area is one of the roads to be funded by the bond.

Also, from Apo roundabout to mechanic village is another stretch of road that is meant to be covered by funds raised from issuing the Sukuk — the road, which is narrow, is known to record high volume of traffic.

In the Niger Delta area, the federal government is seeking to complete sections of the East-West road, which stretches from parts of Delta to Oron in Akwa Ibom state.

The DMO said there are also plans to dualise sections of the East-West road, while other ongoing road projects will benefit from the fund.

Greenwich Merchant Bank Limited, Vetiva Capital Management Limited and Stanbic IBTC Capital Limited are some of the issuers that investors can contact to subscribe to the bond.