Zainab Ahmed: FG has spent N612bn Sukuk funding on road projects in four years

Zainab Ahmed, minister of finance, budget, and national planning, says the federal government has invested over N600 billion raised through sovereign sukuk in road projects across the country.

Ahmed spoke at the symbolic cheque presentation ceremony of the 2022 N130 billion sovereign sukuk by the debt management office (DMO) in Abuja on Monday.

The sukuk is a strategic debt instrument that supports infrastructure development, promotes financial inclusion and deepens the domestic securities market.

The minister described the project as one of the most innovative and successful initiatives of President Muhammadu Buhari’s administration.

Last year, the DMO raised N130 billion from its N100 billion sovereign al ’Ijarah sukuk opened on November 21, 2022.

Speaking at the ceremony, Ahmed said the sukuk has helped in improving road infrastructure in the Nigeria.

She added that the N130 billion received would be released to the national assembly “as part of the capital expenditure in the 2022 appropriation act, which has been extended to March 31, 2023.”

The minister said the federal ministry of works and housing (FMWH) received N110 billion and the federal capital territory administration (FCTA) got N20 billion as of December 2, 2022.

“I am proud to say that the issuance of sovereign sukuk, a project-tied debt instrument, is one of the many innovative and very successful initiatives of this administration towards financing the development of critical infrastructure in the country,” Ahmed said.

“The facts on how much the initiative has helped to improve road infrastructure across the country speak for themselves.

“As at date, this administration has invested the sum of N612.557 billion raised through sovereign sukuk between 2017 and 2021 for the construction and rehabilitation of key economic road projects in the six (6) geo-political zones and the federal capital territory (FCT).

“In real terms, the amount has been used to construct and rehabilitate sections of 71 road projects covering 2,808.06 kilometers and four bridges by the FMWH and sections of six road projects covering 99 kilometers and 19 bridges by the FCTA.

“The 2022 sovereign Sukuk of N130 billion will be released as part of the capital expenditure in the 2022 appropriation act, which has been extended by the national assembly to March 31, 2023. As at November 2022, N1.88 trillion had been released as capital expenditure, which represents about 40 percent performance when compared to the total capital budget of N4.7 trillion.

“This informed the need to extend the period to implement the capital component of the 2022 budget.

“It is important to add that besides the immense contributions of sukuk to the funding of critical road infrastructure, the objectives of deepening the domestic capital market and financial inclusion are being achieved by the government.”

On her part, Patience Oniha, DMO’s director-general, said the agency has demonstrated its strong alignment with the policy of the president’s infrastructural development through the sovereign sukuk initiative.