The Debt Management Office (DMO) said yesterday that projects being financed with proceeds from N100 billion Sukuk bond represents a promise kept by the federal government.
Director-General of the DMO, Ms Patience Oniha, stated this while conducting on-the-site inspection of the road projects that are being funded with the N100 billion Sukuk bonds to determine the extent of work done.
The federal government had issued its debut N100 billion Sovereign Sukuk in September 2017, with a promise that the proceeds will be used to finance the construction and rehabilitation of 25 key economic road projects in the six geopolitical zones of the country.
The Sukuk, which has breathed new life into some old projects as well as provided funding for new ones, is a financing instrument that is appropriate for the development of infrastructure given that the proceeds from the issuance of Sukuk must be utilised for specific projects, which are agreed upon before the issuance of the Sukuk.
The DMO boss said, “Sukuk provides a clear link between Debt Management and economic growth and development. Investors, and indeed the general public, can visit the project sites to see the evidence of the work being done with the funds raised.
“The Sukuk-financed projects represent a promise kept and a step forward in Nigeria’s drive for the development of infrastructure in line with the Economic Recovery and Growth Plan (ERGP)”.
The inspection was done by some officials of the DMO, Federal Ministry of Finance and Office of the Accountant-General of the Federation. The Federal Ministry of Power, Works and Housing coordinated the visits.
The Team, after interacting with the various contractors handling the projects, discovered that significant amount of work had been done.
The contractors expressed their appreciation for the Sukuk, which assured them of prompt payment for work done.
Oniha also said the Sukuk fund has incentivised the contractors to accelerate work on the selected roads because of the confidence that the government had dedicated funds already in place to pay them upon completion of milestones.
She continued “Of particular significance is the fact that the funds from the Sukuk has made it possible to construct the Okene Bypass, a new road which would ensure a safer and more convenient journey for travellers and residents by moving traffic away from the township and reducing congestion on the roads within the town.
“Similarly, the Kaduna Eastern Bypass, whose construction had been delayed by inadequate funding, will ease traffic within the Kaduna metropolis, while also improving the travel experience for persons transiting through Kaduna to other towns”.
The government delegation is expected to also inspect all the Sukuk-financed Roads to confirm that the Sukuk funds have been utilised as planned.
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