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Fashola Receives N100bn Sukuk Proceeds To Build 28 Economic Roads

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The federal government has presented a N100 billion cheque to the Minister of Works, Power and Housing, Babatunde Fashola for the rehabilitation of 28 key economic roads across the six geopolitical zones of the country, with each zone having a total allocation of N16.67 billion.

The N100billion is proceed of the Sovereign Sukuk (15.743% N100BN Al Ijarah Sukuk due 2025) that was issued on December 28, 2018 as part of the New Domestic Borrowing in the 2018 Budget to finance road projects. Based on the new releases, North Central: 6; North East: 5; North West: 4; South East: 4; South South: 6 and South West: 3.

The Debt Management Office (DMO) had announced over subscription of the N100 billion, 7-year 15.743 per cent Sovereign Sukuk Bond due 2025. This is the second Bond issuance in Nigeria, coming after the government raised N100 billion from debut Sovereign Sukuk to fund 25 national roads.

Announcing the successful subscription of the Islamic Bond, the DMO said it received subscriptions of over N132 billion from 2073 Investors, a feat director-general of the DMO, Patience Oniha said is an indication of investors’ confidence in the federal government project.

Minister of Finance, Mrs Zainab Ahmed presented the cheque to the Works Minister yesterday in Abuja, while expressing optimism that the funds will help to bridge infrastructure deficit in the country.

The Finance Minister remarked that the successful raising of the N132 billion “is for us, an indication of the wide acceptance of this financing programme.” She congratulated the DMO for successfully raising the funds.

The DMO director-general was full of joy for the investors and financial advisors for their confidence in the government. Commenting on the successful Issuance of the second N100 billion Sovereign Sukuk, Oniha said: “Sukuk has become a veritable tool for financing infrastructure which has several multiplier effects including job creation and boosting economic activities. In addition to being a viable tool for financing infrastructure, the Sovereign Sukuk promotes financial inclusion and the development of the domestic financial markets.”

Beyond raising money to fund special road projects not captured in the national budget, government says the programme is part of its drive for financial inclusion and creation of jobs to boost the economy.

In his remarks, Fashola highlighted the spiral benefit of the fund on the entire economic value chain promised to immediately handover the money to the contractors who were at the public ceremony for the symbolic presentation of cheque of N100 billion. “As soon as I collect this money, I am going to handover it to the contractors. The whole economy benefits from it. The most important people whom we have ignored as a nation – the miners, artisans will benefit from this,” he added.

 

 


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