The federal government has said it would finance the rehabilitation and reconstruction of 44 road projects across the six geopolitical zones of the country with the N162.557 billion revenue raised through its Third Sovereign Sukuk issued by the Debt Management Office (DMO).
The N150 Sukuk Bond of the federal government was oversubscribed by N669.12 billion.
Minister of Works and Housing, Babatunde Fashola made the announcement yesterday when he received the Cheque of N162.557 billion from the minister of Finance, Budget and National Planning, Hajiya ZaInab Ahmed and the director-general of DMO, Ms Patience Oniha in Abuja.
N100 billion each was raised through Sukuk Bond in 2018 and 2019 respectively. With the issuance of the Third Sovereign Sukuk, the FGN has raised a total of N362,577,000,000 all of which are for the rehabilitation and reconstruction of Road Projects across the six geo-political zones of Nigeria.
According to Fashola, eight roads in North Central will benefit from the projects worth N26.5bn; North East: eight roads: N30.5bn and North West: seven roads: N26.5bn. Also, the five roads that will be constructed in South East under the new capital projects execution will sot N26bn, while 10 roads in South South will take N26bn, with six roads in the South West to cost N27.05 billion.
“From the evidence of what has happened from Sukuk 1 and Sukuk 2, your trust is not misplaced. And it will not be misplaced in the 44 road projects that will benefit from this Sukuk,” the works minister added.
Meanwhile, the minister of Finance has disclosed that the total capital releases to date is N995.665 billion (including the Sukuk). She stated that the N162.557bn Sukuk funds is strictly dedicated to the financing of road projects in the revised 2020 appropriation Act. “It also means that with the release of N162.557 billion to the Federal Ministry of Works and Housing, the amount appropriated for Road Projects financed by Sukuk in 2020 Budget has been fully released,” Mrs Ahmed added.
DMO DG said the strong response to the Third Sovereign Sukuk for which a total Subscription of N669.12 billion was received for the N150 billion that was offered, which represents a subscription level of 446.08 per cent is indicative of good market awareness and acceptance of Sukuk as a financial product.
She therefore disclosed that the DMO plans to continue to use Sukuk and Green Bonds, both of which are project-tied, to support the development of infrastructure and other capital projects. “The extent to which the DMO can achieve this, would of course, depend on how much is allocated to projects in the Annual Budgets,” she added.
Finance Minister added that the administration is of the view that with the deployment of the Sukuk Funds, coupled with other Capital Releases and various interventions by the Government, the economy will be on the path to economic development.