In a strategic move to finance critical road and bridge projects across Nigeria, the Debt Management Office (DMO) has introduced a new N300 billion, 7-year Sukuk bond offering, with an annual rental rate of 19.75%.
The bond, structured as a Forward Ijarah Sukuk, is part of the Federal Government’s continued efforts to address the country’s significant infrastructure gaps through non-interest financing. According to the DMO, this latest Sukuk will mature in May 2032 and is available for subscription from May 12 to May 20, 2025. Settlement is scheduled for May 23.
Sukuk to Fund Nationwide Projects
Issued through the FGN Roads Sukuk Company I Plc on behalf of the federal government, the funds raised will be channeled toward constructing and rehabilitating roads and bridges across all six geopolitical zones of Nigeria. The objective is to enhance nationwide connectivity, stimulate economic activity, and support regional development.
Investors can purchase units of the Sukuk at N1,000 each, with a minimum investment of N10,000. Payments will be made semi-annually, and full repayment will occur at the end of the bond’s 7-year term.
Strong Legal and Regulatory Backing
This Sukuk bond enjoys full backing from the Federal Government of Nigeria and benefits from several regulatory advantages. It qualifies as an allowable investment under the Trustee Investment Act and is exempt from income tax obligations for eligible investors such as pension funds. Moreover, it is classified as a liquid asset by the Central Bank of Nigeria and certified by the Financial Regulation Advisory Council of Experts (FRACE).
Plans are also underway to list the bond on the Nigerian Exchange (NGX) and FMDQ Securities Exchange, making it accessible for secondary trading and improving liquidity.
Promoting Ethical Investment and Infrastructure Growth
This marks Nigeria’s eighth Sukuk issuance since 2017, with over N1 trillion raised through previous offers to finance infrastructure development. The Sukuk model aligns with Islamic finance principles and offers an ethical alternative to conventional borrowing, attracting a wide range of investors, including institutional and faith-based participants.
By offering a competitive return of 19.75% per annum, the government aims to broaden the investment base while accelerating infrastructural growth vital to economic transformation.
