The Federal government of Nigeria is set to use US $274.6m Sukuk bond to construct 642.69 kilometres of roads across in the country and further support the government’s capital spending on road projects already captured in the 2018 budget.
Minister of Power, Works and Housing, Mr. Babatunde Fashola confirmed the reports and said the cheque for the money was presented to him by the Finance minister, Zainab Ahmed.
Mr. Fashola added that the money will be shared equally among the six geo-political zones, each zone will receive US $45.6m for the number of roads to be completed in them. Six roads would be constructed in the North Central, five in the North-East, four in the North-West, another four in the South-East, six in the South-South and three in the South-West.
The Minister applauded that the impact of Sukuk bond would be felt on nation building through job creation, growth and employment. Federal Government contractors would be the first beneficiaries, which would in turn trickle down to suppliers of building materials, artisans, miners and steel companies.
Minister of Finance, Mrs Zainab Ahmed, said that there was a significant increase in the level of participation of retail investors from about 4% in 2017 Sukuk issuance to 17.3% in 2018.
“The objective of financial inclusion and deepening of investor base of the Federal Government securities were gradually being achieved,” said Mrs Zainab Ahmed.
Sukuk comes from the word Sakk, which means legal instrument, deed and cheque when translated. It can also mean to strike a deal on paper. The first Sukuk transaction took place in Damascus, Syria in the Great Mosque of Damascus back in the 7th century AD.
Ownership of an asset is clearly shown in sakuk. The Shariah law plays a major role in ensuring that the assets that back Sukuk are of good moral standard.