The Securities and Exchange Commission (SEC) has commended the Debt Management Office (DMO) on arrangements to issue the maiden N100.0 billion Sukuk in the Nigerian Capital Market.
In a statement by SEC said the offer is, “a major milestone for Nigeria as it will catalyse the development of non-interest capital market products. The issuance of this Sukuk follows diligent advocacy efforts from the Securities and Exchange Commission (SEC) on the need to issue the instrument in order to serve as an alternative product for investors.”
It said Sukuk, the non-interest equivalent of bonds, was becoming increasingly attractive as a preferred option for funding infrastructure development and indeed economic growth across the globe.
Several countries across diverse continents have increasingly issued non-interest financial instruments to fund their infrastructure deficit. The trend is also fast gaining pace in Africa, with notable Sukuk issuances by South Africa, Senegal and the government of Cote d’Ivoire.
As the federal and state governments seek alternative funding sources for infrastructure, Sukuk is considered as a viable option.
In 2013, SEC issued rules on Sukuk issuance in Nigeria following which the State Government of Osun raised N11bn (about $50m) in Nigeria’s first Sukuk issuance which was oversubscribed.
“In ensuring that the Nigerian Capital Market plays a significant role in the success of Nigeria’s maiden sovereign Sukuk issuance, the Securities and Exchange Commission (SEC) supported the Debt Management Office (DMO) specifically in the area of capacity building and participation at the Capital Market Committee’s sub-committee on non-interest products” it said.
“This journey has led to this historic proposed issuance of Nigeria’s N100bn, seven-year Sukuk, which would not only facilitate the mobilisation and allocation of funds within the economy but would serve to position the country as a gateway for foreign and domestic investors,” it noted.
Follow the Neptune Prime channel on WhatsApp: https://whatsapp.com/channel/0029Va74ZvU2v1IqKByXoX3d
Do you have breaking news, interview request, opinion, suggestion, or want your event covered? Email us at neptuneprime2233@gmail.com
