Tinubu’s government  Fully Redeems First N100 Billion Sukuk

 

In a significant development for Nigeria’s financial and infrastructure landscape, the Federal Government has successfully redeemed its first Sovereign Sukuk bond worth N100 billion. Initially issued in 2017, this marks the complete repayment of both principal and rental returns to investors—underscoring the government’s commitment to transparency, infrastructure financing, and responsible debt management.

 

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Sukuk, often referred to as Islamic bonds, are structured to comply with Shariah law. Instead of earning traditional interest, investors receive rental income from tangible assets—such as roads or bridges—funded by the Sukuk proceeds.

 

In this case, proceeds from the N100 billion Sukuk were used to fund critical road infrastructure projects across Nigeria. The Central Bank of Nigeria (CBN) served as the Paying Agent, ensuring timely distribution of rental returns. At maturity, the government repurchased the infrastructure assets and made a final bulk payment to investors—completing the transaction.

 

The announcement was made during an Investor Meeting organized by the Debt Management Office (DMO) in Abuja. It also marked the official launch of the new N300 billion Series VII Sukuk, signaling the government’s ongoing reliance on ethical financing models to drive infrastructure development.

 

Ms. Patience Oniha, Director-General of the DMO, emphasized Nigeria’s improving economic outlook, citing Fitch Ratings’ recent upgrade of the country’s credit rating. She attributed this positive trend to ongoing fiscal and monetary reforms initiated by the Central Bank of Nigeria.

 

“There’s more transparency now. FX supply has improved, and exchange rates are stabilizing,” Oniha said. “The tough but necessary reforms are beginning to pay off.”

 

The full redemption of the Sukuk not only builds investor confidence but also highlights the government’s focus on sustainable, inclusive growth. By leveraging non-interest financial instruments like Sukuk, Nigeria is diversifying its debt portfolio and attracting a broader range of ethical investors.

 

As the country unveils the new N300 billion Sukuk, stakeholders can expect continued investment in infrastructure, increased market transparency, and steady progress toward macroeconomic stability.

New N300 Billion Sukuk Launched: Series VII continues the government’s focus on infrastructure through ethical finance.

 

Positive Economic Indicators: Improved FX supply, stabilized exchange rates, and a credit rating upgrade by Fitch signal renewed investor confidence.

 

Sustainable Growth Path: Sukuk instruments align with Nigeria’s commitment to responsible borrowing and long-term development.

 

The successful redemption of Nigeria’s first Sovereign Sukuk marks a pivotal moment in the country’s financial evolution. With continued reforms and strategic investments, Nigeria is poised to leverage innovative financing models to build a resilient and inclusive economy.