Nigeria Invests 100 Bln Naira Proceeds Of Sukuk On Road Construction
By Olumidagreaton January 10, 2019
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Nigeria plans to invest the 100 billion naira proceeds of its recent Sovereign Sukuk bonds to construct 642.69 kilometres of roads across in the country, the minister of finance has said.
Handling over the cheque for the money to the country’s minister of works, housing and power, Babatunde Fashola, Zainab Ahmed noted that the proceeds of the bond was meant to support the government’s capital spending on road projects already captured in the 2018 budget.
In his remark, Fashola said that the money was shared equally among the six geo-political zones, meaning that each geo-political zone would get 16.67 billion naira for the number of roads to be completed in them.
Giving a breakdown, he said that 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.
Thw minister said that the impact of Sukuk bond would be felt on nation building through job creation, growth and employment.
He also said that the Federal Government contractors would be the first beneficiaries, which would in turn trickle down to suppliers of building materials, artisans, miners and steel companies.
In addition, he said that the entire economy would benefit from it, as construction was a major driver of any economy.
Also, Ahmed said that there was a significant increase in the level of participation of retail investors from about four percent in 2017 Sukuk issuance to 17.3 percent in 2018.
She said that this meant that the objective of financial inclusion and deepening of investor base of the Federal Government securities were gradually being achieved.
Giving a breakdown of investors contribution to the funds raised, she said 40.69 per cent came from pension fund administrators, 17.5 per cent from Deposit Money Banks and 17.33 per cent from retail investors.
Also, she said that 11.65 per cent came from fund managers and non-bank financial institutions, 10.94 per cent from non-interest banks and 1.89 per cent of the fund came from other investors.
Also, the Director-General, Debt Management Office, Patience Oniha, said that the 100 billion naira Sovereign Sukuk was a seven-year bond and repayment would be due in 2025 at an interest rate of 15.74 percent.
Some of the roads to benefit from the funds from the North Central include; the dualisation of Suleja-Minna road by Salini Construction Nigeria Limited.
In the North -East, the dualisation of Kano-Maiduguri road, linking Kano, Jigawa, Bauchi, Yobe and the contractor is Mothercat limited.
Similarly in the North-West, the construction of Kaduna Eastern bypass would benefit from the funds and the project would be handled by Eksiogullari Nigeria Limited.
For the South-East, the rehabilitation of Enugu/Port Harcourt Road by CGC Nigeria Limited.
In the South-South, the dualisation of Yenegwe Road junction to Kolo/Otuoke to Bayelsa Palm by CCECC Nigeria Limited.
Finally, in the South-West Zone, the expansion of the Ibadan-Ilorin road by Reynolds construction company would benefit from the funds.