Nigeria to issue several sukuks to fund infrastructure

May 23, 2016

The federal government is planning to issue these sovereign sukuks by the end of the year.

Nigeria will issue in 2016 several Islamic bonds to finance its infrastructure needs.

"The federal government is working on a sovereign sukuk with details expected within the year as part of diversifying its funding sources, Alhaji Mahmoud Isa-Dutse, Nigeria's permanent secretary of finance, told Reuters.

He added that these bonds will be linked to infrastructure projects such as power plants or railways.

Nigeria plans to borrow $10 billion from debt markets, with about half of that coming from foreign sources, to help fund a budget deficit worsened by the drop in oil prices and the weakened naira.

Nigeria's Securities and Exchange Commission announced in February the establishment of a committee to advise the country's authorities on the issuance of Islamic bonds.

In 2013, the country's Osun State had already issued a sukuk of ten billion naira (€44.7 million), which was listed on the Nigerian Stock Exchange and denominated in local currency.

In Nigeria, Islamic finance has a potential market of nearly 80 million unbanked Muslims.

Although the country has the largest Muslim population in sub-Saharan Africa, Islamic financial institutions have started to develop it some years ago. The first bank specializing in the field, Jaiz Bank, opened in February 2012 in Abuja.ADNFCR-2976-ID-801818853-ADNFCR