Nigeria to sell N100bn debut sukuk this month - DMO

Nigeria plans to sell a 100 billion naira ($328 mln) debut sovereign sukuk in the local market this month to help fund road projects, the Debt Management Office (DMO) said on Tuesday.

The Islamic bond with a 7-year tenor will go on sale on June 28 for three days via book building, the DMO said. The bond will be tradable on the Nigerian Stock Exchange and on FMDQ over-the-counter platform.

Nigeria is home to the largest Islamic population in sub-Saharan Africa, with about half of its 180 million people Muslims. It is also home to one of Africa’s fastest-growing consumer and corporate banking sectors.

The DMO said the issue was “part of the plan to fast track the development of infrastructure and engage in ... projecttied capital raising.” It said Nigeria has challenges with road, railway and power infrastructures.

In 2013, Nigeria’s Osun State issued 10 billion naira worth of sukuk, but no other sukuk transaction followed.

The latest issuance is part of plans to develop alternative funding sources for government and to establish a benchmark curve for corporates to follow, the debt office said.

The planned sukuk issue will target retail and institutional investors, with First Bank and Islamic wealth manager Lotus Capital managing the sale.

Nigeria plans to borrow as much as $10 billion from debt markets, with about half of that coming from foreign sources, to help fund a budget deficit worsened by lower oil prices which have slashed government revenues and weakened the naira