28 road projects to benefit from 2nd N100bn Sukuk

Following the success of the first N100 billion Sukuk Bond in 2017, the Federal Government, through the Debt Management Office (DMO), has unveiled the second N100 billion Sovereign Sukuk Bond with the offer expected to close on December 17, 2018.

The bond, which is aimed at funding road infrastructure across the six geo-political zones, is payable twice a year for seven years at a rental rate of 15.74 per cent to be due in 2025.

The breakdown of the projects shows the North Central will get N16.67bn with priority given to the dualisation of the SulejaMinna Road, dualisation of Obajana Junction to Benin Phase II and the construction of Oju/loko Oweto Bridge.

The North East will get N16.67bn and will see the amount expended on the Kano-Maiduguri (Sections II-IV) rehabilitation of Borno State.

The North West will see its N16.67bn touch on the KanoMaiduguri Road, dualisation of Kano-Katsina, Kaduna Eastern Bypass and Kano Western Bypass.

The South East’s share of N16.67bn will go to the rehabilitation of Enugu-Port Harcourt (I-III), rehabilitation of the outstanding section of Onitsha- Enugu Road.

The South South will have its N16.67bn sunk into dualisation of Yenagoa Road junction to Kolo-OtuekeBayelsa and the construction of Ikom Bridge.

The South West share will go to the reconstruction of the outstanding sections of Benin-Ofosu, pavement strengthening and asphalt overlay of Ajebande-Ijebu ode pavement.

Speaking at the sovereign Sukuk public offer-investor forum at the weekend in Lagos, Director General Road and the GwozaDamboa-Ngamdu Road in of DMO, Patience Oniha, said the success of the first N100bn Sukuk Bond launched in 2017 was down to the fact that the Nigerian financial market, as well as investors, were getting more sophisticated and interested in new things.

Oniha said the 2017 N100bn Sukuk, which was 5.8 per cent over-subscribed, ensured execution of road projects across all regions of the country, and that it affirmed investors’ confidence and created jobs.

She further said the main objective of the second Sukuk issue was to sustain the rehabilitation and construction work on 25 key economic roads in the sixgeopolitical zones with the roads now added for more reach.

Also speaking on the Sukuk II offer, Deputy Managing Director of FBNQuest Merchant Bank Limited, Mr. Taiwo Okeowo, said, ‘‘We are happy to be participating in this initiative which will contribute to narrowing the country’s deficit.”

Subscribers can purchase N1,000 per unit subject to a minimum subscription of N10,000 and in multiple of N1,000 with FBNQuest and Islamic Wealth Manager, Lotus Capital, managing the sales.

Just as the Sukuk II Bond was launched, the House Committee on Works also revealed that the bond had assisted in mobilising a lot of contractors handling various Federal Governments’ projects back to site.

Chairman of the committee Alhaji Ali Wudil, disclosed this when he led the committee members on an oversight visit to some projects in Kano State, most of which were executed under the Sukuk Bond.

Hon. Wudil said most of the projects had been abandoned for years, but that the Sukuk Bond had mobilised the contractors back to site.

He said, “As you can see, works are ongoing in most of the areas we visited and this is infrastructure possible because of the Sukuk Bond. Some of these projects were started since 2006 and are not yet completed due to unavailability of funds which has resulted to review upon review of the projects and you know what that entails. Nevertheless, at committee level, we are satisfied with the level attained and the quality of the jobs being executed.”

The Project Manager of Dantata and Sawoe, handling the Kano Western By-pass Mr. Roy Hungushi, told the committee that the 26.6km road awarded since 2007 at the cost of N13.2bn had now escalated to N22bn due to lack of funds that warranted for series of review.

Mr. Hungushi added that with the Sukuk, the company was able return to site and that with adequate funding the project would be completed in good time.

The committee visited about eight sites, most of which were funded with the Sukuk bond, including the multi-billion naira AbujaKano Road.