The Federal Government of Nigeria has recorded massive investor interest in its latest Sovereign Sukuk, with the Series VII attracting over ₦2.21 trillion in subscriptions. This figure, announced by the Debt Management Office (DMO) on Wednesday, represents a staggering oversubscription of 735 per cent, far above the ₦300 billion that was initially offered.
According to the DMO, the Sukuk offer was opened on May 12, 2025, and closed on May 20, 2025. Settlement took place on May 23, 2025. The Islamic bond, structured as a Forward Ijarah (Lease) Sukuk, offers a rental rate of 19.75 per cent per annum and will mature in May 2032.
Sukuk bonds, which are compliant with Islamic Shariah principles, provide investors with undivided ownership in specific government assets. These assets generate returns, which are then shared with the investors instead of paying interest like conventional bonds. Although rooted in Islamic finance principles, Sukuk is open to all Nigerians regardless of religious beliefs. The Securities and Exchange Commission (SEC) has explained that Sukuk conforms to ethical and just financial standards, making it an inclusive investment opportunity.
The DMO described the heavy demand for the Sukuk as proof of growing confidence in Nigeria’s capital market and in government-backed non-interest financial instruments. Since it was first introduced in 2017, the Sukuk has been an innovative tool for raising capital from a wide investor base while promoting financial inclusion across the country.
A circular released by the DMO confirmed that the oversubscription came from a wide range of investors, including retail investors, non-interest banks, commercial banks, pension fund administrators, asset and fund managers, as well as other financial institutions. This shows that the Sukuk is gaining popularity among different classes of investors seeking ethical, safe, and profitable financial instruments.
Just like in the previous series, the Federal Government plans to use the proceeds from this latest Sukuk to fund critical infrastructure projects across Nigeria. These include the construction of new roads, rehabilitation of old ones, and building of bridges in all six geo-political zones and the Federal Capital Territory (FCT). The DMO also linked the use of Sukuk funds to President Bola Ahmed Tinubu’s Renewed Hope Agenda, which identifies infrastructure development as a major pillar of national progress.
The DMO stated that its focus remains on offering safe, liquid, and ethical investment opportunities to Nigerians while supporting the Federal Government’s development goals. It also noted that Sukuk has become a reliable funding source for infrastructure, helping to fill the financing gap in a country where traditional borrowing avenues are increasingly pressured.
By tapping into Islamic finance instruments like Sukuk, Nigeria is also diversifying its sources of funding while promoting inclusivity in the financial sector. The massive response to the Series VII shows that investors are eager for financial products that offer competitive returns while aligning with ethical and developmental goals.
In recent years, Sukuk has played a vital role in Nigeria’s capital market by funding roads, bridges, and other infrastructure without adding to the conventional debt burden. Analysts believe this success reflects the growing sophistication of local investors and their willingness to support government initiatives that have long-term developmental impact.
With this oversubscription, Nigeria joins a growing list of countries that have successfully used Sukuk as a reliable tool for economic development. The DMO’s commitment to transparency and investor engagement has also helped build trust in the process, making future Sukuk issuances likely to attract even more attention.
As Nigeria continues to seek innovative ways to raise capital without overreliance on foreign debt, the Sukuk model offers a sustainable path forward. With its seventh successful issue, the Sovereign Sukuk is now a key part of Nigeria’s public finance toolkit, combining ethical investment with national development.
