The Debt Management Office (DMO) has announced plans to issue a N300 billion Sukuk bond to fund infrastructure projects across Nigeria. This move is part of the government’s strategy to use non-interest financial instruments to develop critical sectors such as transportation and energy.
According to DMO Director-General Patience Oniha, the funds raised through the Sukuk bond will be used to construct and rehabilitate roads, bridges, and other key infrastructure. “We have successfully used Sukuk bonds in the past to improve infrastructure, and this new issuance will help address the country’s growing needs,” she said.
Sukuk bonds are Islamic financial instruments that comply with Sharia law by avoiding interest payments. Instead, they allow investors to earn returns based on the performance of funded projects. Nigeria has issued several Sukuk bonds in recent years, with previous ones financing major road projects across the country.
While some financial experts have welcomed the development, others argue that the government needs to explore more sustainable ways of funding infrastructure rather than increasing debt. They also stress the need for transparency in how the funds are managed to ensure they are used effectively.
With Nigeria’s infrastructure deficit remaining a major challenge, the success of this Sukuk bond issuance could determine how the government approaches future financing models. The bond issuance is expected to take place in the coming months.
