Nigeria’s Debt Management Office (DMO) has surpassed N1 trillion in sovereign Sukuk bond issuances, marking a significant milestone in the country’s ethical finance landscape. On Wednesday, the DMO also announced plans to raise N300 billion through the Series Seven (VII) Sovereign Sukuk issuance, the largest offering since the program began in 2017. This new issuance will support capital projects across the country.
The Director-General of the DMO, Patience Oniha highlighted that this achievement underscores the growing appeal of ethical finance in Nigeria and reflects increasing confidence in the government’s infrastructure-backed debt instrument. She emphasized the agency’s commitment to using Sukuk as a tool to address Nigeria’s infrastructure deficit.
Nigeria’s journey into sovereign Sukuk started in 2017 with an initial N100 billion issuance, which was slightly oversubscribed at N105.88 billion. Since then, the amounts issued have steadily increased—N100 billion in 2018, N150 billion in 2020, N250 billion in 2021—before decreasing to N100 billion in 2022 and N150 billion in 2023. The current N300 billion offering is set to be the largest since the program’s inception.
Sukuk’s appeal lies in its unique structure—unlike conventional bonds that pay interest, Sukuk investors earn returns generated from the infrastructure projects they help finance, with payments made biannually, providing a steady and predictable income stream.
As Nigeria’s financing needs continue to grow amid fiscal challenges, Sukuk issuances are helping deepen the country’s domestic debt market and promote financial inclusion. Oniha also emphasized that Sukuk offers transparency and accountability, as the funds are project-tied, contributing to the broader development of ethical finance in Nigeria.
Regarding repayments, Oniha confirmed that the Sukuk maturing in September last year has already been fully repaid, as previously announced. The returns on Sukuk are structured to be competitive with other securities, making them an attractive option for investors.
The DMO’s current N300 billion Sukuk issuance is being meticulously coordinated, with collaboration across issuing houses, legal advisers, and trustees. The agency is refining its strategies for issuance timing, investor engagement, and marketing to ensure another successful offering.
