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Nigeria postpones sovereign sukuk issuance until 2017

10 Aug 2016, 06:01 pm
Financial Nigeria
Nigeria postpones sovereign sukuk issuance until 2017

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- The Securities and Exchange Commission said the Debt Management Office is likely to reschedule the sukuk issuance due to unforeseen circumstances.

Director General, Debt Management Office, Abraham Nwankwo, speaking at the Xcellon Infrastructure Roundtable in Abuja last month

The Director General of the Securities and Exchange Commission (SEC), Mounir Gwarzo, said on Wednesday that a sovereign sukuk, or Islamic bond, issuance planned for the third quarter of 2016 may be postponed until the first quarter of next year.

Speaking during a media briefing in Lagos, Gwarzo said the Debt Management Office (DMO) is likely to reschedule the sukuk issuance due to unforeseen circumstances.

“Initially, they (DMO) were thinking about issuing a sovereign Sukuk bond this year, they are working toward the savings bonds and other infrastructural instrument and they have a timeline,” Gwarzo said. “From our discussion with them, it is very unlikely that a sovereign Sukuk will be issued this year. They are working toward it, but if they are not able to issue it this year, they are certainly looking at the first quarter of 2017."

In January this year, SEC and DMO agreed to work together towards the issuance of Nigeria’s first sovereign sukuk in 2016. The agencies said they wanted to deepen Nigeria’s non-interest bond market and help fund the country’s N2.2 trillion 2016 budget deficit.

The SEC boss said that given the slump in global oil prices and decline in revenue generation, the government must look for alternative sources of capital to finance infrastructure development.

“The need for alternative sources of capital to finance infrastructure becomes increasingly more compelling with fragility of growth from major emerging markets,” Gwarzo said.

Sukuk is a non-interest, Sharia-compliant Islamic bond. Global sukuk issuance surpassed $100 billion in 2013. Osun State issued the first sukuk in Nigeria, raising N11.4 billion in 2013. Last December, Ivory Coast issued the largest Sukuk in West Africa, raising $244 million with a tenor of five years.


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