FG Records N2.2tr Sukuk Subscriptions, Issues Fresh N300bn Bond

The Debt Management Office (DMO) has announced that the Federal Government has recorded a total of N2.205 trillion in subscriptions through the Sovereign Sukuk initiative since it was first launched in 2017. This figure represents an impressive oversubscription rate of 735%, highlighting growing investor confidence in the financial instrument.

The latest development was revealed in a circular released on Wednesday, May 28, 2025. The DMO confirmed that a new N300 billion 7-year Ijarah Sukuk bond has been issued, aimed at funding critical road and bridge infrastructure across all six geopolitical zones in Nigeria, including the Federal Capital Territory.

According to the DMO, the overwhelming subscription to the Sukuk bond reflects strong investor appetite for ethical investment options. The Sukuk was introduced as an innovative financing tool to broaden Nigeria’s investor base and allow greater participation by citizens in the capital market. Subscriptions came from a diverse group of investors including retail buyers, non-interest financial institutions, conventional banks, pension fund administrators, and asset management firms.

The funds raised from the Sukuk will be allocated towards the construction and rehabilitation of major roadways and bridges across the country. The initiative is part of the government’s broader effort to address infrastructure challenges while offering investors returns on their investments.

Speaking earlier in March during a stakeholder meeting for the issuance of the seventh series of the Sovereign Sukuk, the Director-General of the DMO, Patience Oniha, recalled that the first Sukuk offering in September 2017 had a target of N100 billion and was slightly oversubscribed, closing with N105.878 billion in commitments. She noted that the programme has since gained traction, raising a total of N1.09 trillion from 2017 to the end of 2023.

These funds, according to Oniha, have been used to construct or rehabilitate over 4,100 kilometres of roads and nine bridges across Nigeria. She stressed that the Sukuk has delivered wide-ranging benefits, including improved travel times, enhanced road safety, job creation, and greater access to markets, especially for rural farmers. She also noted that investors benefit both financially and socially, receiving semi-annual income payments while contributing to national development.

The DMO confirmed that the latest Sukuk issuance was structured and managed with support from financial advisory firms including Lotus Financial Services Limited, Buraq Capital Limited, Stanbic IBTC Capital Limited, Greenwich Merchant Bank Limited, and Vetiva Capital Management Limited. These firms play a key role in guiding the structure of the Sukuk, managing the issuance process, and encouraging investor participation.

Earlier this May, the DMO reaffirmed the issuance of the N300 billion 7-year Ijarah Sukuk bond to support infrastructure upgrades across the nation.