Nigeria Issues N1.1 Trillion Sovereign Sukuk to Finance 124 Road Projects
SEC Highlights Islamic Capital Market's Growth at International Conference
The Nigerian Securities and Exchange Commission (SEC) has announced that the federal government has issued six Sovereign Sukuk bonds totaling N1.1 trillion ($657.6 million) to finance 124 federal road projects across the country’s six geopolitical zones.
Speaking at the second International Islamic Capital Market Conference in Karachi, Pakistan, SEC Director-General Emomotimi Agama highlighted the significant infrastructure impact of these Islamic financial instruments. The road projects span an impressive 5,820 kilometres, demonstrating the tangible economic benefits of Sukuk financing.
“Beyond Sukuk, the ICM segment in Nigeria offers diverse investment opportunities. From one registered fund in 2008, the segment currently boasts 14 registered Halal mutual funds with a net asset value exceeding ₦105 billion as of November 2024.
”The NGX Lotus Islamic Index tracks 11 Shariah-compliant equities, while Nigeria’s first Islamic Real Estate Investment Trust – ChapelHill N-REIT highlights the potential of real estate investments.
”The prospects for Nigeria’s Islamic finance industry are underpinned by key growth drivers, both global and domestic,” he said.
Agama emphasized the success of these issuances, noting that subscriptions have consistently reached extraordinary levels, with the most recent reaching a staggering 441 percent oversubscription rate. Since 2017, Sovereign Sukuk has emerged as a crucial driver of Nigeria’s Islamic Capital Market (ICM) growth.
The SEC’s presentation painted an optimistic picture of Nigeria’s Islamic financial landscape. The market has expanded from a single registered fund in 2008 to 14 registered Halal mutual funds, with a net asset value exceeding N105 billion as of November 2024. The NGX Lotus Islamic Index now tracks 11 Shariah-compliant equities, and the country has launched its first Islamic Real Estate Investment Trust.
However, Agama also acknowledged ongoing challenges, including limited public awareness of Islamic finance principles and the need for regulatory alignment across institutions. He stressed the importance of continued capacity-building efforts, particularly in Shariah governance and compliance.
The Sovereign Sukuk program represents a innovative approach to infrastructure financing, allowing the government to fund critical road projects through Shariah-compliant financial instruments. This approach not only addresses infrastructure needs but also opens new investment avenues for both domestic and international investors.
