FG Clears N100bn 2018 SUKUK Bond

The federal government has completed the payment of the N100bn SUKUK bond it subscribed to in 2018.

A statement by Professor of Islamic Law of Banking and Finance, University of Ilorin, Ilorin, Prof. AbdulRazzaq A. Alaro, said the last payment for the seven-year bond was paid on December 31 and it brings credibility to Nigeria in the Islamic finance market.

In the statement, Prof Alaro said: “Again, history has been made in Nigeria! The second FGN SUKUK for road construction in Nigeria is settled. This seven-year 100-billion-naira SUKUK was issued in December 2018 and today the 31st day of December 2025 the Federal Government through Debt Management Office (DMO) successfully paid the purchase price of the sukuk asset.

“The implication of this is huge. For the second consecutive year, Nigeria has proven to be a reliable partner in the global sukuk market, and that itself will boost its chances of attracting more investors in the emerging global Islamic Finance market.”

He noted that Sukuk as an instrument of Islamic Finance is a win-win strategy for all players as the investors have accumulated steady returns on their investments, while the Federal Government of Nigeria has also found in SUKUK a sustainable and affordable mode of addressing one of its most nagging challenges: infrastructural decay.

“To date, over five thousand kilometers of roads in all the six geopolitical zones of the country have been constructed through SUKUK issuance. Congratulations to all the stakeholders in the Sukuk market, congratulations and long live Federal Republic of Nigeria.

It would be recalled that the federal government, during the administration of President Muhammadu Burahi, had issued several SUKUK bonds to fund road projects across the country.

The inaugural FGN Sukuk bond was issued in September 2017 to fund the construction and rehabilitation of key roads, raising N100bn.

The second was in 2018 and it was a N100bn Sukuk issued in December 2018, with the proceeds also dedicated to road infrastructure projects.

In 2020, a N150bn 7-year Sukuk was offered with a rental rate of 11.20% per annum. The offer opened in May and closed in June 2020.

The issuance continued in 2021 with the DMO announcing N100bn FGN Sukuk bonds at 15.64% per annum due in 2032.

Also, in 2022 issuances occurred to continue the funding of infrastructure development while 2023 saw the issuance of a N150bn 10-year Sukuk offered at 15.75% per annum, with the offer opening in October 2023. This offer was significantly oversubscribed.

The Sukuk qualifies as a government security under relevant tax laws and is listed on the Nigerian Exchange and FMDQ Securities Exchange. It is also classified as liquid assets by the CBN.

Since 2017, Nigeria has raised over N1 trillion through Sukuk, funding hundreds of kilometers of road construction and rehabilitation across the six geopolitical zones.