The amount paid on rentals for Sukuk bonds in Q1 2023 was N8.17bn, which remained unchanged from the same period in 2022, according to the Debt Management Office’s analysis.
Sukuk bonds are sharia-compliant instruments used in Islamic finance, where investors receive rental income and partial ownership in assets invested by the Federal Government.
The Debt Management Office won the Best Local Currency Bond in EMEA for the Federal Government of Nigeria N250bn SUKUK at the EMEA Finance Achievement Awards 2022.
The Federal Government has used funds raised through Sovereign Sukuk between 2017 and 2021 for the construction and rehabilitation of various road projects and bridges across Nigeria.
Opinion: The consistent rental payments for Sukuk bonds show stability in the country’s Islamic finance market. These bonds have been effectively utilized for infrastructure development, evident in the numerous road projects and bridges financed through the proceeds. As the government continues to attract investments through Sukuk, it should ensure transparent use of funds and sustainable development to build investor confidence and bolster economic growth.
Sukuk bonds offer investors partial ownership and rental income from government-invested assets. The use of Sukuk proceeds for infrastructure development has earned recognition, making it an essential instrument in the country’s financial market.