Ministry Of Power, Works And Housing Receives Sukuk Proceeds

The Ministry of Finance, led by Minister, Zainab Ahmed has presented the cheque of proceeds from the 2018 Sukuk Bond to the Federal Ministry of Power, Works and Housing.

The Federal Government had informed the public of its Sukuk Bond for the generation of funds for roads & other infrastructural projects.

The first tranche of the Sukuk Bond, launched in September 2017 was well subscribed, with its proceeds used for the construction of 25 roads across Nigeria.

The Sukuk Bond, a type of government long-term security with mouthwatering returns on investment was oversubscribed in 2018 after the release of its second tranche. The Federal Government revealed in December that it had a 132.2% return on the Sukuk Bond with a subscription of N132.2bn for the N100bn bond released.

Minister of Power, Works and Housing received the cheque from Mrs. Ahmed.

Minister of Power, Works and Housing, Babatunde Fashola(2nd from left) receiving the cheque from Minister of Finance, Zainab Ahmed(2nd from right)

Minister of Finance, Mrs. Ahmed said on Thursday that the objectives of financial inclusion is gradually being achieved with Retail Investors subscribing to the bond by more than four times in comparison with 2017. In 2017, Retail investors participation was set at 4%, while in 2018, it was 17.33%.

“This afternoon, I delivered the opening remarks at the Ceremony for the Presentation of Symbolic Cheque of N100bn Sovereign Sukuk Proceeds to the Federal Ministry of Power, Works and Housing,” she said.

Minister of Finance, Zainab Ahmed reading her speech at the presentation ceremony

Minister of Power, Works and Housing, Babatunde Fashola

”Recall that FGN issued a ₦100b Sovereign Sukuk in Dec. 2018 that was oversubscribed to the tune of ₦132.2b or 132.2%. This was opened to the public: Retail Investors, Pension Fund Administrators, Deposit Money Banks & Other Institutional Investors. An indication of the wide acceptance of the financing product.

The significant increase in participation by Retail Investors from about 4% in 2017 to 17.33% in 2018 means the objectives of financial inclusion & deepening of Investor base of FGN Securities are gradually being achieved. 1,876 Retail Investors participated in the Sukuk Issuance.

Proceeds will support Federal Government’s capital spending for 2018 – the construction & rehabilitation of 28 key economic roads in the 6 geo-political zones of the country with equal allocation of ₦16.67b. The roads will ease commuting, spur economic activities & close our infrastructural gap.

The Sukuk funding option is part of the initiatives of the FGN to diversify funding sources, to deepen the Nigerian capital market, to mobilise more savings and promote financial inclusion. The use of proceeds of the issuance has an in-built investor protection mechanism.

The funds will be released to Federal Ministry of Power Works and Housing based on a framework agreed with the Trustees (FBNQuest Trustees Ltd & STL Trustees Ltd) who will monitor the disbursements & have been ring-fenced in a dedicated account at the Central Bank of Nigeria to ensure transparency and accountability in use of proceeds.”



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