The Debt Management Office (DMO) has announced the issuance of a N300 billion 7-year Ijarah Sukuk bond to fund critical road and bridge infrastructure across Nigeria’s six geopolitical zones.
According to a public notice released on the DMO’s website on Monday, the Sukuk bond—structured as a Forward Ijarah (Lease) Sukuk—has a rental rate of 19.75% per annum and is due for maturity in May 2032.
The offer opens on Monday, May 12, 2025, and will close on Tuesday, May 20, 2025, with the settlement date scheduled for Friday, May 23, 2025.
The issuance is being carried out by FGN Roads Sukuk Company 1 Plc on behalf of the Federal Government of Nigeria, and aligns with the government’s commitment to deploy alternative financing to bridge Nigeria’s infrastructure deficit.
Key Features of the Offer:
- Instrument Type: Forward Ijarah (Lease) Sukuk
- Total Offer Size: N300,000,000,000
- Tenor: 7 Years (Due May 2032)
- Rental Rate: 19.75% per annum (payable semi-annually)
- Unit of Sale: N1,000 per unit, subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter
- Redemption: Bullet repayment at maturity
Utilization of Proceeds
The funds raised from the Sukuk will be exclusively utilized for the construction and rehabilitation of key road projects and bridges across Nigeria’s six geopolitical zones. The initiative is expected to accelerate economic growth and improve connectivity between rural and urban centers.
Security and Regulatory Status
The instrument enjoys a robust legal and regulatory status:
- Backed by the full faith and credit of the Federal Government of Nigeria
- Recognized under the Trustee Investment Act as a permissible security for trustees
- Exempt from taxation under the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for pension funds and other qualified investors
- Classified as a liquid asset by the Central Bank of Nigeria (CBN)
- Certified by the Financial Regulation Advisory Council of Experts (FRACE) of the CBN
- To be listed on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited, enhancing secondary market liquidity
Strategic Significance
This is the eighth Sukuk issuance by the Federal Government since 2017. The DMO has successfully raised over N1 trillion from previous Sukuk offerings, which have financed the development and rehabilitation of hundreds of kilometers of roads and bridges across the country. The Sukuk model also promotes ethical investing and aligns with non-interest finance principles.
By offering a rental yield that is competitive with market rates, the government hopes to attract both retail and institutional investors, including pension funds, insurance firms, fund managers, and faith-based investors.
