The Federal Government on Thursday presented a ceremonial cheque of N100 billion raised through Sukuk Bond to contractors of the Federal Ministry of Power, Works and Housing to complete 25 economic road projects across the country.
Presenting the cheque to the Minister of Power, Works and Housing, Mr Babatunde Fashola in Abuja, the Minister of Finance, Mrs Kemi Adeosun said the money would be housed in a dedicated account but it would be paid to contractors for the roads which the ministry nominated as beneficiaries as they progress their works.
“This is the first Sukuk for Nigeria, and it is an important development in our financial market because it is about financial inclusion and deepening of our financial market.
“By producing and introducing new products, we are able to get more people in as investors in the future of Nigeria. I am very gratified that the offer was oversubscribed – we got N105.87 billion, but we have taken N100 billion,” Adeosun said.
Fashola lauded the initiative saying it shows government’s commitment to investing in infrastructure.
To the road contractors, he said: “We met on the 19th and you all alluded to what the problems were. First of all, I think the problems you identified were broadly two – finance and the weather. I promised you that we will solve the finance problem and nature will take care of the weather.”
The fund was divided equally among the six geopolitical zones with each sharing N16.67bn earmarked for specific road projects in the zone.
The North Central has five projects benefitting from its N16.67bn allocation and they are Loko-Oweto bridge, Abuja-Lokoja road section I and IV; dualisation of Suleja-Minna road phase 2, and dualisation of Lokoja-Benin road section 1.
For northeast, four projects will be done and they are dualisation of Kano-Maiduguri road sections 2, 3, 4, and 5.
In Northwest, the four projects that will benefit are Kano-Maiduguri road dualisation sec. 1, Kano-Katsina road dualisation phase 1, Kaduna eastern bypass and Kano western bypass.
Four projects were marked for Southeast and they are rehabilitation of Onitsha-Enugu road, Enugu-Port Harcourt road section 1,2, and 3.
In the south south, Enugu-Port Harcourt road section 4, dualisation of Yenegwe to Bayelsa Palm, Lokoja-Benin dualisation section 2, 3, and 4 are the five marked projects.
For the south west, the three projects are reconstruction of Benin to Shagamu dual way phase 3 and 4, and dualisation of Ibadan to Ilorin road section.
One of the sukuk financial advisers, Mrs Hajara Adeola of Lotus Capital said the fundraising was tied to project financing and lauded Nigerians for their support.
Deputy Managing Director of FBN Merchant Bank, Mr Taiwo Okeowo said the debut financing platform was successful due to the commitments of Adeosun and Fashola just as he thanks those who invested in the sukuk funding.
Speaking for the contractors, the Managing Director of RCC, Engr. Moussa Nakhla said the financing has put smiles on the face of contractors. He said Fashola raised contractors’ hope to invest their resources into Nigeria’s road infrastructures and that they are beginning to see the fruits.
Director General of the Debt Management Office (DMO), Ms Patience Oniha said the excitement was worth it for the success of sukuk funding. “We intend to use more of this funding means to support infrastructural development,” she noted.