The Federal Government is planning to issue a new N300 billion Sukuk aimed at financing important road and bridge development across the country, with investors earning a 19.75% return over a seven-year period.
The Al Ijarah Sukuk, issued by the Debt Management Office on behalf of FGN Roads Sukuk Company 1 Plc, will be available for subscription beginning May 13, 2025.
According to the formal terms, the Sukuk will have an annual rental (interest) rate of 19.75%, payable semi-annually, with the entire principal repayment (bullet payment) due at maturity.
The minimum subscription is pegged at N10,000 at N1,000 per unit, and thereafter in multiples of N1,000.
The investment will be used to fund the construction and rehabilitation of selected roads and bridges as identified by relevant federal agencies.
“The capital raise will be used to finance the construction and/or rehabilitation of road projects and bridges identified by the agencies of the federal government,” the offer document states.
It further emphasizes that the Sukuk represents:
“Direct, unconditional, unsubordinated unsecured obligations to the federal government of Nigeria, which ranks pari passu with outstanding present and future unsecured obligations of the federal government of Nigeria.”
In addition to its attractive interest rate, the Sukuk qualifies as a government security under the provisions of the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA), although it is not open to pension fund investments.
Furthermore, the security is recognized by the Central Bank of Nigeria (CBN) as a liquid asset and qualifies as an investment instrument under the Trustee Investment Act.
This marks another milestone in Nigeria’s ongoing strategy to leverage non-interest finance to boost infrastructure while attracting diverse categories of investors.