The Federal Government of Nigeria has successfully repaid its first-ever N100 billion Sovereign Sukuk issued in 2017, signaling a significant milestone in the nation’s pursuit of transparent and responsible debt management.
According to a 9am News report, the announcement was made during an Investor Meeting hosted by the Debt Management Office (DMO) in Abuja, which also marked the official launch of a fresh N300 billion Series VII Sukuk to finance key road infrastructure across the country.
All investors in the 2017 Sukuk have received full repayment of their capital, along with earlier periodic rental returns. The Sukuk—structured according to Islamic finance principles—had the Central Bank of Nigeria (CBN) serve as the paying agent, disbursing rentals during the life of the bond and repaying the principal at maturity.
Upon conclusion, the government repurchased the road assets backing the Sukuk and returned the full principal to investors, closing the investment cycle on schedule.
DMO Director-General, Ms. Patience Oniha, described the repayment as a clear demonstration of Nigeria’s financial discipline and credibility.
“It’s a journey. Development doesn’t happen in one day, but current policies are steering the country in the right direction,” Oniha said.
She credited recent macroeconomic improvements, including FX market stability and Nigeria’s credit rating upgrade by Fitch Ratings, as evidence of policy effectiveness.
Oniha noted that the country’s total public debt stood at ₦144.67 trillion as of December 2023, split nearly equally between external and domestic components. She clarified that most of the increase was due to naira depreciation, which inflated the naira value of dollar-denominated debt.
“Our external debt remains around $42.5 billion, but due to a weaker Naira, the local currency value appears higher,” she explained.
She also mentioned the inclusion of N30 trillion in Ways and Means advances—government borrowings from the CBN—as part of the official debt records.
Nigeria’s external borrowing remains largely concessional, with over 60% sourced from multilateral and bilateral partners, such as the World Bank, African Development Bank, China, India, and Germany, offering favorable terms and reduced exposure to global market volatility.
Domestically, Oniha said the government continues to issue a range of investment instruments including:
- Treasury Bills
- Federal Government Bonds
- Savings Bonds
- Sukuk
“There’s an option for every investor class—from institutions to everyday citizens. And this diversity strengthens our funding strategy,” she stated.
Most of Nigeria’s domestic debt instruments are long-term, with some bonds maturing in 30 years—an approach that helps manage repayment obligations effectively.
Despite the debt-to-GDP ratio crossing the 50% threshold, Oniha assured investors that Nigeria remains within international benchmarks set by institutions like the IMF, World Bank, and ECOWAS.
“Sustainability isn’t just about debt size. It’s about economic growth and revenue expansion,” she emphasized.
She praised the National Assembly for passing new tax laws designed to enhance government revenues and reduce reliance on borrowing, supported by improved oil income and stable FX policy.
N300bn Series VII Sukuk Targets Infrastructure Growth
The launch of the N300 billion Series VII Sukuk continues Nigeria’s strategic push to finance infrastructure through ethical, interest-free means under Islamic finance principles.
Proceeds will be deployed to critical road projects across the country, continuing the legacy of previous Sukuk that have significantly improved Nigeria’s transportation network.
The DMO reaffirmed its commitment to investor confidence, timely repayments, and transparency, noting that Sukuk has emerged as a trusted tool that supports inclusive development and attracts both domestic and foreign investment.
“With Sukuk, we’re building infrastructure while promoting responsible investing. It’s a win-win for the economy,” Oniha concluded.
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