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In order to raise fund for infrastructural projects, Nigeria has sold an Islamic bond, Sukuk for 162.56 billion Naira ($450 million). The investors are local funds and insurance companies according to the Financial Times.
The Debt Management Office (DMO), said that the government had earlier opened the sale of Sukuk at 150 billion Naira. However, an oversubscription of the Sukuk bond influenced the decision to raise it.
The 162.56 billion Naira proceeds from the sold Islamic bond will go into financing 44 road projects across Nigeria. There are also plans to issue more bonds to infrastructural development according to DMO.
Due to a shortfall in its 2020 budget, the government conceded to loans and drawing from domestic markets. Lower oil prices worsened it, weakened the naira and the country’s Q1 revenue.
The growing debt issue in Nigeria since this year was enhanced by the coronavirus pandemic. Naira liquidity and its lateral effect in the black market, shortage in dollars has also seen foreign investors selling treasury bills.
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