The Nigeria’s Federal Government has said that there is no plan to Islamise the country with the recent issuance of its ₦100 billion Sukuk bond.
The Minister of Finance, Mrs. Kemi Adeosun, said this on the sidelines of an investor conference organised by Stanbic IBTC Bank in Lagos.
Offer for subscription for the Sukuk bond closed on Friday.
Adeosun stated that several countries of the world including South Africa had issued sukuk bonds in the past, and Nigeria’s plan to issue the sukuk bond started about six years ago, long before the current administration came into power.
According to her, the sukuk bond is among the many products being introduced by the current administration to deepen the country’s financial market.
The minister explained that the sukuk bond would enable the Federal Government to bring several investors into its dragnet as it stepped up efforts to raise the funds needed for infrastructure growth and development, among other projects.
Adeosun said, “Sukuk is part of our programme to deepen the financial market. Interestingly, it predated us. The committee started work in 2011. So, they have been working on it for six years, to structure products that would be compliant. Really, the Sukuk is about two things -one is about raising money and deepening the financial market.
“We need to include many people in the market to raise the money that is needed for infrastructure. We have already introduced the savings bond which is for small investors. They were saying that the process of getting into government securities was too complex. So, we made the product for them. And this is another product. We have other products that we are coming up with. So, there is no religious driver behind it. It is really a financial product to meet financial needs.
She added, “This particular one of ₦100bn is going to be used for road projects. We have identified the road projects that it is going to be tied to and there is no religious attachment to it. South Africa even did a sovereign Sukuk before Nigeria. So, there is no Islamisation agenda at all.
The minister said not every investor wanted to put their money into regular bonds and Treasury bills and, as such, there was the need to get everyone on board.
On concerns that the funds raised from Sukuk must be used for Sharia-compliant activities strictly, the minister said, “That is part of what is called the ethical investment. A lot of people for example, don’t want their funds invested in particular items such breweries, among others.
“Funny, a lot of investors that we have been marketing the bond to are just looking at the yield. So, it is really just another product which we hope would deepen the market and bring more people in. Not everybody wants to do bond or treasury bills. And we are still going to bring out many more products.”
Adeosun said the N100bn sukuk bond, which closed on Friday, had received wide acceptance in the investor community, adding that the response had been, “very positive and we are very confident that it would be fully subscribed.”
The Christian Association of Nigeria had last Tuesday opposed the floating of the Sukuk Islamic bond by the Federal Government, alleging it was meant to Islamise the country through the back door.