Ikom Bridge, Cross River State

The federal government has released funds for the construction of Ikom Bridge, rehabilitation of Alesi-Ugep (Iyamoyong-Ugep) road in Cross River State and 42 other roads in Nigeria.

Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed presented a cheque of N162.557 billion, being proceeds of the third Sovereign Sukuk issued by the Debt Management Office (DMO) for 44 road projects across the country on Monday, July 20, 2020 to Minister of Works and Housing,  Babatunde Fashola in Abuja.

The minister said the federal government has so far released a total of N995.665 billion to finance capital projects in the 2020 Budget.

Presenting the cheque to the Minister of Works and Housing, Mr. Babatunde Fashola, the minister said a total of N1.347,423,264,262 was appropriated for capital expenditure in the Revised 2020 Budget, adding that President Muhammadu Buhari had directed that 50 per cent of the budgeted amount should be released before the end of July.

Ahmed stated that total capital releases, including the N162.557 billion Sukuk proceeds now stands at N995.665 billion, stressing that the DMO had raised the sum of N162.557 billion from investors in June 2020.

She emphasised: “This amount is strictly dedicated to the financing of road projects in the Revised 2020 Appropriation Act. It also means that with the release of N162.557 billion to the Federal Ministry of Works and Housing, the amount appropriated for road projects financed by Sukuk in 2020 Budget has been fully released.”

The minister noted that the federal government had been greatly encouraged by the tremendous success recorded with regards to improvements in road infrastructure across the six geo-political zones with the intervention of the special funding.

Noting that besides the fact that the evidence of the use of the proceeds of Sukuk by way of works done are there for all to see, the comments and feedback received from commuters, transporters, other businesses, investors and other well-meaning Nigerians have been heart-warming.

According to her, the current administration is of the view that with the deployment of the Sukuk funds, coupled with the capital releases and various interventions by the government, the country will be on the path to economic development.

Earlier in her remarks, Director General of the DMO, Ms. Patience Oniha, said the cheque presentation was organised to celebrate the successful completion of the Sovereign Sukuk issued by her agency on behalf of the Federal Government of Nigeria (FGN).

She recalled that the first Sukuk of N100 billion was issued in September 2017, followed by another in December 2018 in the same amount, noting that eith the issuance of the third Sovereign Sukuk, the FGN had raised a total of N362.577 billion, all of which are for the rehabilitation of road projects across the country.
“Many road users have confirmed that they have had a better travel experience on the projects financed through Sukuk. This is besides the many benefits such as job creation, financial inclusion and development of the domestic capital market arising from the Sukuk issuance,” Oniha said.
According to her, the strong response to the third Sovereign Sukuk for which a total subscription of N669.12 billion was received for the N150 billion on offer, representing a subscription level of 446.08 per cent is indicative of good market awareness and acceptance of Sukuk as a financial product.

She noted that flowing from this realisation, the DMO plans to continue to use Sukuk and Green Bonds, both of which are project-tied to support the development of infrastructure and other capital projects, adding that what extent the agency can achieve this depends on how much is allocated to projects in annual budgets.

In his remarks while receiving the cheque, the Minister of Works and Housing, Babatunde Fashola, noted that while there had been public debate on government’s increasing borrowing, the justification could be gleaned from what has been achieved with the proceeds of Sukuk bonds in the past few years.

Noting that the concern over increased borrowing was legitimate, he however noted that the road projects executed with the proceeds of Sukuk were there for all to see across the country.
Fashola stated that the cheque presentation underscored a working partnership between the public and private sectors.
Applauding the finance ministry, the DMO and the National Assembly for the synergy that led to the Sukuk, Fashola said all the six geo-political zones would benefit from the projects listed for execution with the funds.
Giving the breakdown, he said the North-West, North-East and North-Central had eight roads each slated for rehabilitation while the South-South had roads to be rehabilitated.

The South-west had six for rehabilitation while the South-east had five.

In his remarks, the Chairman, Senate Committee on Local and Foreign Debts said the Sukuk funds were project-tied to promote transparency and accountability.

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