As the pressure on federal revenue mounts following steady
decline in oil revenue, the Federal Government would be
resorting to a Sukuk Bond for funding the widening budget
deficit, Vanguard reports. Sukuk is a financial certificate,
similar to the traditional government bond, but complies with
Sharia, Islamic religious law.
The Debt Management Office, DMO, and Securities and
Exchange Commission, SEC, are collaborating in an effort to
issue the Nigerian sovereign Islamic bonds this year.
Details of the expected revenue from the bond is not yet
disclosed but officials said they expect significant bridging of
the 2016 budget deficit which has exceeded the initial N2.2
trillion estimate.
According to DMO “issuing a sovereign Sukuk will attract
significant amounts of affordable capital from the Gulf
countries and other established Islamic markets around the
world into Nigeria.”