Nigeria’s capital market had a spectacular display of investor appetite after the recent listing of the Sovereign Sukuk by the Debt Management Office.Â
N300 billion Series VII Ijarah Sukuk was subscribed to for financing vital national infrastructure, which was subscribed to a record N2.2 trillion. That represents an oversubscription ratio of over 735 percent, marking one of the best debt listings in Nigeria’s history.
The Nigerian government pioneered the Sukuk, an Islamic non-interest financial product, in 2017 as a strategic ethical financing tool. The product has become increasingly accepted since issuance, particularly by retail investors, Islamic finance organizations, pension fund administrators, asset managers, and commercial banks. The latest outcome demonstrates increased countrywide demand for sharia-compliant investment products and adds more credentials to Sukuk as a viable model for infrastructure development financing.
As reported in the DMO’s formal announcement on its website, the colossal response validates the increasing popularity of ethically correct investment opportunities. It justifies the Federal Government’s financial inclusiveness and economic diversification policy. The office noted that Series VII Sukuk was designed specifically for developing and rehabilitating critical transport facilities in Nigeria’s six geopolitical zones, including the Federal Capital Territory.
This is a seven-year Ijarah Sukuk issuance whose proceeds will be used to upgrade and improve roads and bridges that are the backbone of national connectivity. These infrastructure upgrades will stimulate trade, reduce travel time, enhance logistics, and facilitate regional integration.
This initiative aligns with President Bola Ahmed Tinubu’s Renewed Hope Agenda, under which infrastructure investment was positioned at the forefront of Nigeria’s long-term development agenda. The Sukuk proceeds will directly contribute to realizing the administration’s objectives of achieving economic stability, employment opportunities, and inclusive growth through enhanced public infrastructure.
From the market’s point of view, this oversubscription reflects confidence in Nigeria’s economic vision and the DMO’s record of keeping public debt data transparent. Market observers point out that such high subscriptions can result in more frequent Sukuk issues and can act as a benchmark for other African countries considering Islamic finance as a source of development.
The DMO added that the massive number of participants in the various categories of investors indicates an expansion of the universe of financial inclusion. The capacity of ordinary Nigerians, via retail platforms, to access this kind of government-backed investment is an actual move towards level playing field access to the capital market.
With Nigeria still grappling to bridge its infrastructural gap, non-interest instruments like Sukuk offer a cheap source of funding. In addition to road and bridge construction, future tranches of Sukuk can potentially be used in other sectors like healthcare, education, and energy to widen the social impact.
Overall, the success of the Series VII Sovereign Sukuk reinforces Nigeria’s increasing proficiency in structured finance and ability to raise funding from a broad array of investors, both local and foreign.
