Nigeria has taken a bold step in tackling its long-standing infrastructure challenges with the launch of a new N300 billion Sovereign Sukuk bond. The bond is aimed squarely at narrowing the country’s estimated N18 trillion road infrastructure gap.Â
This move signals a renewed commitment by the Debt Management Office (DMO) to improve connectivity across the nation and deepen financial inclusion through alternative investment instruments.
This latest Sukuk offering marks the seventh in the series and presents an opportunity for retail and institutional investors to align their funds with tangible national development goals. Structured as a non-interest-bearing Islamic financial instrument, the bond offers a 19.75 percent annual rental income over a seven-year term, maturing in 2032. The offer, which opened on May 13, 2025, is scheduled to close on May 20, and it requires a minimum subscription of N10,000.
From a business and investment perspective, the significance of this bond lies in its track record. Between 2017 and the end of 2023, Nigeria successfully raised over N1.09 trillion through six Sukuk issuances. These funds were directly applied to constructing and rehabilitating more than 4,100 kilometers of federal roads and nine critical bridges across all six geopolitical zones and the Federal Capital Territory. In a country where poor infrastructure has long hampered commerce and logistics, these improvements are a welcome development for businesses and investors alike.
What sets Sukuk apart from traditional bonds is its asset-backed structure. Rather than earning interest, investors receive rental income from the assets tied to the bond, typically infrastructure projects. This model has boosted investor confidence because funds are directly linked to verifiable, on-ground developments, ensuring transparency and accountability.
The Director-General of the DMO, Patience Oniha, stressed that this financing model fits squarely into Nigeria’s long-term economic strategy. She highlighted that Nigeria’s debt-to-GDP ratio remains at a sustainable 50 percent, well within international benchmarks set by institutions like the IMF and World Bank. She noted that public debt should not be evaluated solely by size, but by a country’s ability to grow its revenue base and expand its economy.
Oniha also pointed to recent macroeconomic improvements as signs of a recovering fiscal landscape. Nigeria has seen increased foreign exchange stability, better transparency, and renewed investor optimism, evidenced by Fitch Ratings upgrading the country’s credit outlook. Though initially difficult due to structural reforms, these shifts are beginning to stabilize the economy and attract broader market interest.
For business owners and investors, the latest Sukuk offers a high-yield investment opportunity and a chance to participate in a forward-thinking economic model. As Nigeria looks to scale up future issuances, the DMO is exploring the possibility of funding other types of infrastructure, particularly those capable of generating revenue, such as energy, housing, and transport hubs.
The DMO has also been intentional about diversifying Nigeria’s external debt portfolio. More than 60 percent of external loans come from bilateral and multilateral sources, such as the World Bank, the African Development Bank, China, India, and Germany, offering more favorable terms than commercial debts. This approach cushions the country against global financial volatility while maintaining debt sustainability.
In essence, this N300 billion Sukuk is more than a bond; it’s a signal of Nigeria’s ambition to modernize its infrastructure, grow its economy, and create investment pathways that are inclusive, ethical, and aligned with global standards. This could be a turning point worth paying attention to for stakeholders in finance, construction, logistics, and real estate.
