Bond Markets

SEC set to partner DMO to issue Nigeria’s first sovereign Sukuk

by Adeola Ajakaiye, Sokoto

March 15, 2016 | 9:40 am
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Securities and Exchange Commission (SEC) says it is partnering the Debt Management Office (DMO) to float Nigeria’s first sovereign Sukuk, as part of ongoing initiative to tap into the huge funding opportunities in the non-interest capital market.

SEC disclosed that significant progress had been achieved in the floating of the Sukuk instrument, and it was expected that the instrument would come on stream this year.

Mounir Gwarzo, director-general, SEC, made this disclosure on Monday, while delivering an address at a day roundtable on Non-Interest Capital Market, which open on Monday in Sokoto.

“I urge all of us to actively participate in the discussion and propose practical ways to help companies and state governments that are interested in leveraging the Sukuk market to raise funds for various infrastructure projects.

“We are working closely with the DMO to ensure that Nigeria issues her first sovereign Sukuk that will provide the needed benchmark for other categories of issuers. We are hopeful there will be a significant progress on this front before the end of 2016,” Gwarzo said.

According to Gwarzo, the Commission is also looking at the possibility in which a substantial part of the N4.7 trillion pension asset currently in the wallet of the Pension Commission (PenCom) would be invested in ethical instrument like the non-interest capital products.

He stated that the initiative would go a long way in attracting large pools of savings from domestic sources as well as long-term investment from foreign countries, particularly from advanced Islamic finance markets.

“Going forward, our focus will be on massive public enlightenment and also stronger capacity building initiative and this is what informs the idea of hosting regional roundtable events such as this.

“We hope that the state governments represented here will take advantage of this important opportunity to familiarise yourselves with the kinds of products that can be issued and how to leverage this exciting area to better the lives of your citizens.

“Thankfully, there is a large pool o funds domestically to be subscribed, you may be aware that the Pension Reform Act (PRA) 2015 allows the construction of multi –fund structure that enable pension fund to be invested in ethical products,” he said.

Gwarzo expressed delight that SEC organised the Sokoto roundtable, which according to him, was a follow up to the earlier staged in Kano, a dominant Islamic city.

“It is my sincere honour and privilege to welcome you all to the Great City of Sokoto, the Seat of the Caliphate. We are delighted by your presence at this important high-level roundtable on Non-Interest Capital Market.

“Our message for the event is clear, is that Non-Interest Capital Market is gold mine that remains largely untapped. My hope is that immediately after this roundtable, the state governments of Nigeria’s North West geopolitical zone will begin to take the lead in issuing long-term non-interest products in order to raise capital for the socio-economic development of their states,” he said.

Among the eminent persons that grace the occasion was Muhammadu Sa`ad 11, the Sultan of Sokoto, and other prominent scholars drawn from the academia, businessmen and elected political leaders, including the state governor.

by Adeola Ajakaiye, Sokoto

March 15, 2016 | 9:40 am
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