Sukuk is an Islamic financial certificate, similar to a bond in Western finance that complies with Sharia, the Islamic religious law.
Director-General of DMO, Abraham Nwankwo who stated this at a one –day workshop organised to sensitize newsmen on the activities of the organization in Lagos recently, noted that the DMO and the Securities and Exchange Commission (SEC) had inaugurated a committee to develop a framework for the issuance of the sukuk to be ready by May, 2016, as stated earlier but needed to widen the scope of the committee to include the Central Bank of Nigeria, CBN, and Infrastructure Concession and Regulatory Committee.
“SEC and DMO are working on the sukuk bond, the DG of SEC and that of DMO, having inaugurated a committee to develop a frame work for the issuance of the domestic sovereign sukuk some days ago.
“Having commenced work, we found out that we needed to widen the scope of the committee to include the CBN and the Infrastructure Concession and Regulatory Committee and all of us are working on the project and we do believe that by the third quarter, we will be able to come up with a timeline for the issuance of sovereign sukuk,” he said.
Nigeria has set up a government committee to advise on issuing the country’s first sovereign sukuk, citing the need to explore alternative funding sources, even as it plans to borrow as much as $5 billion to help fund a budget deficit worsened by the slump in oil prices that has slashed revenues and weakened the naira.
Issuance of a sovereign sukuk is part of a strategic plan developed by the DMO three years ago to develop alternative sources of funding and to establish a benchmark curve for corporate organizations to follow.
The SEC had recently announced that the nation’s first sovereign Sukuk would be issued in May 2016, barring any unforeseen circumstances.
The Director-General of the SEC, Mounir Gwarzo explained that the Commission was working with the DMO to ensure issuance of the bond in the next three to four months, noting that the Commission would support DMO in capacity building to ensure successful issuance of the bond.