10/8/2016/The Will
The Securities and Exchange Commission has declared that the sovereign Sukuk bond initially scheduled for third quarter of 2016 would now be issued in the first quarter of 2017.
Mr Mounir Gwarzo, SEC Director-General, made this known on Wednesday at the commission’s Capital Market Committee second quarter media briefing in Lagos.
The DG said that issuance of the sovereign Sukuk bond, which is being packed by SEC and the Debt Management Office, will not be visible due to unforeseen circumstances.
“Initially, they were thinking about issuing a sovereign Sukuk bond this year, they are working toward the savings bonds and other infrastructural instrument and they have a timeline,” he said.
“From our discussion with them, it is very unlikely that a sovereign Sukuk will be issued this year.
“They are working toward it, but if they are not able to issue it this year, they are certainly looking at the first quarter of 2017.
“The need for alternative sources of capital to finance infrastructure becomes increasingly more compelling with fragility of growth from major emerging markets.”
He added that the sovereign Sukuk bond, when launched, would enjoy all the tax concession granted to corporate bonds as the Federal Inland Revenue Services had agreed to grant necessary tax concession to corporate bond on the proposed Sukuk bond.
Gwarzo had in January said that SEC and DMO had formed a committee to set up modalities for the first sovereign bond declaring that the commission was working with DMO to ensure the issuance of the bond in the third quarter of 2016.
Gwarzo said that slide in crude oil price and drop in revenue generation made it imperative for government to look for alternative source of capital to finance infrastructure development.
He said that the country would attract significant amounts of affordable capital from the Gulf countries and other established world issuing a sovereign Sukuk bond.
Gwarzo also predicted that Nigeria’s maiden sovereign Sukuk would be oversubscribed with enhanced participation of domestic and foreign investors.
Story by David Oputah
