Nigeria’s Debt Management Office has said the Federal Government, through the sale of Islamic bonds, raised N162.56bn ($450m) to help finance infrastructure projects.
DMO said on Tuesday that the government had planned to sell N150bn of the sukuk in its third outing, but increased the size of the offer after it received a more than four-fold subscription.
The agency said it expected to issue more bonds to improve infrastructure and plans to use the proceeds of the sukuk sale to finance 44 road projects across the country.
“It did not give the maturity or the yield date for the naira-denominated bonds. Nigeria had a series of debt issues lined up this year before the Coronavirus Disease triggered a plunge in oil prices, the country’s main export, forcing the government to shelve foreign commercial borrowing,” DMO said.
It explained that “government is now tapping domestic markets and concessionary loans” to help fund its 2020 budget deficit, which has been worsened by lower oil prices that slashed revenues and weakened the naira.
“The oil price crash has also triggered excess naira liquidity on domestic money markets, as foreign investors sell treasury bills, a situation that has helped create dollar shortages in Nigeria, whose economy is projected to contract as much as 8.9 per cent this year,” the agency added.