| LAGOS, June 13
LAGOS, June 13 Nigeria plans to sell a 100
billion naira ($328 mln) debut sovereign sukuk in the local
market this month to help fund road projects, the Debt
Management Office (DMO) said on Tuesday.
The Islamic bond with a 7-year tenor will go on sale on June
28 for three days via book building, the DMO said. The bond will
be tradable on the Nigerian Stock Exchange and on FMDQ
Nigeria is home to the largest Islamic population in
sub-Saharan Africa, with about half of its 180 million people
Muslims. It is also home to one of Africa's fastest-growing
consumer and corporate banking sectors.
The DMO said the issue was "part of the plan to fast track
the development of infrastructure and engage in ... project-tied
capital raising." It said Nigeria has challenges with road,
railway and power infrastructures.
In 2013, Nigeria's Osun State issued 10 billion naira worth
of sukuk, but no other sukuk transaction followed.
The latest issuance is part of plans to develop alternative
funding sources for government and to establish a benchmark
curve for corporates to follow, the debt office said.
The planned sukuk issue will target retail and institutional
investors, with First Bank and Islamic wealth manager
Lotus Capital managing the sale.
Nigeria plans to borrow as much as $10 billion from debt
markets, with about half of that coming from foreign sources, to
help fund a budget deficit worsened by lower oil prices which
have slashed government revenues and weakened the naira
It hopes to fund more than half of its budget deficit of
2.36 trillion naira this year from local borrowing. It also
plans to tap concessionary sources to fill its funding needs and
has been in talks with the World Bank since last year.
On Monday, Vice President Yemi Osinbajo, standing in for
President Muhammadu Buhari, signed a 7.44-trillion naira
spending plan for 2017 into law.
The DMO is on a roadshow this week to Britain, Switzerland
and the United States to market a $300 million Diaspora bond to
Nigerians living abroad.
It also expects to issue 20 billion naira in "green bond"
after it raised $1.5 billion Eurobond in the first quarter and
launched a savings bond programme targeted at retail investors.
($1 = 304.65 naira)
(Editing by Ed Osmond)