Bond Market Stays Flat As Nigeria Launches ₦300bn Sukuk Offering At 19.75% Rate

Government bond yields in Nigeria remained relatively unchanged in the secondary market as the Debt Management Office (DMO) unveiled a fresh issuance of its sovereign Sukuk valued at ₦300 billion, priced at a rental rate of 19.75%.

At the start of the week, bond market activity remained muted, though select trading occurred in benchmark bonds such as the February 2031, May 2033, and June 2053 issues. On the curve, the average yield dipped slightly at the short end by 1 basis point, spurred by renewed buying interest in the JAN-2026 bond, which declined by 9 bps. The mid and long ends of the curve, however, saw no movement.

Benchmark yields in the mid-range held steady at an average of 18.38%, signaling cautious optimism among investors despite the subdued trading environment.

Meanwhile, the DMO officially opened subscriptions for the ₦300 billion seven-year Ijarah Sukuk. The Islamic finance-compliant instrument offers a 19.75% rental rate and is available for subscription until May 20. The rate is positioned competitively against local bond instruments, which yielded 19% in the most recent auction.

The Sovereign Sukuk has been a transformative tool for financing infrastructure projects since its introduction in 2017. Proceeds from this latest issuance are earmarked for the construction and rehabilitation of critical road and bridge infrastructure across Nigeria.

Authorities emphasized that the Sukuk plays a pivotal role in financial inclusion, the deepening of the domestic debt market, and the expansion of ethical investment products in the country’s financial system.

As infrastructure development remains a top priority for the Nigerian government, this Sukuk offering aligns with broader national efforts to close infrastructure gaps while diversifying financing sources beyond conventional debt instruments.