The Federal Government has revealed that it spent N612.56 billion acquired from Sovereign Sukuk between 2017 and 2021 on the construction and rehabilitation of 77 road projects and 23 bridges.
Dr. Zainab Ahmed, Minister of Finance, Budget, and National Planning made the announcement on Monday at a symbolic cheque presentation event for the N130 billion proceeds of the 2022 Sovereign Sukuk Issue to the Ministry of Works and Housing and the Federal Capital Territory Administration.
According to the minister, the FCTA was in charge of six road projects and 19 bridges, while the Ministry of Works and Housing was in charge of 71 road projects and four bridges.
She said, “As at date, this administration has invested the sum of N612.557bn raised through sovereign sukuk between 2017 and 2021 for the construction and rehabilitation of key economic road projects in the six geo-political zones and the Federal Capital Territory.
“In real terms, the amount has been used to construct and rehabilitate sections of 71 road projects covering 2,808.06 kilometers and four bridges by the FMWH and sections of six road projects covering 99 kilometers and 19 bridges by the FCTA.”
She further disclosed that from the N130bn raised from the sukuk issued in 2022, the Ministry of Works and Housing got N110bn while FCTA got N20bn for road and bridge projects.
The finance minister said, “The FMWH and FCTA will be sharing the 2022 Sukuk Issue Proceeds of N130bn, which was successfully issued by the Debt Management Office on behalf of the Federal Government of Nigeria on December 02, 2022 as follows: Federal Ministry of Works and Housing – N110,000,000,000.00 and Federal Capital Territory Administration – N20,000,000,000.00.
“The 2022 Sovereign Sukuk of N130bn will be released as part of the Capital Expenditure in the 2022 Appropriation Act, which has been extended by the National Assembly to March 31, 2023.”
She further stated that as of November 2022, N1.88tn had been disbursed as Capital Expenditure, reflecting around 40% performance as compared to the overall Capital Budget of N4.7tn. She went on to explain that the low capital spending performance resulted in the fiscal year being extended to implement the capital component of the 2022 Budget.
Patience Oniha, Director-General of the DMO, stated that the Sukuk can be issued to support any fixed asset in the country as specified by the finance minister. She also mentioned that the debt office began issuing Sukuk in a difficult climate, but that the issue procedure improved with time.
The Minister of Works and Housing, Babatunde Fashola, praised the sukuk bond proposal, characterizing it as a bailout mechanism that has assisted in the repair of Nigerian roads. He stated that he inherited a total capital budget for roads of N18 billion in 2015, but that amount increased to over N266 billion with the introduction of the Sukuk.