The Federal Government of Nigeria has fully redeemed its first-ever Sovereign Sukuk, a ₦100 billion issuance from 2017, marking a major milestone in its commitment to responsible and transparent debt management.
The announcement was made during an Investor Meeting in Abuja on Monday, coinciding with the launch of a new ₦300 billion Series VII Sukuk. According to the Debt Management Office (DMO), all 2017 Sukuk investors received complete repayment of their principal along with periodic rental returns, distributed by the Central Bank of Nigeria (CBN), which acted as the Paying Agent. At maturity, the government repurchased the associated road assets, effectively closing the investment cycle.
Speaking at the event, DMO Director General Patience Oniha highlighted recent positive macroeconomic trends, including an improved credit outlook for Nigeria by Fitch Ratings. She credited ongoing fiscal and monetary reforms—particularly those targeting the foreign exchange market—with helping to stabilize the Naira and enhance transparency.
“Development takes time,” Oniha remarked, “but our current policies are steering us in the right direction.” She added that while some reforms have been difficult, they are already yielding visible benefits, including improved FX liquidity and more stable exchange rates.
She also expressed optimism about the oil and gas sector, noting that new presidential initiatives could further boost revenues. On the public debt front, Oniha reported that Nigeria’s total debt stood at ₦144.67 trillion as of December 2023, split nearly evenly between domestic and external debt. A major contributor to the increased debt figure, she explained, is the depreciation of the Naira, which has inflated the local currency value of dollar-denominated loans.
Oniha also noted that ₦30 trillion in Ways and Means advances—emergency borrowings from the Central Bank—are now officially part of the national debt figures. Despite this, she reassured investors about the structure and manageability of Nigeria’s debt, stressing that over 60% of the external borrowing comes from multilateral and bilateral sources with favorable terms.
Domestically, she emphasized the strength of Nigeria’s bond market, which offers diverse instruments such as Treasury bills, Federal Government Bonds, Savings Bonds, and Sukuk. She highlighted that these instruments are designed for various investor classes and support long-term financing needs, with some bonds maturing over 30 years.
Though the debt-to-GDP ratio has crossed 50%, Oniha said it remains within globally accepted thresholds. “Debt sustainability is not solely about the size of the debt,” she explained. “It’s also about increasing revenues and expanding the economy.”
She praised the National Assembly for passing new tax legislation aimed at improving revenue collection, reducing the need for borrowing, and supporting more sustainable public finance.
The new ₦300 billion Sukuk issuance will continue to finance nationwide road projects, reflecting the government’s broader infrastructure strategy. The DMO reaffirmed its commitment to transparency and adherence to Islamic finance principles, which prohibit interest and emphasize ethical, asset-backed investment.
Sukuk has become an essential tool in Nigeria’s infrastructure financing, attracting both local and international investors while reinforcing confidence in the country’s debt instruments. With this latest issuance, Nigeria continues to diversify its funding sources and support long-term economic growth.
