NEWS AGENCY OF NIGERIA
Nigeria issues N50bn Green bond to boost climate finance

Nigeria issues N50bn Green bond to boost climate finance

197 total views today

By Olawunmi Ashafa

Dr Patience Oniha, Director-General of the DMO, says Nigeria is taking a significant step in tackling climate change with the issuance of a N50 billion Sovereign Green Bond.

Oniha said this at an investors meeting for the Series III Sovereign Green Bond issuance on Monday in Lagos.

She said that the initiative aimed to fund environmentally sustainable projects and reinforce the nation’s commitment to the Paris Agreement.

According to her, the offer is a continuation of Nigeria’s climate financing journey following earlier issuances in 2017 and 2019 that raised N25.69 billion.

She said that the five-year Green Bond would provide funding for projects aligned with Nigeria’s Nationally Determined Contributions (NDCs) to reduce greenhouse gas emissions.

“Today is about sensitising investors. This is the amount, this is the tenor, and very importantly, this is what we intend to do with the funds.

“We must give institutional investors an opportunity to ask questions, reflect, and begin their internal approval processes. This is not just fundraising; it is about our national commitment to sustainability,” she said.

The News Agency of Nigeria(NAN) reports that the five-year bond, targeted at institutional investors with a minimum investment of N10 million, will be listed on the FMDQ platform.

Oniha explained that while the bond market in Nigeria is well-developed, price discovery would remain guided by market expectations.

Also, Dr Iniobong Abiola-Awe, Director, Department of Climate Change, Federal Ministry of Environment, emphasised the urgency and purpose behind Nigeria’s green financing drive.

“Climate change is not a distant threat, it is here, and it is threatening humanity and biodiversity.

“The impact is evident in shifting weather patterns, extreme heat, disappearing Harmattan, rising floods, and desert encroachment.

“Nigeria is shrinking geographically, and we have no planet B. What we do today is a debt or gift to the next generation,” she said.

Abiola-Awe described the Green Bond initiative as part of Nigeria’s broader framework for delivering on global climate commitments under the Paris Agreement and the UN Framework Convention on Climate Change.

She said that Nigeria was committed to cutting greenhouse gas emissions by 20 per cent unconditionally, and up to 47 per cent with international support.

“These bonds are not just financial tools. They are part of a homegrown, innovative solution to climate finance.

“Through initiatives like the 2021-2030 Climate Change Policy, Energy Transition Plan, afforestation strategies, and renewable energy projects, we are building real capacity to mitigate climate impacts.

“The preparation for the issuance of this sovereign green bond underscores Nigeria’s unwavering commitment to environmental and climate action goals and initiatives, aligning perfectly with Mr President’s renewable energy agenda.” Abiola-Awe said.

She cited examples of projects supported by previous green bond issuances across various sectors including agriculture, energy, and transport.

“These projects, many of which were initiated with the first issue in 2019, demonstrate our progressive movement in mitigating climate change within Nigeria.

“I strongly believe, as the D-G has emphasised, that we are on a progressive path towards achieving a great deal in mitigating climate change here in Nigeria.”

She said that the proceeds from previous green bond issuances funded critical projects, including energising education initiatives in Nigerian universities.

“That project improved internet access, increased study hours, and ultimately raised academic performance.

“It is not always what you see on paper, the impact is multidimensional.

The Federal Ministry of Environment, in partnership with the Ministry of Finance, has provided the policy and institutional frameworks for these issuances, which aim to support sectors such as agriculture, energy, transport, and forestry.

She said, “Our progress so far, and this third issuance, reaffirm Nigeria’s commitment to consistent and sustainable financing for climate action.

“The time to act was yesterday, but what we are doing today is one of the biggest contributions we can make.”

The event also acknowledged Nigeria’s legal and transaction advisors on the Green Bond.

The Private Debt Market Makers (PDMMs) were encouraged to support the new issuance with confidence, especially with the successful repayment of earlier bonds.(NAN)(www.nannews.ng)

Edited by Kadiri Abdulrahman

Nigeria making steady economic progress amid reforms – DMO D-G

Nigeria making steady economic progress amid reforms – DMO D-G

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By Olawunmi Ashafa

Dr Patience Oniha, Director-General, Debt Management Office (DMO), says Nigeria is on a steady path of economic recovery, driven by fiscal reforms, improved credit ratings, and targeted investments in infrastructure and environmental sustainability.

Oniha said this at an investors meeting for the Series III Sovereign Green Bond issuance on Monday in Lagos.

She said that Nigeria had recorded notable improvements in its macroeconomic fundamentals, including stabilising inflation, gradual Gross Domestic Product (GDP) growth, and a rebound in crude oil production.

According to her, global credit rating agencies, including Moody’s and Fitch, had upgraded Nigeria’s outlook, reflecting growing investor confidence in the country’s economic trajectory.

“We have seen improvements in our ratings. There is clearly a difference from where we were before.

“This suggests that the reforms are working, even if the results are gradual,” she said.

On inflation, Oniha said that while it initially spiked to 30 per cent, it has since stabilised between 23 per cent and 24 per cent.

“That stabilisation is an indication that the economy is responding to monetary and fiscal policies,” she said.

She stressed the importance of GDP growth and infrastructure investments.

“We have seen post-COVID growth, though we acknowledge it should be higher.

“That is why there is a strong focus on infrastructure through the three-year National Development Plan.

“It is private sector-led, and once infrastructure improves, growth will accelerate,” she said.

She highlighted the recovery in oil production, noting that Nigeria had increased output from below one million barrels per day to between 1.5 and 1.6 million barrels.

She said that reforms in the oil sector, which include the unbundling of the NNPC into a limited liability company, were yielding results.

Turning attention to Nigeria’s growing commitment to climate financing, Oniha announced plans to issue a N50 billion Sovereign Green Bond.

According to her, the bond, which follows earlier issuances in 2017 and 2019 totaling about N25.69 billion, is part of the country’s broader strategy to tackle climate change and support environmental sustainability.(NAN)(www.nannews.ng)

Edited by Kadiri Abdulrahman

Diversifying investment portfolio, infrastructure development via Sovereign Sukuk

Diversifying investment portfolio, infrastructure development via Sovereign Sukuk

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By Kadiri Abdulrahman

With the rapid growth of Nigeria’s population and the attendant need for development, it has become imperative for government to build infrastructure at minimal cost.

Stakeholders posit that bad infrastructure is one of the country’s biggest roadblocks to smooth corporate operations and capital inflows.

They say the present mode of financing infrastructure is usually marred due to high cost of servicing the debt secured to finance the infrastructure deficit in Nigeria.

Experts say Sukuk financing is one of the effective alternatives and strategies for enhancing growth and development through capital project financing.

Recently, the Debt Management Office (DMO) hosted an investor meeting for the N300 billion series seven Sovereign Sukuk issuance in Abuja.

The DMO had earlier hosted an all parties meeting on March 26 in Lagos, in preparation for the Sukuk issuance.

The Director-General of the DMO, Patience Oniha, said that the Federal Government had been able to raise a total of N1.09 trillion through the Sovereign Sukuk since 2017, to support infrastructure development.

Since 2017, the DMO has completed six Sukuk issuances, raising N1.092 trillion to fund road and bridge projects.

Oniha recalled that the first Sukuk was issued in September, 2017.

She said that after extensive marketing, the offer, which was for N100 billion with a tenor of seven years, received a total subscription of N105.878 billion.

Oniha said that following the modest success of the first Sukuk and the achievement recorded from Sept. 2017 to Dec. 2023 when the last Sukuk was issued, the DMO had raised a total of N1.09 trillion.

“With this amount, over 4,100 km of roads and nine bridges across the six geopolitical zones in Nigeria and the Federal Capital Territory have either been constructed or rehabilitated.’’

Oniha said that the projects had brought substantial benefits, including reduced travel time improved road safety and job creation.

She said that the projects also created improved access to markets for remote farmers, increased access to public services like education and healthcare, and economic development as a whole.

“In addition to those benefits, other reasons for the sustained issuance are the fact that the Sukuk is project-tied, promotes financial inclusion and contributes to the development of the domestic financial market.

“Sukuk has been well accepted as demonstrated by the level of subscription received in the past.

“Investors get fulfillment of contributing to infrastructure development, and also getting a return in terms of income which is paid every six months,” Oniha said.

Experts say that if alternatives sources with minimum cost are pursued, Sukuk can be a viable option for funding large-scale infrastructure investments in Nigeria.

They urged the Federal Government to take immediate steps to increase non-Muslim awareness of Sukuk by engaging in more interactions with the public, to improve capital market intermediation and stimulate the issuance of more Sukuk as a reliable source of funding.

According to them, Sovereign Sukuk has contributed to financial inclusion and economic growth by providing Shariah-compliant investment opportunities, catering to certain underserved populations.

“It also attracts diverse investors, including Islamic finance institutions, broadening the investor base and deepening financial markets.

“Sukuk injects liquidity into the economy, promoting economic activity and growth.

“These contributions can have a positive impact on overall economic growth and development,’’ an economist said.

For investors, Sukuk provides a sense of project ownership and ensures that economic activities are based on tangible assets, giving investors a secure foundation for their investments.

For the government, Sukuk can be an effective financing instrument for infrastructure development and economic growth, as seen in countries like Indonesia.

However, experts advise government to establish a comprehensive approach to assist working units in technical ministries in project preparation, development, and service delivery.

They call for support and guidance for instrumental stakeholders like technical ministries to have the authority and tools to achieve Sukuk project success.

Sukuk can contribute to achieving sustainable development by benefiting individuals, institutions, societies, and the country as a whole.

Investors in Nigeria see Sukuk as an attractive option for diversifying their portfolios and supporting infrastructure development.

However, industry analysts believe that Sukuk, as a source of financing infrastructural deficit in Nigeria, needs to attract young retail investors.

They believe that Nigeria can benefit immensely from deep capital for financing infrastructure through Sukuk.

Uche Uwaleke, a Professor of Capital Market at the Nasarawa State University, Keffi, said that Sukuk was the route to go by the Federal Government in obtaining project-tied credit facilities.

According to Uwaleke, the issuance of N300 billion Sukuk by the DMO on behalf of the Fededal Government is highly commendable.

“Recall that when the Federal Government first entered the Sukuk market in 2017, only N100 billion worth of Sukuk was issued.

“So, the current one represents an improvement as investors are given more room to diversify their portfolio.

“I am particularly happy that the government is upscaling the use of Sukuk in plugging the infrastructure gap in Nigeria.

“The advantage that Sukuk has over the conventional bond is that it is asset-backed.’’

Uwaleke said that Sukuk proceeds must be tied to infrastructure which was why proceeds had been applied to road construction.

“Given that it is an infrastructure based bond, Sukuk represents a critical instrument for Nigeria’s economic development.”

The expert, however, said that the Sukuk market size in Nigeria was still very small despite the potentials

He urged governments, both at the federal and sub-national levels to utilise more of Sukuk when raising funds from the domestic capital market considering the huge infrastructural gap in the country.

“It is by so doing that government borrowing can be more impactful and also work to reduce the country’s debt burden,” he said.

He urged members of the public to take advantage the opportunity and invest in Sukuk because, unlike conventional bonds, as it was tax- free with a predictable and stable return.

Attahiru Machido, a stockbroker, said that the idea of Sovereign Sukuk was informed by the need to bridge infrastructure deficit in the country.

Machido said that the roads constructed with the proceeds of Sukuk would be effectively supervised to ensure that they meet the required standard.

“The roads must remain usable throughout the lifespan of the Sukuk ” he said.

Olalade Agboola, bank executive, said that Sukuk, like all other government securities, was backed by the full faith and credit of the federal government and charged upon the general assets of Nigeria.

“It also qualifies as securities in which trustees can invest under the Trustees Investment Act.

“It qualifies as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption and pension funds, amongst other investors,” she said.

As the Federal Government continues to explore funding options to bridge the wide infrastructure gap, experts hold that a cost effective, project-tied credit option like the Sovereign Sukuk is a veritable choice.(NANFeatures)

***If used, please credit the writer and the News Agency of Nigeria.

Sukuk, rewarding instrument to diversify investment portfolio—-Uwaleke

Sukuk, rewarding instrument to diversify investment portfolio—-Uwaleke

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By Kadiri Abdulrahman

A professor of Capital Market at the Nasarawa State University in Keffi, Uche Uwaleke, says Sukuk is the route to go by the Federal Government in obtaining project-tied credit facilities.

Uwaleke, who is also the President of Association of Capital Market Accaremics, said this in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja.

He spoke against the backdrop of the recent issuance of N300 billion Sukuk by the Debt Management Office (DMO).

According to Uwaleke, the issuance of N300 billion Sukuk by the DMO on behalf of the Fededal Government is highly commendable.

“Recall that when the Federal Government first entered the Sukuk market in 2017, only N100 billion worth of Sukuk was issued.

“So, the current one represents an improvement as investors are given more room to diversify their portfolio.

“I am particularly happy that the government is upscaling the use of Sukuk in plugging the infrastructure gap in Nigeria.

“The advantage that Sukuk has over the conventional bond is that it is asset-backed,” he said.

Uwaleke said that Sukuk proceeds must be tied to infrastructure which is why proceeds have been applied to road construction.

“Given that it is an infrastructure based bond, Sukuk represents a critical instrument for Nigeria’s economic development,” he said.

The expert, however, said that the Sukuk market size in Nigeria was still very small despite the potentials

He urged governments, both at the federal and subnational levels to utilise more of Sukuk when raising funds from the domestic capital market considering the huge infrastructural gap in the country.

“It is by so doing that government borrowing can be more impactful and also work to reduce the country’s debt burden,”he said.

NAN reports that the DMO had on Monday hosted an investor meeting for the issuance of N300 billion series seven Sovereign Sukuk in Abuja.

The Director-General of the DMO, Patience Oniha, said that since inception in 2017, Sukuk had become a product of choice for non- interest investors in the capital market.

According to Oniha, the acceptance of the Sukuk is an attestation of one of the major roles of the DMO to develop the domestic capital market, while also raising funds for the Federal Government.

She said that the Federal Government had been able to raise a total of N1.09 trillion through the Sovereign Sukuk since 2017, to support infrastructure development.

The director-general said that for the seventh series, the plan was to raise N300 billion to be used to further finance capital projects.

She recalled that the first Sukuk was issued in September 2017, adding that after extensive marketing, the offer, which was for N100 billion with a tenor of seven years received a total subscription of N105.878 billion.

She said following the modest success of the first Sukuk and the achievement recorded from Sept. 2017 to Dec. 2023 when the last Sukuk was issued, the DMO had raised a total of N1.09 trillion.

“With this amount, more than 4,100 km of roads and nine bridges across the six geo-political zones in NIgeria and the Federal Capital Territory (FCT) have either been constructed or rehabilitated, ” she said.

Oniha said that the projects had brought substantial benefits, including reduced travel time improved road safety and job creation.

She said that the projects also created improved access to markets for remote farmers, increased access to public services like education and healthcare, and economic development as a whole.

“In addition to those benefits, other reasons for the sustained issuance are the fact that the Sukuk is project-tied, promotes financial inclusion and contributes to the development of the domestic financial market,” she said.

She said that the Sukuk had been well accepted as demonstrated by the level of subscription received in the past.

“Investors get fulfillment of contributing to infrastructure development, and also get a return in terms of income which is paid every six months,” Oniha said.

She said that financial advisers play a crucial role in the issuance of Sovereign Sukuk, assisting the Federal Government of Nigeria through DMO.

“Their responsibilities include advising on the structure of the Sukuk, managing the offering process, and facilitating investor participation,” she said.(NAN) (www.nannews.ng)

Edited by Sadiya Hamza

DMO declares N1.09trn Sukuk proceeds

DMO declares N1.09trn Sukuk proceeds

296 total views today

By Kadiri Abdulrahman

The Debt Management Office (DMO) says the Federal Government has been able to raise a total of N1.09 trillion through the Sovereign Sukuk since 2017, to support infrastructure development.

The Director-General of the DMO, Patience Oniha, said this on Wednesday in Lagos, during “an all parties meeting” for the issuance of the seventh series of the Sovereign Sukuk.

She said that for the series, the plan is to raise about N300 billion to be used to finance capital projects.

According to Oniha, the meeting presented an opportunity to reflect on the progress that the DMO had made in the use of Sukuk as a means of raising funds for the government.

“We recall that the first Sukuk was issued in September 2017. After extensive marketing, the offer, which was for N100 billion with a tenor of seven years received a total subscription of N105.878 billion.

“Following the modest success of the first Sukuk and the achievement recorded from Sept. 2017 to Dec. 2023 when the last Sukuk was issued, the DMO has raised a total of N1.09 trillion.

“With this amount, over 4,100 km of roads and nine bridges across the six geopolitical zones in NIgeria and the Federal Capital Territory have either been constructed or rehabilitated, ” she said.

Oniha said that the projects had brought substantial benefits, including reduced travel time improved road safety and job creation.

She said that the projects also created improved access to markets for remote farmers, increased access to public services like education and healthcare, and economic development as a whole.

“In addition to those benefits, other reasons for the sustained issuance are the fact that the Sukuk is project-tied, promotes financial inclusion and contributes to the development of the domestic financial market,” she said.

She said that the Sukuk had been well accepted as demonstrated by the level of subscription received in the past.

She said that investors got fulfilment of contributing to infrastructure development, and also got a return in terms of income which is paid every six months.

The News Agency of Nigeria (NAN) reports that the financial advisers represented at the meeting include, Lotus Financial Services Limited, Buraq Capital Limited, Stanbic IBTC Capital limited and Greenwich Merchant Bank Limited and Vetiva Capital Management Limited.

They play a crucial role in the issuance of Sovereign Sukuk, assisting the Federal Government of Nigeria through DMO.

Their responsibilities include advising on the structure of the Sukuk, managing the offering process, and facilitating investor participation.(NAN)(www.nannews.ng)

Edited by Sadiya Hamza

DMO appoints Stanbic IBTC as new FG stockbrokers

DMO appoints Stanbic IBTC as new FG stockbrokers

441 total views today

By Kadiri Abdulrahman

The Debt Management Office (DMO) on Thursday unveiled Stanbic IBTC Stockbrokers Ltd. as the new stockbrokers of the Federal Government.

This is coming after the expiration of the tenure of CSL Stockbrokers Ltd., a subsidiary of First City Monument Bank (FCMB).

According to the Director-General of DMO, Patience Oniha, Stanbic is a comprehensive financial house with which the Federal Government has done business in other areas.

Oniha described the Stanbic brand as strong and respected with a wide reach.

“It is a name that is familiar to our target investors, and that marches what our needs are.

“Its reputation and diversification as a group qualify it for the appointment,” Oniha said.

She said that the DMO issued securities on behalf of the Federal Government, and the appointment of a government stockbroker is done on behalf of the Federal Government.

“There are two reasons why the DMO, which the largest issuers of securities in the market, needs a stockbroker.

“The first reason is a compliance issue. We are required to have a stockbroker whose functions are clearly defined. Secondly, there is a strong commitment to deepening to capital market.”

She said that there was the retail segment of the market that the DMO has been trying to develop; the savings bond and the sukuk.

“A major mandate for you is to ensure that we are able to attract more investors to the FGN securities, FGN savings bonds, as well as the sukuk, ” she said.

Bunmi Olarinoye, Chief Executive Officer of Stanbic IBTC Stockbrokers Ltd. expressed the firm’s commitment to growing the retail segment of the market.

Olarinoye said that the firm was also thinking of ways and ideas to reach that segment of the market.

“Enlightenment and awareness are the key points that we have noted down, and that we will focus on to ensure that a lot more people become aware of offers from the DMO.

” We are on board to ensure that this is successful and to take it to the next level,” she said.(NAN)(www.nannews.ng]

Edited by Deji Abdulwahab

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