West African country to become first to debut Sukuk - BY IFN

West African country to become first to debut Sukuk

Daily Cover

NIGERIA: Market punters could be proven right if Nigeria successfully executes its debut Sukuk issuance before the end of July, to become the first African country to issue Islamic paper. According to Reuters, the agricultural state of Osun, located in southwest Nigeria is in the midst of planning a seven-year NGN10 billion (US$62.3 million) Sukuk to be used towards financing the development of soft infrastructure; namely education projects. The paper has been rated ‘A’ by Agusto & Company, a Nigerian credit rating agency, and is expected to list on the Nigerian Stock Exchange. Marketing of the papers will begin after the issuers receive the green-light from the Securities and Exchange Commission. The Sukuk will be part of the state’s NGN60 billion (US$373.83 million) debt raising program which commenced last year. A 2011 report by the Pew Forum, a US-based think tank, states that the Muslim population in Nigeria is expected to grow by 50% to 117 million in 2030; constituting 51.5% of the West African country’s total population. In terms of education, however, Muslim women in Nigeria are said to be lagging behind non-Muslim women by an 11% margin – with only 3% of Muslim women receiving higher education. The republic, which has been riddled with religious-based violence over the years, has a higher Muslim concentration in the north, compared to other parts. In March this year, the Securities and Exchange Commission of Nigeria had approved laws to enable the issuance of Sukuk. The country’s government and central bank are also believed to be committed to growing Islamic finance in the country, with Sanusi Lamido, the governor of the Central Bank of Nigeria stating recently that Sukuk is vital to the growth of the republic’s infrastructure development efforts, and if structured properly, the issuance of Sukuk will complement the government’s plans.