Nigeria’s government may plan to issue its first sovereign Islamic bonds (sukuk) in the second half of 2016. The issuance, if finalized, follows similar sovereign issuances from Senegal and Ivory Coast.
The nation set up a multi-agency committee to work out the modalities for the issuance, which includes the Debt Management Office (DMO), Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN) and Infrastructure Concession and Regulatory Agency (ICRA), among others.
Currently, Nigeria had only one sub-national Sukuk bond which was issued by the Osun state government. Two other states, Kebbi and Sokoto states have indicated interests in issuing Sukuk bonds.
The absence of a sovereign Sukuk bond to serve as benchmark for other government and corporate Sukuk issuance has been cited as a drawback for the growth of non-interest Sukuk bond market.
Standard and Poor’s rating services (S&P) estimated that global Sukuk issuance could reach up to $55bn in 2016.