SEC Pledges To Partner DMO On First Sovereign Sukuk | Independent Newspapers Limited
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SEC Pledges To Partner DMO On First Sovereign Sukuk

Posted: Jan 22, 2016 at 10:05 am   /   by   /   comments (0)

The Securities and Exchange Commission (SEC) has pledged to collaborate with the Debt Management Office (DMO) on the issuance of Nigeria’s first sovereign sukuk .

The Director General of the DMO, Dr. Abraham Nwankwo, had on December last year, paid a courtesy call to the SEC office, during which the two chief executives agreed to reinforce partnership to deepen the domestic bond market.

While welcoming the SEC delegation, Nwankwo highlighted the importance of non-interest products to the DMO, adding that a sovereign sukuk issuance has been part of the institution’s strategic plan designed three years ago.

He solicited support from the SEC, especially in the area of capacity building in order to realise the goal of issuing Nigeria’s first sovereign sukuk within the year 2016.

Gwarzo assured the DMO of the commission’s continued support, while pledging to take measures that would help enhance the capacity of relevant staff of the DMO.

He added that the SEC would also enable nominated staff of DMO to participate at the capital market committee sub-committee on non-interest products to further deepen their capacity.

Gwarzo gave an overview of the leading role the SEC has played in the past to facilitate the development of the non-interest capital market in Nigeria.

He noted that beside designing a robust enlightenment programmes, the SEC has also led the capital market community to develop a blueprint for the growth of non-interest capital market in the country which forms part of the 10-year capital market master plan currently being implemented by SEC.

“Within the context of continued decline in the prices of crude oil in the international markets, attendant drop in both foreign exchange and government revenues as well as fragility of growth from major emerging markets like China, the need for alternative sources of capital to finance infrastructure becomes increasingly more compelling.

“Both government agencies therefore agreed on the urgent need to begin mobilizing capital in order to address the nation’s investment needs. Particularly, issuing a sovereign sukuk will attract significant amounts of affordable capital from the Gulf countries and other established Islamic markets around the world into Nigeria.”

According to the SEC Director General, issuing a sovereign sukuk would send the much needed positive message to the market amidst the negative investor sentiment that persists currently.

He expressed optimism that Nigeria’s maiden sovereign sukuk would be oversubscribed as both domestic and foreign investors have appetite for exposure to Nigeria.

He, therefore urged the DMO leverage the opportunity and make a mark on the sukuk market in spite of the challenging times.

When the SEC released rules on sukuk issuance in 2013, the State Government of Osun took advantage of the robust regulatory framework to issue Nigeria’s first sukuk in which it raised N11.4 billion.