Sanusi recently noting that the Osun State Government successfully issued a sub-sovereign Sukuk worth N10 billion for building public schools and the issuance was oversubscribed said “The issuance which was oversubscribed and had a full up take by the originator shows the buoyancy of our capital market and its need to take up new alternative instruments,”.
Following the efficacy of Islamic finance in attracting liquidity, the Central Bank of Nigeria (CBN), Debt Management Office (DMO) and the Infrastructure Concession Regulatory Commission (ICRC) are exploring ways to use Sukuk to build airports, railways and refineries.
Speaking at the National Conference on Islamic Banking and Finance in Nigeria, yesterday, in Abuja, the CBN Governor, Mallam Sanusi Lamido Sanusi, said that, in view of the potentials of Sukuk to develop economies in building infrastructure, the CBN in conjunction with other sister institutions like the Securities and Exchange Commission(SEC), ICRC, DMO have assembled a technical team to explore the prospects of alternative modes of finance and set out the procedures for using the modes in the development of infrastructure.
He stated that the team have identified potential projects that could be financed by sovereign and sub-sovereign Sukuk.
“These projects include upgrade, maintenance, repairs and new construction of roads and highways; upgrade, renovation and new construction of airports, rehabilitation of the rail line and the building of a new rail line and railway stations. Part funding for the construction of the planned three refineries and mass housing and light rail for some states in the federation,” he said.
This, he said, is in addition to the role that Sukuk issuance serves in deepening domestic capital markets.
Sanusi noted that the Osun State Government successfully issued a sub-sovereign Sukuk worth N10 billion for building public schools and the issuance was oversubscribed.
“The issuance which was oversubscribed and had a full up take by the originator shows the buoyancy of our capital market and its need to take up new alternative instruments,” he said.
To further underscore the importance of Islamic Sukuk, the governor hinted that the Prime Minister of United Kingdom, David Cameron, announced the plan to make London not just a capital for Islamic finance to the western world, but one that will stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance, anywhere in the world.
“The UK plans to do this through the issuance of an Islamic bond Sukuk worth 200 million GBP by the UK Government which it intends to do as early as next year. It also plans to create an islamic index on the London Stock Exchange for Shariah-compliant securities to attract more islamic investors.”
“The UK is embarking on this plan despite the fact that it is a non-Islamic country which illustrates what we have been saying that Islamic finance, though based on sharia, is a financial product with clear goals and it is accessible to all,” he said.