The Federal Government is in talks with the investment arm of Saudi Arabia-based Islamic Development Bank about issuing the country’s first sukuk as the government seeks to diversify its sources of funding.
“We are engaged in discussions with Nigeria,” the Chief Executive Officer of the Islamic Corporation for the Development of the Private Sector, Khaled al-Aboodi, said on Tuesday in an interview in Ivory Coast’s commercial capital, Abidjan.
He said, “Once they feel this is a good option to go, we’ll be very happy to accompany them on this process.”
Nigeria, home to about 80 million Muslims, is trying to diversify its funding sources to support an economy that has been battered by the collapse in oil prices since mid-2014.
Output is set to shrink this year for the first time since 1991, according to the International Monetary Fund.
The Director-General, Debt Management Office, Dr. Abraham Nwankwo, had said in January that selling sukuk would help in attracting capital from Gulf states and Islamic markets.
The Federal Government is planning to issue a $1bn Eurobond this year, which will be its first of such deal since 2013. Osun State has sold the only sukuk from the country.
In 2013, it raised N10bn ($32m) that is due in 2020 and pays the equivalent of 14.75 per cent interest.
“There has been issuance in the past by one of the states in Nigeria but now there are discussions at the level of the Federal Government,” Al-Aboodi said.
The timing of any potential transaction was up to the Nigerian government, he said.
