Elections: DMO Assures Foreign Investors Won’t Pull Out Monies from Sukuk Bond 




By Tony Obiechina, ABUJA
The Director General, Debt Management Office (DMO), Ms Patience Oniha has assured that foreign investors would not withdraw their monies from the Federal Government’s Sovereign Sukuk Bond because of the forthcoming 2019 General Elections kicking off in February.
Oniha gave the assurance during an interview with some Finance Correspondents in Abuja after the Federal Government released N100 billion for the rehabilitation of 28 key economic roads across the six geopolitical zones of the country.
“I won’t tie it to the elections, I will say what is happening globally, what is happening to interest rate in the international market because the foreign investors are looking for opportunities where ever in the world; it is safe and returns are good where they can also come in and go out easily more like ease of entry and exit; so, to that extend, I would say probably bigger issues happening outside in terms of interest rates that would affect them more busy than the elections”.
“But let me quickly say; I believe, in may 2015 for instance, we actually had a higher level of subscription level from foreign investors. When I say higher, when you think they are waiting to see what happens for that FGN bond auction it was actually higher”, she added.
“Having said that, lets quickly look at our strategy. Generally, we are not looking at concentrating on  one investor group which explains why we started diversifying to various other investors segment. We are happy to have foreign investors but we also want to have more domestic investors participate in the market”, the DG added.
 
On use of Sukuk to fund other infrastructure, Ms Oniha said, “that should be in the works but always remember what we are funding with the sukuk. The sukuk is not a different borrowing, it is a borrowing that was already included in the budget and then projects that are included in the budget.
“Our first experience was last year, so we are doing roads because the impact was so huge so we tried that and it worked. So I think going forward we should be able to extend it to other capital projects”.
Speaking on the conditions and the repayment plans for Sukuk, the Director General explained that the current Sukuk was issued in December last year, with a maturity target of seven years.
 “We would redeem it at maturity meaning seven years from December last year; we will redeem it at maturity; the rentals like our FGN bond are paid every six months at 15.73%, I think”, she further explained.



Be the first to comment