Thursday, February 25, 2016

SEC, DMO collaborate on Sukuk

The Securities and Exchange Commission (SEC) and the Debt Management Office (DMO) are collaborating on the first sovereign Sukuk to be issued soon, reports ITRealms.

Till date, ITRealms recalls that it is only Osun State that issued a Sukuk, through which it raised N11.4 billion in 2013.

The Director General of DMO, Dr. Abraham Nwankwo and his counterpart at SEC, Mounir Gwarzo made these pledges to partner to ensure a deeper bond market including non-interest products such as Sukuk.

Speaking when the management of SEC visited DMO in Abuja, Nwankwo stressed the importance of non-interest products, explaining that a sovereign Sukuk issuance had 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 this year.

On his part, 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.

“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,” Gwarzo said.

Both government agencies therefore agreed on the urgent need to begin mobilizing capital in order to address the nation’s investment needs.

ITRealms also gathered that 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.

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