Understanding FGN Sovereign Sukuk in my opinion would help ease the growing tension arising from the perception of a section of the Nigerian Christian Community that this FGN Sovereign Sukuk carries a hidden agenda. 

As a Christian, I join voices with fellow Nigerians to seek and insist on peaceful co-existence based on mutual understanding, the respect of our individual rights as well as the respect for the Constitution. I believe this can be easily achieved through factual communication.

I have read in the Dailys and received several messages via WhatsApp and E-mails on the bid of the Federal Government of Nigeria to Islamise Nigeria through the backdoor.

The content of the message under reference gives cause for concern and accordingly, I sought to have more understanding of the operational dynamics of the fund and why would Nigeria, a secular country go against the spirit of the Constitution?

Understanding FGN Sovereign Sukuk

Federal Government of Nigeria (FGN) sources finance to fund its operations (capital and recurrent) through internally generated revenue, investment income, borrowings etc.

Government borrowing is sourced through the Debt Management Office (DMO)

One of such borrowing is through the issuance of bonds to the public.

These bonds are investments by the bondholder on which they earn an income

Income could be in the form of interest or rental or profit sharing to name a few

1. The Christian faith does not place a restriction on the type of income derivable from an investment provided it is legitimate
2. The Muslim faith does not subscribe to receiving interest payment on investments…this means that there is a limit to window of opportunities available to the Muslim to invest and for FGN to source funds.

Sukuk is an Islamic equivalent of bonds. They can be structured as asset backed whereby the investors hold a claim on the underlying asset (the roads being constructed) or they are asset based where the claim is on the originator of the bond (FGN).  Sovereign Sukuk is a non-interest bearing security meant to cater for 2. above and by default any investor that is interested in that outlet. The IMF has approved some Islamic banking proposals, one of which is Sukuk. As noted by the International Monetary Fund (IMF), Sukuk is meant to cater for the unbanked sectors of an economy

While FGN pays interest on other bonds issued, it would pay rental on Sukuk.

Like other FGN bonds it would be issued by the Debt Management Office (DMO). 

Is it not in our collective interest that all Nigerians capable of investing should have the same legitimate opportunities?

Benefits of a Sovereign Sukuk to the investor include

• Regular cash flow as Rental Income will be paid half-yearly to Sukuk Holders.
• Safe and risk free investment as they are a direct obligation of the FGN and backed by the full faith of the FGN.
• Acceptable as collateral for borrowing from banks and other financial institutions.
• Classified as Liquid Asset by the Central Bank of Nigeria.
• Listed and traded on The Nigerian Stock Exchange and the Financial Market Dealers Quotation OTC Securities Exchange thereby providing opportunities for Sukuk holders to buy or sell on any business day. 

Who can Invest
Pension Fund Administrators, Insurance Companies & Takaful Operators, Stockbrokers, Asset Managers, Portfolio Managers, Fund Managers, Banks and Non-interest Banks, Faith-based Institutions, Pilgrim Welfare Boards, Trustees, Corporates, Co-operative Societies, Staff Schemes, Non-Bank Financial Institutions, Trade Unions, Community Associations, Cultural Associations, Religious Institutions, Individuals, etc. 

Use of Proceeds
The Sukuk proceeds will be used exclusively to fund the construction and rehabilitation of 25 roads across 6 Geopolitical zones in the country.

As Nigerians it is healthy that all parties are keeping watchful vigilance over transactions and relationships the FGN enters into on our behalf, ask questions just as the Christian Association of Nigeria (CAN) has done and we seek/listen for understanding to improve our relationships and create a friendlier robust economy.