On May 12th, 2025, the Debt Management Office (DMO) of Nigeria launched a new ₦300 billion Sovereign Sukuk bond. But what exactly is a Sukuk bond and why should you consider it?
Here’s everything you need to know.
The Sukuk Bond and Why the Federal Government is Issuing It
A Sukuk is a non-interest Islamic financial instrument, similar to a bond, but structured in a way that complies with Islamic law (Sharia). So, instead of interest payments (which are prohibited in Islam), Sukuk holders earn rental income on tangible assets that are tied to the bond.
Because Nigeria faces a staggering ₦18 trillion road infrastructure deficit, the federal government is turning to alternative financing options like Sukuk to help tackle this.
This will directly contribute to building Nigeria’s infrastructure, which in turn boosts commerce, job creation, and national productivity.
Features of the New Sukuk Bond
Here are the key details of the new ₦300 billion Sukuk bond:
• Tenure: 7 years (matures in 2032)
• Return: 19.75% annual rental income
• Payment Frequency: Rental payments made semi-annually
• Minimum Subscription: ₦10,000 (in multiples of ₦1,000)
• Type of Repayment: Lump-sum payment at maturity date
• Offer Closes: May 20, 2025
So, What Does It Mean for You as A Nigerian?
1. Non-Interest Compliance: Sukuk bonds are ethical, non-interest faith-based investment instruments. They’re also a way to support national development while earning a solid return. So if this appeals to you, you should definitely consider it.
2. Tangible Projects: Unlike regular bonds, Sukuk funds are tied to specific infrastructure projects, such as road construction. This transparency makes it easier for you to track how your money is being used.
3. Attractive Returns: With a 19.75% annual return, the Series VII Sukuk offers competitive yields, especially in today’s economic environment.
Just make sure you consult a licensed financial advisor to assess how this fits into your broader investment strategy.
Bravewood provides Nigerian professionals with low-risk, high-return investment products, licensed by the Central Bank of Nigeria.
