No Islamisation Agenda Behind N100bn Sukuk, Adeosun Replies CAN

The Minister of Finance, Mrs. Kemi Adeosun, has advised Nigerians to disregard the allegation by the Christian Association of Nigeria (CAN) that the N100 billion Sukuk bond recently offered by the federal government was meant to Islamise the country.

Adeosun said this in an interview with journalists on the sidelines of an investors’ conference organised by Stanbic IBTC in Lagos at the weekend.

According to her, the bond offering which closed last Friday, was issued to raise funds for infrastructure development.

Adeosun said the government had identified projects the funds raised would be deployed to.

She explained: “So, there is no religious driver behind it. It is really a financial product to meet the financial needs. This particular one of N100 billion is going to be used for road projects.

“We have identified the road projects that it is going to be tied to and there is no religious attachment to it. South Africa even did a sovereign Sukuk before Nigeria. So, there is no Islamisation agenda at all.”

The minister stressed that the Sukuk was part of the government’s programme to deepen the financial market.

Furthermore, Adeosun disclosed that the framework for the debt instrument predated the present government.

“The committee started work in 2011. So, they have been working on it for six years, to structure products that would be compliant. Really, the Sukuk is about two things -one it is about raising money and deepening the financial market.

“We need to include many people in the market to raise the money that is needed for infrastructure. We have already introduced the savings bond which is for small investors.

“They were saying the process of getting into government securities was too complex, so we made the product for them. And this is another product. We have other products that we are coming up with,” she said.

According to the minister, a lot of investors were not even bothered about the ethical consideration surrounding the Islamic bond.

“Funny a lot of investors that we have been marketing the bond to are just looking at the yield. So, it is really just another product which we hope would deepen the market and bring more people in.

“Not everybody want to do bond or treasury bills. And we are still going to bring out more products,” she added.

CAN had opposed the floating of the Sukuk bond by the federal government, alleging it was meant to Islamise the country through the back door.

CAN in a statement by its General Secretary, Rev. Musa Asake, had demanded the abrogation of the laws and framework behind the bond and threatened to seek legal redress if that was not done.

Meanwhile, the National Christian Elders Forum (NCEF) yesterday insisted that the Sukuk bond was a surreptitious Jihad, contrary to Sections 1 and 10 of the 1999 Constitution.

The group in a statement by its Chairman, Chief Solomon Asemota, argued that even though other nations had adopted it, “the Nigerian Constitution forbids such infraction.”

 According to Asemota, Nigeria is a multi-religious and multi-ethnic society and the tenet of Sharia is opposed to the constitution.

 “Sharia and democracy can never co-exist in harmony,” he added.

The NCEF chairman noted an earlier statement by the Nigerian Supreme Council of Islamic Affairs (NSCIA) objecting to the statement of CAN on Sukkuk Bond in the country.

“While we share the concern of all well-meaning citizens of Nigeria that peace and mutual tolerance must be maintained, we cannot close our eyes to egregious infractions on the constitution and the advent of religious extremism and insurgency in the country, of which the Christian community seems to be the prime target, while Islamic religious extremists are the antagonists.

“Proponents of Sharia-Compliant Finance (SCF) often convey the impression that SCF is an “ethical” financial system whose roots and practice are to be found in the Quran, hadiths and traditions of early Islam.

“In fact, it was invented out of whole cloth in the mid-20th century by Muslim Brotherhood figures like Sayyid Qutb and Sayyid AbulA’la Al-Mawdudi.

“Its purpose was to provide yet another method to penetrate and undermine non-Sharia societies by stealthily insinuating Sharia into their free markets,” he explained.

The group described the allegation that CAN is Islamophobic as untenable and purely mischievous, saying if leaders of Islam in Nigeria had demonstrated inability to call Boko Haram and Fulani herdsmen to order, after the atrocities both terrorist organisations had committed largely against Christians, churches, Christian businesses and Christian communities, “it would be unfair and unjust for the same leaders of Islam to turn around and accuse Christians of Islamophobia.

“It is akin to slapping a man and yet complain that the man screamed. Do leaders of Islam expect Christians to keep mute while violent Jihad (Boko Haram, Fulani herdsmen) and stealth Jihad also known as stealth jihad with money (Sukkuk) are all used to negate Section 38 (1) of the constitution and destroy the secularity of the Nigerian state?” Asemota asked.

However, the N100 billion Sukuk bond has been described as a huge success as a lot of institutional investors, and retail investors participated in the offer.

The offer to the public for the N100 billion seven-year sovereign Sukuk opened on September 14, 2017 after a roadshow by the DMO and closed to investors on September 22, 2017 according to the offer circular on the DMO’s website.

The next phase of the exercise, according to financial analysts, is for the Financial Advisers-FBN Merchant Bank Ltd and Lotus Financial Services Ltd to collate offer returns after receiving submissions from the Receiving Banks and Placement Agents. The Sukuk will then be allotted to successful investors after this process. 

But there are indications that the financial advisers might require some time for the collation and allotment due to the level of interest shown by retail investors in the Sukuk offer.

 The federal government had expressed the desire to use the Sukuk issuance as a tool for financial inclusion by giving retail investors the opportunity to invest in the country’s development. This was why the DMO fixed N10,000 as the minimum subscription for the offer.

A source said retail investors have shown great interest in this maiden Sukuk offer and this could make the allotment process a little longer. 

“If you monitored the process you must have seen that as at the close of work last Friday many retail investors were still submitting their forms,” a source hinted.     

 The pre-offer roadshow by the DMO generated huge interest in the Sukuk as a new option for financing infrastructure in Nigeria. It sensitised target investors about the features and benefits of the Sukuk, which, apart from serving as an alternative source of funding for the government, will also serve to diversify the investor base for Federal Government of Nigeria (FGN) Securities, promote financial inclusion and deepen the domestic capital market.

The proceeds from the Sukuk issuance would go into financing specific road projects already listed by the Federal Ministry of Power, Works and Housing. The Sukuk is different from conventional bonds as it is an asset-based security, not a debt instrument, and represents ownership in a tangible asset, service, project, business or joint venture.

The Sukuk fits into the government’s debt strategy of borrowing to finance capital projects contained in the budget. It also ensures that government borrowings are used to finance specific development projects which have multiple economic and social benefits for citizens.

Features of the Sukuk include safety of investment, regular rental income which is tax-free and liquidity for holders as they will be listed and traded on The Nigerian Stock Exchange and the FMDQ OTC Securities Exchange Plc. It also serves as a collateral to access loans from the bank.

CREDIT: THISDAY