Niger gov seeks assembly’s approval for N25bn Sukuk bond

Daniel Atori

 

The Governor of Niger State, Alhaji Abubakar Sani Bello, has written to the state’s House of Assembly, for an approval to access N25 billion Sukuk development bond. This will be the second time the governor will be introducing such a request to the assembly, after Senator David Umaru, then lawmaker representing APC-Niger East, had kicked against Bello’s plan to take a N21.5 billion Sukuk bond.

It should be recalled that the governor had introduced a request to take N21.5 billion Sukuk bond to the 8th Assembly but the request was denied due to what the legislators termed “hidden high costs” thereby leading to a frosty relationship between the Executive and the 8th Assembly.

The 8th Assembly noted that the contingencies, professional fees, underwriting and consultancy fees inclusive of the 17 per cent interest rate which was to the tune of over N10 billion were too much. It was also observed that at the end of the seven years repayment period, the state would have paid N31.5 billion for the N21.5 billion bond it planned to take. In a letter written to the assembly and read at plenary by the Speaker, Abdullahi Bawa Wuse, the governor explained that the government intends to take the bond because of its commitment to the objective of transforming the state. He said: “The government reviewed its capital intensive development projects and resolved to carryout some high leveraged projects and high impactful visible projects.

“Thus, the government seeks to upgrade, construct and reconstruct some essential roads as wellness improves health. The capital intensive projects which requite long term funding will mostly be funded through an N25 billion infrastructure development Sukuk Bond programme.” The letter further stated that the bond would be issued in two tranches of N15 billion and N10 billion consecutively. “The purpose of this request is to seek the approval of the Niger Assembly for the government of Niger state to raise N25 billion through a Sukuk Bond issuance programme in multiple sand consecutive tranches. We also ask for permission to issue invokable standing payment orders for the repayment of the bond.” Deliberating on the letter, the Deputy Speaker, Bako Kassie Alfa, said the letter did not state the duration of the payment plan or give adequate information on the bond.

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