Nigerian Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed has said that the current administration has invested the sum of N612.557 billion through the Sukuk instrument from 2017 to 2021 for construction and rehabilitation of key economic roads projects across six geo-political zones and the Federal Capital Territory.
Ahmed disclosed this while giving out 2022 Sukuk fund of N130 billion to two Ministries, Federal Ministry of Works and Housing and the Federal Capital Territory in Abuja on Monday, the Federal Ministry of Works and Housing received N110 billion, the Ministry of the Federal Capital Territory received N20 billion.
The SUKUK fund is a form of Public Private Partnership (PPP) which was among the funding options adopted by the Federal Government under President Muhammadu Buhari to fund the construction of critical roads in Nigeria.
The Minister said further that this symbolic event therefore is part of the celebration of the contribution of SUKUK Fund to road infrastructure development over the years, adding that the projects type instrument was one very successful initiative of the current Government toward financing of the critical infrastructure development in the country.
Ahmed stated further that this amount (N612.557bn) has been used to construct and rehabilitate exemption of 71 major roads covering 2808 kilometres and 4 bridges through Federal Ministry of Works and Housing, and section of 6 road projects covering 99 kilometres and 19 bridges by the Federal Capital Territory Administration.
She noted that the Sukuk of N130 billion will be released as part of the capital expenditure of the 2022 Appropriation Act which has been extended by the National Assembly to 31st of December 2023. “As at November 2022, we have released N1.88trn for capital expenditure and this is from N2.77trn NDA capital expenditure”, Ahmed said.
Receiving the cheque on behalf of the Ministry, the Minister of Works and Housing, Babatunde Fashola, gave an account of the nature of the nation’s road before the introduction of the SUKUK funding.
According to him, the total capital budget for road projects across the nation for Federal Ministry of Works and Housing in year 2015 was N18 billion. “As of 2015 Capital budget for Works was just N18 billion for all Nigerian roads at the time oil prices were just dropping shy of a hundred dollar per barrel and all that could be committed to Nigerian roads was just N18 billion.”
Explaining the impact of the meager amount spent on Nigerian roads then, the Minister said that construction companies were therefore laying off staff because the Federal Government was owning these companies. “That was the story before SUKUK,” he said.
Fashola stated further that this development could not fund the nation’s road projects adequately, adding that despite the fact that the Capital budget position of the Ministry was moved from N18 billion to over N260 billion in 2016, FG had to look into alternative sources of funding road projects because that was not still enough.
“That is where the SUKUK funding came in and through the SUKUK, we have completed several road, bridge projects across six geo-political zones of Nigeria. SUKUK financing has enhanced completion of some of the priority road and bridge projects across the country”, he said.
Also speaking, the Debt Management Office Nigeria (DMO) Director General, Patience Oniha revealed that in 2017, the sum of N100 billion was expended on road infrastructure, N200 billion in 2018, N362.56 billion in 2020, N612.56 billion in 2021, and N742.56 billion in 2022 respectively.
She thanked Sukuk for various sections of over 71 Nigerian roads and 4 bridges which have been either constructed or rehabilitated, easing the travel times and movement, improving transport logistics to aid trade and business and enhancing overall economic development.