Wednesday, October 5, 2022

Increased Sukuk, Green Bond investments good for Nigeria’s ailing economy: Experts

Sukuk and Green bonds gained prominence as some of the safest investment portfolios in the last three years.

• August 31, 2021
Temi Popoola, Lamido Yuguda
A composite of Temi Popoola and Lamido Yuguda used to illustrate the story

Operators in Nigeria’s capital market Tuesday proposed an increase in Sukuk and Green bond investments, stating that they have the potential to grow the country’s economy.

At a virtual event on ‘Sukuk and Green bonds: More than just investing’, organised by the Nigerian Exchange (NGX) Limited in partnership with APT Securities and Funds Ltd. in Lagos, said Sukuk and Green Bond provide alternative means of investments.

Lamido Yuguda, Director-General of the Securities and Exchange Commission (SEC), said Sukuk and Green bonds had the potential to deepen the financial system of the economy.

On the attractiveness of Green bond, Mohammed Adamu, Team Lead, Securities Issuance Unit, Debt Management Office (DMO), said despite the uncertain global business climate that we experienced because of COVID-19 in 2020, “Green Bonds increased from 266 billion dollars in 2019 to 269 billion dollars in 2020.”

According to him, “Green bonds still constitute about one per cent of the outstanding bond market issuance, so the market is still a fraction of the total global market. So, there is still a lot to be done and a lot of space for issuance of green bonds.”

Temi Popoola, NGX Chief Executive Officer, said Sukuk and Green bonds gained prominence as some of the safest investment portfolios in the last three years.

“According to the fixed rating, Sukuk issuance increased by 13 per cent Year-on-Year to 118 billion dollars at the end of Q4 of 2020, of which about 35 per cent is estimated between 2021 and 2023.

“Furthermore, Sukuk supply is expected to rise in 2021 after a strong run in Q2 of 2021 supported by strong investor appetite and issuer funding diversification needs.

“From an economic perspective, Sukuk continues to play a critical role in infrastructure financing and funding for health, education and sustainable development, which has brought significant impact for many nations globally,” he said.

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