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DMO to encourage sukuk bond in Nigeria

Osun State had last year raised N11.4bn sukuk, an Islamic bond, and the State Governor, Rauf Aregbesola, came under attack for this.

But according to a statement made available to our correspondent in Osogbo on Sunday by the media aide to the governor, Mr. Semiu Okanlawon, the director-general of the DMO has commended the governor for being a trailblazer in this regard.

The DMO director-general promised to encourage sukuk issuance in Nigeria.

The statement also quoted Nwankwo to have said that Osun debt profile was a sustainable one and was healthy for the economic growth of the state.

Nwankwo, according to the statement, spoke on the sideline of a three-day retreat for members of the House Committee on Aids, Loans and Debt Management.

Nwankwo said, “It is our plan to encourage the issuance of sukuk in Nigeria because we need to diversify the instrument in the bond market.

“We want to make sure that all segments of the society is captured in the bond market because there are some groups of people or individuals who do not want to participate in ordinary bond because of interest.

“Our office, DMO, and others are working hard to introduce sukuk in Nigeria. We are delighted that Osun took the initiative and helped in introducing it in Nigeria. So, Osun is one of the best states in public debt management.”

The opposition parties in Osun State had been claiming that Osun debt profile ranged between N350bn and N419bn.

But Nwankwo who did not give the figure on the actual debt explained that the state needed to be encouraged in term of the management of debt because it had not borrowed beyond its capacity.

According to the director-general, the nation’s debt GDP ratio has fallen from 22 per cent to 13 per cent.

He said, “Our debt is sustainable because the GDP is much lower now. However, in spite of that, government will continue to be very prudent, conservative in its spending.

“From my submission, I told the lawmakers that the GDP ratio is about 12 per cent and this includes both external and domestic debt for both the federal and state governments.”

He decried what he described as the poor attitude of Nigerians to paying tax.

He stated that many enterprises in the country’s small and medium scale businesses that should be in the tax bracket were not.

Punch, Money Guide –Monday July 07, 2014

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