Sukuk, green bonds to spur investment

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The Debt Management Office (DMO) has defended the issuance of Sukuk and green bonds, also known as ethical investments, by the federal government.

At a business roundtable in Abuja, the Director-General of DMO, Ms. Patience Oniha, said that the government was promoting investments in Sukuk and other green bonds to promote financial inclusion and increase investment in ethical financial products.

Speaking on the experience garnered from issuing oversubscribed Sukuk bonds in recent times, Ms. Oniha said government was favourable disposed to invest in ethical products to swell its investment products base.

 Oniha said: “The experience from the issuance of Sukuk bonds has been beneficial to the government.

“The Sukuk is one of the landmark achievement not only in terms of fund but the projects being implemented. We will like to do more with Sukuk because it’s transparent but the major issue for us now is to increase the investor base for ethical products.”

Another speaker at the roundtable and Managing Director of Sigma Pensions, Mr. Dave Uduanu, called for the broadening of ethical investments in the country to help government achieve its financial inclusion drive.

“While there have been increasing penetration of financial solutions, the ethical investment space had yet to be fully developed.

“Despite the under developed nature of ethical investments, there are significant opportunities for growth and innovations in that segment of the economy.”

He highlighted some of the opportunities and benefits of ethical investment to include vibrant ethical financial system that would help crowd in a new class of institutional and retail investors into the Nigerian financial system which will help deepen the breadth and sophistication of the fund management industry. 

“A key tenet of robust financial markets is the existence of many players on both demand and supply having diverse opinions, desires and needs which allow for a more efficient price setting mechanism. 

“It will help drive greater financial inclusion and pension enrollment. Nigeria’s financial exclusion rate at the end of 2018 was estimated at 37 per cent with large exclusion observed in the northern regions. 

“Among other reasons, the reluctance towards the formal financial sector in the north likely reflects unease with conventional products.

“With the option of retirement savings products suited to ethical preferences, it is easy to see a ready outlet for raising financial inclusion.”

Holding the roundtable discussion he said has become necessary “to provide a platform to attract fresh investors and drive increased market participation by investors looking to maintain their values and principles while building their portfolios.”

The Debt Management Office (DMO) has defended the issuance of Sukuk and green bonds, also known as ethical investments, by the federal government.

At a business roundtable in Abuja, the Director-General of DMO, Ms. Patience Oniha, said that the government was promoting investments in Sukuk and other green bonds to promote financial inclusion and increase investment in ethical financial products.

Speaking on the experience garnered from issuing oversubscribed Sukuk bonds in recent times, Ms. Oniha said government was favourable disposed to invest in ethical products to swell its investment products base.

 Oniha said: “The experience from the issuance of Sukuk bonds has been beneficial to the government.

“The Sukuk is one of the landmark achievement not only in terms of fund but the projects being implemented. We will like to do more with Sukuk because it’s transparent but the major issue for us now is to increase the investor base for ethical products.”

Another speaker at the roundtable and Managing Director of Sigma Pensions, Mr. Dave Uduanu, called for the broadening of ethical investments in the country to help government achieve its financial inclusion drive.

“While there have been increasing penetration of financial solutions, the ethical investment space had yet to be fully developed.

“Despite the under developed nature of ethical investments, there are significant opportunities for growth and innovations in that segment of the economy.”

He highlighted some of the opportunities and benefits of ethical investment to include vibrant ethical financial system that would help crowd in a new class of institutional and retail investors into the Nigerian financial system which will help deepen the breadth and sophistication of the fund management industry. 

“A key tenet of robust financial markets is the existence of many players on both demand and supply having diverse opinions, desires and needs which allow for a more efficient price setting mechanism. 

“It will help drive greater financial inclusion and pension enrollment. Nigeria’s financial exclusion rate at the end of 2018 was estimated at 37 per cent with large exclusion observed in the northern regions. 

“Among other reasons, the reluctance towards the formal financial sector in the north likely reflects unease with conventional products.

“With the option of retirement savings products suited to ethical preferences, it is easy to see a ready outlet for raising financial inclusion.”

Holding the roundtable discussion he said has become necessary “to provide a platform to attract fresh investors and drive increased market participation by investors looking to maintain their values and principles while building their portfolios.”