• Nigeria targets 300 billion naira (about $186.7 million) through a sukuk to build roads.
• The bond offers a 19.75% annual return and is open for subscription until May 20.
• The funds will support roadwork in all six geopolitical zones of the country.

The Nigerian government has launched a 300 billion naira fundraising (about $186.7 million) through an Islamic bond known as a sukuk. The funds will be used to build and repair roads and bridges across the country’s six geopolitical zones, the Ministry of Finance announced today.

This sukuk follows Islamic finance principles and does not pay traditional interest. Instead, it is based on a lease model called Ijarah, offering an annual return of 19.75%, paid in two installments each year. Subscriptions opened on May 12 and will remain available until May 20, with settlement scheduled for May 23.

Since 2017, Nigeria has used sukuk bonds to raise more than 1.09 trillion naira. These funds have gone toward building or restoring over 4,100 km of roads and nine major bridges. But despite these efforts, road conditions remain poor in many areas, especially in the southern part of the country, where potholes, impassable sections, and deadly accidents are still common.

The government hopes this latest funding round will help improve the road network, which suffers from a massive infrastructure deficit. Officials estimate it would take about 18 trillion naira just to close today’s gap. Looking ahead, nearly $3 trillion would be needed over the next 30 years to upgrade Nigeria’s roads in a lasting way.

This sukuk is not just about infrastructure, it is also a way to widen Nigeria’s funding sources at a time when the budget is tight. Unlike standard debt, sukuk appeals to investors who follow Islamic finance rules. That is a key factor in Nigeria, where more than half the population is Muslim.

The bond offers several benefits: it is considered a liquid asset by the Central Bank, enjoys tax exemptions for certain funds, and will be listed on the stock exchange.

Still, questions remain about project costs. Construction in Nigeria is often far more expensive than in other African countries, sometimes more than five times higher. Experts are calling for greater transparency to make sure these projects deliver real value for the money.