Kogi Heads to Capital Market, Targets ₦50bn Sukuk for Airport, Lokoja Mega Market

*Ododo fixes March–April take-off, cites oil derivation boost, Fitch rating, security reforms

Sunday Aborisade in Abuja

Kogi State Government has formally entered the Nigerian capital market with plans to raise ₦50 billion through a Sukuk bond to fast-track the construction of the Kogi International Airport and the Lokoja International Market, two flagship projects at the heart of its long-term development agenda.

The proposed Sukuk, unveiled in Abuja at an investor engagement and market sensitisation forum, is aimed at financing revenue-generating infrastructure designed to stimulate trade, logistics and economic growth across the state.

The forum drew a broad spectrum of capital market stakeholders, including regulators, issuing houses, trustees, fund managers, rating agencies and institutional investors.

Speaking at the event, the Commissioner for Finance, Budget and Economic Planning, Hon. Asiwaju Asiru Idris, said the ₦50 billion Sukuk was strictly asset-backed and tied to projects already provided for in the state’s 2026 budget.

According to him, the transaction aligns with Kogi’s 32-year development plan and is structured to ensure that the financed assets are capable of generating sustainable revenue.

“This Sukuk is not for consumption or recurrent expenditure. It is for infrastructure projects that will generate income, expand our economic base and ultimately pay for themselves,” Idris said.

He disclosed that Governor Ahmed Usman Ododo had directed that construction work on the projects should commence by March 2026, underscoring what he described as the administration’s sense of urgency.

“Our target is March. Some investors suggested May, but the governor has made it clear that we do not have the luxury of time. If it moves to April, that is still acceptable, but March remains the benchmark,” the commissioner stated.

Idris added that bidding for the airport project would begin within a week, with contract award expected within one month, paving the way for early disbursement of funds.

In a keynote address delivered on his behalf, Governor Ododo said the state’s decision to approach the capital market was driven by strategic ambition rather than fiscal stress.

“Kogi is coming to the market on the strength of discipline, transparency and a clear value proposition,” the governor said, stressing that the state was committed to honouring its obligations to investors.

He disclosed that Fitch Ratings had assigned Kogi State a “B” credit rating with a stable outlook, citing improvements in financial management and debt sustainability.

Ododo also pointed to a significant boost to the state’s revenue profile following the commencement of 13 per cent derivation receipts in January 2026, after Kogi was officially recognised as an oil-producing state.

“This development significantly strengthens our fiscal buffers and enhances our long-term repayment capacity,” he said.

Beyond oil revenue, the governor said the state was expanding its internally generated revenue base through agro-industrial value chains, MSME financing, industrial corridors and commercial hubs.

The Sukuk, structured as a senior unsecured Ijara Sukuk, has a programme size of ₦50 billion, a unit price of ₦1,000 and a tenor of between five and seven years. It will be issued through book-building to optimise rental rates, with a minimum subscription of ₦5 million.

Managing Director of AVA Capital Group, the lead financial adviser to the transaction, Mr. Kayode Fadahunsi, said the Sukuk was attractive because it was linked to tangible, income-supporting assets.

“These are projects that improve internally generated revenue and, quite literally, pay themselves down. That is why we are confident of strong investor appetite,” he said.

Fadahunsi said investor interests would be protected through multiple layers of oversight, including the Securities and Exchange Commission, a Sharia Advisory Board and an independent Project Management Committee, which would issue quarterly reports until the Sukuk is fully redeemed.

He added that Sukuk instruments were generally priced lower than conventional bonds, making them cost-effective for issuers, while any call options would only be exercisable after project completion and asset delivery.

On listing, he said both the Nigerian Exchange and FMDQ platforms were suitable, noting that the priority was liquidity and tradability.

Idris also assured investors that all regulatory requirements were being met, confirming that approvals had been secured from the State Executive Council and the House of Assembly, while documentation for an Irrevocable Standing Payment Order had been submitted to the Federal Ministry of Finance.

Addressing security concerns, the commissioner said the state had strengthened its security architecture through technology-driven and community-based initiatives, including the deployment of surveillance drones, absorption of vigilantes into the civil service and the training of over 1,050 hunters across local governments.

“Kogi is bordered by nine states, so regional security affects us. That is why the governor is investing in proactive, real-time security measures,” he said.

Describing Kogi as a strategic logistics and agro-processing hub, Ododo said the proposed airport would unlock export opportunities, attract private capital and deepen regional connectivity.

“We are not selling promises; we are offering fundamentals. This is about performance, not projections,” he told the investors.

With market entry targeted for the second quarter of 2026, Kogi’s ₦50 billion Sukuk is emerging as one of the most ambitious sub-national infrastructure financing initiatives in Nigeria’s capital market this year.