Nigeria is looking for financial and legal advisers and trustee firms to organise its first Islamic bond in the domestic market, the country’s Debt Management Office (DMO) said on Monday.
The OPEC member, which is Africa’s largest economy, is working on a debut sovereign sukuk but has yet to determine the size of a potential deal.
Nigeria, which is in a recession and needs to raise funds to plug a budget deficit, has set up a government committee to advise on the amount to be raised from the Islamic bond sale, the timing and jurisdiction of the issue.
According to Reuters, issuance of a sovereign sukuk is part of a plan by Nigeria’s debt office to develop alternative sources of funding and to establish a benchmark curve.
In a public notice, the DMO said it required the services of banks and an issuing house to serve as financial adviser, a legal firm to serve as a legal adviser and a trustee firm. It said bids for the roles are to be submitted by Jan. 9.
The advisers are expected to work with the debt office towards the sukuk issue at a date that is yet to be announced.
In October, the central bank issued guidelines limiting commercial banks’ investment in Islamic bonds issued by state governments to 10 percent of the total amount on offer and fixed a maximum tenor of 10 years for the bonds.
Nigeria has the largest Islamic pdopulation in sub-Saharan Africa. Around half of the 180 million people in Africa’s most populous nation are Muslims.