sukuk

"So if I buy this thing, am I lending government money or not?" Adaeze asked her uncle, waving her phone at the news of the FGN Sukuk offer. "Not exactly," he said, sipping his tea. "You are buying a piece of a road."

She frowned, because that sounded strange for something she saw advertised beside treasury bills and savings bonds. Her uncle explained that Sukuk works differently from a normal bond. A normal bond is a loan, and the borrower pays you interest for the use of your money. Islamic finance does not allow interest, called riba, so Sukuk is built around real assets instead, things like roads, bridges, or power projects.

When you buy Sukuk, you are technically buying a share in that asset or project. The government or company uses the money raised to build the thing, and you earn a return from the profit or rental income that asset generates, not from interest on a loan. In Nigeria, the Debt Management Office has issued Sukuk several times to fund road construction, and Nigerians have queued for it because the returns have been competitive and the roads are visible proof the money did something real.

In the United Kingdom, the government issued its own Sukuk years back too, partly to make London friendlier to Islamic finance and attract investors from the Gulf who wanted Sharia compliant options. A Nigerian in London sending money home to help a relative invest in the next Sukuk offer is doing something quite ordinary now, it has become a normal part of the investment menu, not a niche product.

Adaeze's uncle finished his tea and put it simply. "You are not a lender chasing interest. You are a part owner watching a bridge get built, and getting your share of what it earns."