The Head of Dubai Chamber, Ghana Office, Cyril Darkwa, is encouraging the Bank of Ghana (BoG) to see Islamic banking as a way to promote financial inclusion in the country. He pointed out that Islamic banking was a sector which offered huge potential growth for Africa and Ghana in particular.
Islamic finance assets, he noted, were projected to grow by nearly 72 per cent to exceed US$3.7 trillion by 2022, supported by global appeal and consumer demands, and, therefore, urged the country to take advantage.
Darkwa, who was speaking at a roundtable discussion, organised by the Dubai Chamber of Commerce Ghana Office in Accra, stated that this type of finance is being utilised by banks, companies and start-ups to tap into the large unbanked population in Africa and promote financial inclusion by providing more people with access to finance. He noted that unlike commercial banking, which thrives on interest rates on loanable funds, Islamic banking thrives on profit-sharing as it forbids charging of interest.
Darkwa further advised Ghana to embrace it to reap the benefits being derived by other African countries already practicing Islamic banking.
“Other western African countries such as Senegal and Nigeria have already made headway on this front by putting legal and regulatory frameworks into place to support the growth of Islamic banking in the region,” he noted.
In his presentation, an executive member of the Ghana Muslim Ambassadors, Dr Abubakar Muhammad Marzuq, said Islamic banking will be of great benefit to the country as a whole.
“Islamic banking gives opportunities in loans, neither does it entertain interest. Any one-sided burden in financial transaction is avoided in Islamic banking. Again, the issue of profit and loss, the giver of the loan and the receiver share the profit or loss when the need arises. These two values are enough to justify the relevance of Islamic banking and finance,” he defended.
Dr Marzuq, who doubles as a lecturer of the University of Applied Science, said although regulations were necessary to attract investors, awareness was more important to ensure a vibrant Islamic banking regime.
Given that, he said the nation has a responsibility to build a strong opinion in favour of Islamic banking and finance as a credible alternative banking model to help accelerate the national agenda.
He further called for an effective collaboration between the Islamic banking industry and the media in order to create awareness.
On his part, a Director of Business Development at GM Ambassadors, Mohammed Fawzi Aminu said there was the need to build capacities of BoG and the Ministry of Finance (MoF) to help hasten the progress towards adopting Islamic banking in Ghana. He said the capacity-building exercise would help the two institutions to develop the relevant framework needed for Islamic banking to thrive and attract investments into the sector.
Aminu lamented the lack of trust from potential investors in Islamic banking due to the lack of framework. He indicated that his outfit was in the process of engaging the BoG and MoF to help get proper training opportunities in Islamic finance.
“We have been able to get the Islamic Development Bank to agree to do some training workshops for the responsible entities such as the BoG, MoF, the Attorney-General and the Parliamentary Select Committee on Finance, which will commence soon,” he announced.