in the name of God, the compassionate, the merciful
Open Letter to the Honorable Minister of Finance and the Governor of the Bank of Ghana
Subject: Urgent Need for the Implementation of Islamic Banking and Finance for Ghana as promised in the new government’s manifesto.
Dear Honorable Minister of Finance and Governor of the Bank of Ghana,
I write to you with a sense of urgency and optimism, urging the Government of Ghana and the Bank of Ghana (BoG) to prioritize the implementation of Islamic banking and finance as a strategic tool to salvage and revitalize our economy. As we all know by now, our newly elected president promised this in his manifesto during the political campaign season and has even reiterated this after his victory. As Ghana continues to navigate the challenges of economic recovery, we must explore innovative and inclusive financial systems that can attract investment, foster financial inclusion, and promote sustainable economic growth. The time is now.
Islamic banking and finance, rooted in the principles of Sharia law, offer a unique and ethical alternative to conventional banking. It prohibits interest (riba) and speculative activities (gharar), and instead promotes risk-sharing, asset-backed financing, and socially responsible investments. These principles align with the values of fairness, transparency, and shared prosperity, which are essential for building a resilient and inclusive economy.
The benefits of Islamic banking and finance for Ghana are manifold:
1. Attracting Foreign Investment: The global Islamic finance industry is valued at over $3 trillion and continues to grow rapidly. By implementing Islamic banking, Ghana can tap into this vast pool of capital, particularly from the Gulf Cooperation Council (GCC) countries and other Islamic finance hubs. This will not only diversify our sources of foreign direct investment but also strengthen our economic ties with these regions.
2. Enhancing Financial Inclusion: A significant portion of Ghana’s population remains unbanked or underbanked due to religious or cultural reasons. Islamic banking provides an alternative for individuals and businesses who avoid conventional banking systems due to religious prohibitions on interest. This will broaden access to financial services and empower more Ghanaians to participate in the formal economy.
3. Promoting Ethical and Sustainable Investments: Islamic finance emphasizes investments in real assets and socially beneficial projects, such as infrastructure, agriculture, and renewable energy. This aligns with Ghana’s development goals and can drive sustainable economic growth while addressing critical social and environmental challenges.
4. Stabilizing the Financial System: The risk-sharing nature of Islamic finance can contribute to the stability of our financial system by reducing excessive leverage and speculative practices. This is particularly relevant in the wake of recent global financial crises and their impact on emerging economies like Ghana.
To realize these benefits, I urge the Ministry of Finance and the Bank of Ghana to take the following steps:
1. Develop a Regulatory Framework: Establish a robust legal and regulatory framework to accommodate Islamic banking and finance. This includes amending existing banking laws or enacting new legislation to recognize and regulate Islamic financial products and institutions.
2. Capacity Building: Invest in training and capacity building for regulators, bankers, and other stakeholders to ensure a smooth transition and effective implementation of Islamic banking practices.
3. Public Awareness Campaigns: Launch educational campaigns to raise awareness about Islamic banking and finance among the general public, businesses, and investors. This will help dispel misconceptions and foster acceptance of this alternative financial system.
4. Pilot Programs: Introduce pilot programs or partnerships with established Islamic financial institutions to test the viability and impact of Islamic banking in Ghana.
The implementation of Islamic banking and finance is not just a religious or cultural consideration; it is an economic imperative. As we strive to rebuild our economy, we must embrace innovative solutions that can unlock new opportunities, promote inclusivity, and ensure sustainable development.
I trust that the Ministry of Finance and the Bank of Ghana will give this matter the attention it deserves and take the necessary steps to make Islamic banking and finance a reality in Ghana. Together, we can build a stronger, more resilient economy that benefits all Ghanaians.
Yours sincerely,
YAHAYA ILIASU MUSTAPHA ,
Founder and manager Islamic Finance TV Gh’ on Facebook tiktok & YouTube
+233 246873726
