Dear Mr. President-Elect,
On behalf of concerned citizens and stakeholders in Ghana’s economic transformation, I extend heartfelt congratulations on your election as the leader of our great nation. Your victory signifies hope and renewal for the people of Ghana, particularly given the ambitious manifesto you have outlined to rebuild and revitalize the economy.
Among your many promises, your commitment to implementing Islamic Finance for the first time in Ghana is a visionary step. I urge you to prioritize this initiative within your first 100 days in office. Islamic Finance presents a unique, ethical, and inclusive financial model that has proven transformative in many countries facing challenges similar to ours.
For example, back in 2022, GH¢600 will give you $100, while GH¢6000 will provide you with $1000. Today, GH¢600 will give you just $32 while GH¢6000 gives you a peanut of $320. This means 68% of our cedis’ purchasing power has been whipped out. For some years now we have not been able to balance the budget and most of the time we borrow to consume and not to invest or build infrastructure.
In addition, no one is ready to lend Ghana money on the commercial due to our bankruptcy. Cocoa, which has been the bedrock of our economy for decades, is now at a 30% pre-COVID production level. Even though inflation has fallen, prices are still as high as they are now.
Ghana’s economy was in a coma; even though it has been taken off life support, the economy is still in the intensive care unit. Now, we also have a looming energy crisis on our hands. Among your other policy plans, consider the implementation of this innovative financial system in your first 100 days in office, it may assist in the stabilization of our economy since its foundation is based on tangible asset-based and is asset-backed. This will neutralize inflation in our economy.
Issuance of Sukuk for our Energy Sector
Ghana’s energy sector has long been a bottleneck for economic growth, plagued by high debt levels, inefficiencies, and inconsistent power supply. The issuance of Sukuk (Islamic bonds) can offer a sustainable solution.
Unlike conventional bonds, Sukuk is asset-backed and promotes shared risk and reward. These bonds can attract domestic and foreign investors, particularly from Gulf Cooperation Council (GCC) countries and other Islamic finance hubs, to finance critical energy infrastructure projects.
The proceeds from Sukuk can be used to modernize our power plants, invest in renewable energy, and stabilize the supply chain. Moreover, the ethical principles of Islamic Finance ensure that funds are utilized transparently and for tangible assets, reducing risks of mismanagement.
A revitalized energy sector would not only enhance productivity but also boost investor confidence in Ghana’s broader economic prospects and enhance your 24-hour economic policy.
Stabilizing the Economy and Fighting Inflation
The implementation of Islamic Finance can assist in stabilizing the economy and combating inflation in several ways:
Promoting Financial Inclusion: Islamic Finance principles prohibit excessive interest (riba) and speculative activities (gharar), which often marginalize low-income groups. By introducing Sharia-compliant financial products, you can bring the unbanked population into the formal financial system, enhancing savings and investments.
Attracting Foreign Direct Investment (FDI): Ghana stands to gain access to a vast pool of capital from Islamic Finance markets globally. Countries like Malaysia, Indonesia, and the UAE have successfully leveraged Islamic Finance to attract billions in FDI. This influx of funds can stabilize the cedi and reduce pressure on foreign exchange reserves.
Curbing Inflation through Asset-Backed Financing: The asset-based nature of Islamic Finance ensures that money is tied to tangible economic activities, minimizing speculative bubbles. This can stabilize prices and contribute to long-term economic stability.
A Path to Economic Justice
Islamic Finance is not just a financial model but also a tool for economic justice. Its principles align with the values of fairness, equity, and shared prosperity. By prioritizing this initiative, your administration will send a clear signal to Ghanaians and the world that Ghana is committed to innovative, inclusive, and ethical economic reforms.
Conclusion
Your Excellency, the implementation of Islamic Finance within your first 100 days will mark a historic milestone for Ghana. It will not only bolster our battered economy but also position Ghana as a regional leader in ethical and innovative financial systems. I urge you to engage with international Islamic Finance institutions, local stakeholders, and policymakers to set the groundwork for this transformative initiative.
May your tenure be marked by visionary leadership, impactful reforms, and a brighter future for all Ghanaians.
Yours sincerely,
Yahaya Iliasu Mustapha
+233 246873726
Founder and manager- Islamic Finance TV Gh