Dean of the University of Cape Coast Business School, Prof. John Gatsi, has advocated for the integration of Islamic Banking into Ghana’s financial landscape.
He emphasized that Islamic Banking should be considered as a complementary instrument to conventional banking systems, rather than a substitute.
Professor Gatsi believes that Islamic Banking has the potential to revolutionize public debt management in Ghana, citing examples of countries such as Saudi Arabia, UAE, and Algeria, where debt-to-GDP ratios remain notably lower.
Delivering his inaugural lecture on the topic “Islamic Banking Options: Exploring An Inclusive Alternative or Complement,” on Thursday, February 29, Prof. Gatsi underscored the possibility of Islamic Banking to alleviate Ghana’s debt burden while fostering fiscal sustainability.
“Islamic Banking aids practising countries with their public debt management leading to reductions in their public debts as the debt-to-GDP ratios of such countries average 40%. Countries such as Saudi Arabia, UAE, and Algeria that practice Islamic Banking have debt-to-GDP ratios of 23.8%, 24.2% and 32% respectively,” he remarked.
In an era marked by economic volatility, Prof. Gatsi urged Ghana to reassess its debt management strategies, advocating for the inclusion of alternative financing mechanisms like Sukuk (Islamic Bonds) citing the nation’s over-reliance on the international capital markets (Eurobonds).
“Islamic Banking is recognized by the UN, IMF, and World Bank with the institutions engaging in Islamic Banking in some form to help reduce poverty, and so we have no say but to also do it,” he stated.
Prof. Gatsi’s call resonates as a clarion for Ghana to embrace Islamic Banking as a catalyst for financial diversity and inclusive prosperity.
As the nation navigates the complexities of its economic landscape, the integration of Islamic finance stands poised to redefine its financial architecture and propel it toward sustainable development.