From Desmond

Mgboh, Kano

The Emir of Kano, Alhaji Muhammad Sanusi, has emphasized the need for Islamic finance, saying its principles of risk sharing, prudence , ethic, if supported by good regulatory system, would contribute towards the development of sustainable development goals.

He made the remarks in his keynote address at the 3rd International Conference of the International Institute of Islamic Banking and Finance held at the Bayero University, Kano.

According to him, the global Islamic financial services industry has made significant growth all over the world, adding that within a period of four decades, it had grown from a niche to a mainstream financial intermediation system.

He said that it had recorded leaps in size, in geographical spread and in the number of institutions offering ethical service across the world.

The monarch, who was the former governor of the Central Bank of Nigeria(CBN), stressed that the Industry had reached an overall total value of USD 1.88 trillion as of 2015 according to the 2016 IFSB Islamic Finance Services Industry Stability Report.

He recalled that Africa was a recent entrant into the Islamic finance market place, with Nigeria as one of its pioneering nations, adding that the introduction of the industry in Nigeria had resulted in a fast growth in all sectors of the economy.

“Despite the fact that the legislation providing the establishment of profit and loss sharing banks was enacted as early as 1991, it took almost two decades for us to witness the licensing of the first Islamic bank in Nigeria,” he recalled.

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According to him, today, there are three Islamic banks in Nigeria, one full fledged Islamic bank and two windows.

He said that the development of Islamic Finance in Nigeria was not limited to the banking sector but also extended to both the insurance and capital market sectors.

The Emir explained that the sectors had embraced Islamic Finance with regulations, licensing of market institutions and issuance of guidelines for introducing Islamic finance products into the markets already in place.

In his view,  one of the significant accomplishments of Islamic finance in Nigeria is the development of the joint committee on alternative finance to develop a blueprint for issuing sovereign, sub-sovereign and corporate Sukuk for infrastructure development in Nigeria.

He, however, regretted that the Islamic finance system in many African jurisdictions, had been wrongly perceived by Non Muslims as an Islamization or da’awah project, instead of perceiving it as an alternative financial product.

Among other challenges, he stressed that there was lack of awareness of Islamic banking propositions among many, while raising concerns over the extent of knowledge of modern business and finance among Sharia scholars and the knowledge of Sharia among finance practitioners.

He counseled that there was an urgent need for Islamic finance to catch up with conventional finance in the area of technology, if it was to compete in the modern world of finance driven by technological advances in innovative service delivery.

In his welcome remarks, the Governor of the Central Bank, represented by his Special Adviser on Islamic finance, Dr Yakubu Umar said that the theme of this year’s conference, “Islamic banking  and Finance: Financial Inclusion and Sustainable Development’ was timely and apt.