By Issah Mohammed
Accra, March 13, GNA – Professor John Gatsi of the University of Cape Coast (UCC) has urged the government to form a technical committee to facilitate the integration of Islamic finance into Ghana’s financial system.
He recommended that the committee, headed by the Ministry of Finance, include representatives from the Securities Exchange Commission, Bank of Ghana, Ghana Stock Exchange, Ghana Revenue Authority, and the National Insurance Commission.
Speaking at an Islamic finance forum organized by the Islamic Finance Research Institute of Ghana (IFRIG) on Wednesday, Prof. Gatsi, Dean of the Business School at UCC, suggested that the committee could also include advocacy groups, the World Bank, the Islamic Development Bank, and Islamic finance experts.
He made the call following recommendations for Islamic banking at the recent National Economic Dialogue and the government’s pledge to consider it as an alternative to the conventional financial system.
The forum, themed “Islamic Finance: unlocking infrastructure development through Sukuk,” also discussed Sukuk, an Islamic financial certificate that represents ownership in an asset or project rather than a debt obligation.
There are different types of sukuk structures, each based on different Islamic financial contracts, such as Ijarah (leasing), Mudaraba (profit-sharing), and Musharaka (partnership).
Prof. Gatsi noted that the adoption of Islamic finance, through Sukuk, could help the government finance infrastructure projects without adding to its debt stock.
“It is going to diversify our debt market and provide a new market. It is structured in a such way that Sukuk is raised by a special purpose vehicle, and it is that SPV that will be executing the project and that will not be added to the debt of the country,” he explained.
Dr. Shaibu Ali, Director-General of IFRIG, emphasised the importance of adopting alternative financial systems to complement the existing ones.
He pointed out that countries with small Muslim populations, such as the UK, South Africa, and Luxembourg, had benefitted from Islamic finance, noting that it was not about propagating religion.
Dr. Ali explained that Sukuk could help the government meet key infrastructure needs despite the current economic challenges.
Madam Adishetu Hamidu Naabo, an economist and fellow at IFRIG, added that Islamic finance offered opportunities for women entrepreneurs through financing agreements not based on collateral requirements or high-interest rates.
GNA