TheNigerianVoice Online Radio Center

NIGERIA IS NOT A HUB FOR ISLAMIC BANKING

Listen to article

Recently I read a statement credited to the Central Bank Governor in one of the Nigerian Dailies , that he hopes to make Nigeria a “Hub for Islamic Banking” I became disturbed and surprised that in a pluralist Nation like Nigeria the Central Bank Governor would drive such policy as one of his directions for the year 2011.

I have great respect for the Central Bank Governor for one thing and that is his “Bold and Daring” nature which was manifest in the way he stood by his report, figures and analysis that the National Assembly accounted for 25% of the revenue expenditure of our Nation, without fear of intimidation and cajoling.

As a Risk Manager I agree that corruption in the Banking sector had to be properly tackled in order to curb the excesses of Bank CEO'S, but the reforms that led to the sacking of over 2,000 bankers from the seized 5 major banks in the country was a rigorous and hectic experience for an emerging capitalist driven economy.

Comparatively CBN Governor Sanusi's performance in terms of managing the Nigerian Banking sector a key part of the economy has been rigid but very effective, and I believe this gave him an edge over the likes of Ben Bernanke (US Federal Reserve Chairman)and Mr Meryl King (Bank of England Governor), as he clinched the Best Global Central Bank Governor Award for2010.

It is also interesting to note that Governor Sanusi is firm and resolute in his approach to the management of the Nigerian Economy, he recently rejected the IMF proposal to devalue the Naira and also frowned at the Federal Government policy somersault on the Lifting of the ban on importation of toothpicks and furniture equipments etc.

These are qualities that depict strategic economic leaders which I see in Mallam Lamido Sanusi and I am impressed with his passion for the Banking sector. Now on the issue of Islamic Banking I want to say that there is nothing wrong with having Islamic Banks, but there is everything wrong when a CBN Governor puts it as one of his policy thrust for the Nigerian Banking Sector.

Nigeria has two major religions namely Christianity and Islam, and economic/policy analysts know that when it comes to religion, leaders must be careful with their assertions so as not be viewed as biased or having affinity for their religion and driving a policy that promotes the dominance of a particular religion.

Across the Globe the Job description for the Central Bank Governor is to ensure the stability of the banking sector, fiscal discipline, monetary balance, monitor the Forex and Internationa trade, manage the reserve, and pursue reforms that will grow and sustain the economy. However the question of driving a religious banking philosophy is dependent on the Predominant religion in the country, especially if the religion has 80% of the population.

Nigeria like I said is not a Islamic Nation, but a Country populated majorly with Christians and Muslims, so I believe the issue of the CBN Governor driving the philosophy of Islamic banking in Nigeria is not tenable, as Islam is not the predominant religion in Nigeria.

Rather if Islamic businessmen come together to form an Islamic based bank there is no problem with that, Just as there will be no problem having Christian businessmen coming together to propose for a Christian-Based Bank .I believe that the emphasis should be on reforms that develop the economy which include increasing industrialization, innovation, rural development, and empowering the Small Medium Enterprises.

The assertion that “Islamic Banking” charges little or no interest in lending to customers, is not a bad concept, but should not form the basis for a CBN adoption, instead the Central Bank can review its interest if possible from 22% to a considerate rate , which will encourage prospective businessmen and entrepreneurs to approach banks for credit facility.

Normally CBN Governors are meant to serve as umpires or referees for the banks in every Nation, ensuring that there is a level-playing field for all banks to thrive and compete favorably without victimization and intimidation, and creating that unity in diversity, irrespective of religion and tribe.

I agree that the pathway to attaining economic excellence in the Banking Industry is Morality and Integrity which are the tenets of the Koran, but the Bible also preaches and teaches on righteousness and justice, and to implement a Banking policy solely from the teachings of one faith in a Country that has two major religions will be lopsided.

It is on this basis that I will like to advice the Central Bank Governor to review his plan and drive for the Islamic Banking Policy, by dropping the proposal and adopting a comprehensive Banking Policy that is geared towards making impact in the lives of Nigerians.

Let the Banks strategize and come out with their philosophies, all that CBN has as its assignment and mission statement is to ensure proper regulations and stabilization of the Banks, ensuring efficiency , accountability, transparency, and probity in the vital sectors of the economy.

Like I stressed earlier Nigeria is in dire need of transformation in all sectors, and the best strategy and policy direction of the CBN Governor now will be to pursue a developmental banking policy that is broad-based and not limited to the ideals of a particular faith or religion, in a Nation densely populated like Nigeria.

With the approval and License given to the first Islamic Bank 'JAIZ International', it will be pertinent for the CBN Governor to review his strategies and adopt a level playing field for all Banks to operate, and avoid any form of religious affinity to a very sensitive sector.

I believe we need to surge on as a Nation united in our diversity, and the best way to achieve this is ensuring that policies that promotes and upholds the interests of Nigerians irrespective of their religion, tribe, ideological disposition, business alliances, etc are pursued aggressively.

It may be obtainable in Saudi Arabia, Oman, Bahrain, Jordan, Syria, Iran, Afghanistan, United Arab Emirates, Pakistan, and Indonesia were Islam is the predominant religion, but not in Nigeria , an Islamic Bank can be established in the country, but it must not be driven as a policy for the Nigeria's Banking sector by the Central Bank Governor .

Ottoabasi Abasiekong is a Public Affairs Analyst
Email; [email protected]

Disclaimer: "The views/contents expressed in this article are the sole responsibility of Ottoabasi Abasiekong and do not necessarily reflect those of The Nigerian Voice. The Nigerian Voice will not be responsible or liable for any inaccurate or incorrect statements contained in this article."

Articles by Ottoabasi Abasiekong