THE Federal Government has been urged to embrace the Islamic system of finance with a view to exploiting its many advantages for the well-being of the citizens and the nation.
Delivering the 196th inaugural lecture of the University of Ilorin titled ‘Islamic Financial Services: The Interplay of Religion, Law and Corporate Social Responsibility’, a professor in the Department of Islamic Law, Faculty of Law, Abdulrazzaq Alaro, said that in addition to the enabling law that is already in place, the practice of Islamic Finance (IF) in Nigeria needed a complete set of facilitating laws to replace most of the subsidiary legislations and guidelines that are currently the backbone of IF practice in Nigeria.
“This is the international best practice and our legislators can take any of the available precedents as a template for action with a view to creating robust legal and regulatory frameworks for the industry.
“If a country like the United Kingdom could announce, through its former Prime Minister, that it was working towards making the UK the western hub of Islamic finance, I see no reason why Nigeria with its large Muslim population should aim at anything less than making the country the hub of Islamic finance in Africa.
“With the unprecedented success rate of sukuk for road and school construction in the country, governments at all levels, as well as corporate organisations should take advantage of this innovative instrument to develop other key sectors of our economy.
“In countries lie like the UAE (Dubai), Malaysia and Saudi Arabia, sukuk are frequently used to develop airports, seaports, power generation and distribution plants, petrochemical companies, mining industries and skyscraper buildings,” he said.
He also said that Islamic finance has the capability to contribute to Nigeria’s economy through its synergy to increase infrastructure development such as job creation, economic empowerment of the citizenry, and Small and Medium-scale Enterprises (SMEs).
Professor Alaro said Islamic Finance is a representation of a unique market where money, law and religion are paramount in banking, insurance and capital market, adding that the financial system promotes zero tolerance for interest (riba), as it is against the Shariah law.
“Islamic Finance has proved to be the most convincing evidence of the viability of economic laws of a religion and their relevance to emerging challenges of the contemporary world,” he said
The don said necessary amendments should be made to Nigeria laws with a view to giving judges in the Shariah Court bench jurisdiction to hear and decide cases relating to Islamic finance, adding that “they are indisputably more competent in this regard than the conventional court judges who presently have the jurisdiction.”
He therefore called on Islamic banking operators in Nigeria to be alive to their responsibility of creating necessary awareness for members of the public on the rudiments of Islamic banking to avoid unnecessary misgivings and misconception about their operations.
He said “this will also go a long way in expanding the customer base of these institutions, as more people become acquainted with the unique benefits and advantages.”
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