The Ghanaian Minaret

Accra – A Professor of Finance at the University of Cape Coast, Prof. John Gatsi, says the Bank of Ghana’s (BoG) misunderstanding of the concept of Islamic banking and finance has been the major setback for introducing the banking system into the country.

He observed the unreadiness and lack of political will to introduce the system due to the lack of appreciation of the complementarity the Islamic banking system gives to the banking and finance sectors.

“I do not think that it is because we are calling it Islamic banking in the country. We are giving a number of holidays to the Islamic religion. We have had laws that recognise Islamic religion.

“We have a tax exemption act that recognises some items Imams import into the country. So, there is no problem with the recognition of Islamic religion,” he said during an interview at a FinForum public lecture series held on the theme, “Ghana’s Pain points”.

Prof. Gatsi urged the country to consider the advantages associated with embracing the concept that will help the country diversify its source of funding for its development.

“When we register as members of the Islamic Development Bank, we are now open to assessing the advantages of the Islamic Development Bank. In addition to the advantages we get from the African Development Bank, World Bank, IMF, etc.,” he said.

Also, he said, the Islamic banking concept has an arrangement that gives meaning to the public-private partnership (PPP) arrangement through loan agreements.

“And when that happens, you will see a lot of Islamic bond issues. And the nature of Islamic bonds is such that when Islamic bonds are issued, there is a clause of oath-taking where those who are issuing the Islamic bond will take an oath to those who bring their money to indicate that the purpose of which I raise this bond, I will use the money for that purpose. And they will ensure that they do that and deliver the project,” he said.