The Ghanaian Minaret

Accra: A professor of finance at the University of Cape Coast, Prof. John Gatsi, is urging government to show commitment to adopting Islamic financing by establishing a technical committee to facilitate the process.

He advised that the committee, which should be headed by the Ministry of Finance, must be made up of financial sector players such as the Securities Exchange Commission, Bank of Ghana, Ghana Stock Exchange, Ghana Revenue Authority, and the National Insurance Commission.

The committee must also include advocacy groups, the World Bank, the Islamic Development Bank, and Islamic finance experts.

The Dean of the Business School, UCC, made the call at an Islamic finance forum organised by the Islamic Finance Research Institute of Ghana (IFRIG) on the theme, “Islamic Finance: unlocking infrastructure development through Sukuk.”

Prof. Gatsi said Ghana has an opportunity to open a window through Sukuk to finance and address its infrastructure deficit without necessarily adding to its debt stock.

Sukuk, also known as an Islamic bond, is an Islamic financial certificate, similar to a bond, that complies with Islamic law, representing ownership in an underlying asset or project, rather than a debt obligation.

Unlike conventional bonds, which represent debt, sukuk represent ownership in an asset or project, and investors receive returns based on the performance of that asset, not a fixed interest rate.

There are different types of sukuk structures, each based on different Islamic financial contracts, such as Ijarah (leasing), Mudaraba (profit-sharing), and Musharaka (partnership).

Dr. Shaibu Ali, Director General of IFRIG, said it was important for the country not to be left behind in the adoption of alternative financial systems to complement the existing one.

He observed that countries with very few Muslim populations, like the United Kingdom (UK), South Africa, and Luxembourg, have benefitted from the Islamic finance system; hence, the system is not about propagating religion.

Present at the forum were representatives of Muslim groups, financial sector regulators, and financial institutions.