The path to Islamic banking revolution in Nigeria has been very rough right from the inception, unlike in other parts of the world where the program implementation got supports from different angles: the government, the academia, the professional cycle and the general public. In Nigeria the situation provides a difficult case study of it own; where some sections of the country see the move as a way of given preference to one religion over others. While the other side see it as their legitimate right given their own non adaptability to the main conventional banking system in use in the country. The same thing is true in the academia, while the southern intellectuals approach the new system with skepticism; those in the north see it as a positive move capable of bridging the economic gap between the two major sections of the country. The government and the central bank in particular did not help matters in this case; if not of recent some of the Central bank plethora of policies are the major stumbling block to the take off of Islamic banking in Nigeria. Surprisingly, the banking and finance professionals in Nigeria constitute an important segment of Nigerians ignorant of the system; their hatred for the system has so far driven them to oppose its successful implementation. Since the start of official mutterings about the introduction of Islamic banking, that began in the 80’s, the program has remained as it was: a government’s tool use when ever appropriate to achieve political goals. At different times the governments of Babangida, Abacha and Obasanjo had promised the actualization of this dream only to turn out as normal policy pronouncements. Since the promulgation of Bank and other financial institutions acts (BOFIA) in the early 90’s, and the attempt by the former HABIB Bank to open a kind of window to cater for the need of Islamic banking public, there was no any other major land mark. The recent efforts at setting up of JAIZ, significant as it was, has remained a mirage. The entire Soludo pronouncements about Islamic banking has ended up in producing one piece of policy book, the so called guide, while the nitty-gritty of laying a solid foundation for establishing Islamic Banking like the recruitment and training of the necessary manpower to take care of the basic jobs and the operationalization of the required Money and Capital markets infrastructures were neglected.
While in other countries the laws were reviewed to allowed for the establishment of Islamic banks by foreigners, only in recent time do the Nigerian monetary authorities start to look in that direction. Since wealthy Nigerians are reluctant to put their money in the sector, this should have been a perfect course for kick starting Islamic banking in Nigeria. But as mentioned before the policy and the existing infrastructures will not allowed it. Our so called banking professionals have failed to understand the enormous foreign investment potentials provided by Islamic banking which the economically advanced Western world have used to their own advantage for sometime now. Or we could have used the Malaysian model where existing conventional banks were encouraged by the Central Bank to start an independent Islamic bank, as a kind of subsidiary. The enormous amount of resources at the disposal of Islamic Development Bank (IDB) based in Jeddah, Saudi Arabia, to provide assistance to countries trying to establish their own Islamic banking system, was never put to a good used by our monetary authorities. Likewise the various opportunities for collaboration, with countries that have already made substantial progress in the area, were not used.
There were efforts, particularly coming from Usmanu Dan Fodio University Sokoto and Bayero University Kano, towards research and training of manpower in the area of Islamic Banking and finance during the 80’s and 90’s. Usmanu Dan Fodio University is the first university in Nigeria to introduce courses in Islamic Economic and finance. The initial enthusiasm of the university toward the development of the field was killed by the apparent lack of concerned for the field shown by the government. Through collaborations with other institutions around the world, Usmanu Dan Fodio University was able to organize and hosted international conferences that gathered some of the pioneers in the field of Islamic economic and finance from around the world. The like of the late Sule Ahmed Gusau and Professor Mohammed lawan Bashar of the university were the brains behind some earlier feasibility studies on the practicability of the system in the country. Currently, Bayero University Kano is in the process of establishing an Institute for Islamic Banking and Finance for the training of manpower in the area. Courses to be offered will include both undergraduate and postgraduate programs to be done in collaboration with some institutions from around the world.
Nigeria’s Central bank under Sanusi Lamido has made pledge to see to the actualization of the system in the country. But, despite the zeal with which current efforts are been persuaded, people remain skeptic of the process until when they started to see it bearing fruits. The categorization of the Nigerian banking system into groups will go along way in helping the course of Islamic banking in the country. But if Central bank is indeed serious and decided to move a bit faster than it does now, the skepticism on the part of the public will subside. In a country like Nigeria where more than half of the population is outside the formal banking system, for reasons that included economic and socio-religious, any set of programs that will help reduce the percentage of unbanked people should have been welcome and not treated the way Islamic banking have been treated over the years. Despite obstacles, Islamic finance has so far become important segment of global finance that cannot be simply ignored. We are watching things to see how Nigeria’s aspiration to become a regional hub for global finance in Sub Saharan Africa will be achieved without revisiting the role of Islamic finance in this.