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Wednesday, March 28, 2012


        Though, Islamic banking is not a new phenomenon as its introduction in other countries around the world date back to 1950s, its appearance in Nigeria has generated a lot of controversies and heated debates, most of them result of the kind of negative media coverage given to the program. Islamic banking as a system different from the conventional system did not call for annihilation of other systems or stoppage of followers of rival systems from following their own system, as some of these media coverage want the world to belief. Any one familiar with the Nigerian media since independence, would be aware of the fact that the industry is divided along ethnic and religious divide or more specifically between North and South. The Northern media which more less is non existent, if one excluded the New Nigerian, until the last one decade has been concerned with depending the North cultural conservatism, perceived political dominance as well as bashing coming from the other media against the North. The southern media on the other hand, apart from its traditional job of depending the South so-called superior way of life and alleged economic dominance, have other job of engaging in Northern bashing. 

    The introduction of Islamic banking with its links to Muslim North should not, therefore, be expected to escape this historical animosity. It is, therefore, understandable that Southern media is in fore front of forces trying to show weakness of the system to the Nigerian public, as against its global acceptability. For example, when a columnist in Punch, Vanguard, or Tribune tells you that Islamic banking is a plot to Islamize Nigeria, you should understand why he said that; because, due to the word ‘Islamic’ prefix to the system it is thus assumed by same people (whether ignorantly or otherwise) that the system will have no benefit to the Southern Christians. Looking at the realities on the ground one can say that this is not true. For example, some of the first beneficiaries of the activities of Islamic Development Bank (IDB) in Nigeria include Christian states from the south. Currently, Nigeria is enjoying an interest free facility from the Islamic Development Bank to the tune of $4 billion for financing of infrastructural development; most of them located in the southern part of the country. And, if Christian Universities established long ago could not convert the country to Christianity (looking at their relevance in propagating ideologies), I wonder how simple arrangement like that of Islamic banking can covert a country to a particular religion.

  With first Islamic bank in Nigeria (Ja'iz Bank) all ready in operation, with three branches and hoping to open thirteen more, Islamic banking system will witness growth in the coming years. Looking at its current level of acceptability and the number of people waiting for spread of its services to their corner of Nigeria Islamic banking is here to stay. Already, there are existing Islamic fund management companies, like Lotus Capital, as well as windows of conventional insurance firms that operate Islamic insurance performing in Nigeria. Central Bank of Nigeria, not very long a go, has promised to look into the feasibility of issuing Islamic bond- Sukuk. With rise in the number of international conferences, seminars, and trainings organized on Islamic finance with the aim of building Nigeria banking and finance manpower, its look like those oppose to the system in Nigeria have a daunting challenge ahead. Nigeria, a country with over $240 billion in annual Gross Domestic Product (GDP), has continued to attract the attention of the banking and finance stakeholders around the world. Looking at the on going reforms in the banking sector, Nigeria is on the road to becoming hub of Islamic banking and finance in Africa.