By UDEME CLEMENT
West African Institute for Financial and Economic Management (WAIFEM) says Nigeria stands to benefit from over $1.4trillion worth of assets being controlled by Islamic banks all over the world if the nation adopts the banking model.
The director general of WAIFEM, Prof. Akpan Ekpo, disclosed this in a chat with Sunday Business, at the opening ceremony of a regional course on econometric modelling and forecasting for policy analysis, organised by WAIFEM to enable policy makers in the country acquaint themselves with new forecasting techniques needed to develop the financial sector and the economy at large.
He explained that there are between 400 and 500 Islamic banks in the world controlling assets worth over $1.4trillion and that by the year 2020, these banks would have assets worth over $4.4trillion. “What is wrong with Nigeria being part of it to benefit from these incentives?
There are Islamic banks in Asia, Europe, America , Kenya , Sierra Leone and other countries. When fully implemented, Nigeria would also be part of the global Islamic system.
Also, the point is that Islamic banking technique is another product in the sector for people to choose from. People are free to make their choice on what they want. Nobody is forcing people to bank with the non-interest financial institutions”, he said.
“The N10billion capital requirement for a start is in order. It means CBN must have done its homework very well before arriving at N10billion for non-interest banks. There are many economic benefits of operating non-interest banking. For instance, most areas in the north are un-banked.
So, with this new initiative, the people in that region would now have access to banks, just like in the south where most areas are still un-banked.”
Reacting to question on religious sentiment concerning the name, he explained, “The guidelines in the Banking and Other Financial Institutions (BOFIA) Act duly passed into law by the National Assembly are very clear.
The provisions of the BOFIA Act 1991, as amended, Sections 9, 23 and 52, provided for the establishment of Islamic banking in the country. The Act shows that Islamic banks can not discriminate against non-Muslims.
Also, the BOFIA Act says that the regulator can not attach any religious sentiments or affiliation to the name. This is part of trying to allay fears on the non-Muslim Nigerians, because it is very sensitive.
My only hope is that other players in the financial sector should also come up with their ideas of having non-interest financial institutions to grow the economy in line with global trend”.
On the on-going reforms by the apex bank, he said, “CBN is carrying out the reforms because of the weak state of the banks. Banking is a conservation industry because it handles cash.
So, the regulator works ahead of those in operations. I was a member of CBN’s board and I believe so far, the current governor of CBN is doing his best”.