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Sukkuk is unconstitutional — CAN

By Clifford Ndujihe
LAGOS — THE Christian Association of Nigeria, CAN, has kicked against the Federal Government’s floating of the Sukkuk Bond, saying it violates Section 10 of the 1999 Constitution.

President Buhari while receiving the Executive Committee Members of the Christian Association of Nigeria (CAN)- 19 Northern States and Abuja at the State House on 2nd November, 2016.

According to the apex body of Christians in the country, Nigeria is a secular state, and by floating the Sukkuk bond, the Federal Government is introducing Islamic financing into a secular state in violation of Section 10 of the Constitution.

In a statement by its General Secretary, Dr. Musa Asake, CAN said it is crying out because the ‘’Government is expected to be neutral on issues involving religion. By promoting a sectional religious financial policy, the government is violating both the spirit and letters of Section 10 of the Constitution.’’

The statement read in part: ‘’The recent floating of Sukkuk Bond by the Federal Government is not only sectional but illegal and a violation of the Constitution. Every law that has been promulgated to back the Sukkuk issuance and promote an Islamic banking system in Nigeria is ultra vires, illegal, null and void.

Islamic finance is financing which conforms to the doctrines of the Islamic law known as “Shari’a”. The sources of Shari’a (in hierarchical order) are as follows:

(1). The Qur’an; (2). Sunna (the teachings and practices of The Prophet Muhammad); and (3). Ijtihad and Fiqh (Islamic jurisprudence).

‘’Our objections to the Sukkuk Bond and all forms of Islamic financing are as follows: Funds raised under Sukkuk MUST be used for Shariah compliant (halal) activities. Nigeria is not a Sharia compliant nation, it is a democratic country. Nigeria cannot operate two national Ideologies.

‘’The Sukkuk shall be governed by, and construed in accordance with the laws of the Federal Republic of Nigeria as well as the Islamic Law of Mu’amalatmaliyyah. We insist that there cannot be two laws for one nation.

‘’Sukkuk is asset-based banking system unlike the conventional banking that is asset-backed. While under the conventional banking system, the borrower provides collateral to back the loan and retrieves his asset after the loan is redeemed, under Sukkuk, the loan is based on an asset which is land and irredeemable. The Sukkuk holder (lender) accepts land as asset on which the loan is based. At no time does the title pass to the customer, nor is it expected to pass. If the customer wishes to retrieve his asset at a later date, a separate agreement has to be drawn up.

‘’The operation of Sukkuk is based on Islamic value system and Sharia Jurisprudence. This makes Sukkuk unconstitutional. The IMF says that the issuance of Sukkuk by non-Islamic states/countries is a breach of the religious neutrality of the government of such state.”

 


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