The Dean of the School of Business of the University of Cape Coast, Professor John Gatsi, says Ghana must fastrack the process to introduce Islamic Banking in the country.
He He explained the introduction of Islamic Banking in Ghana would help the country finance infrastructure by issuing "Islamic bonds" which were conducive to the development needs.
According to him Islamic Banking, would also reduce the burden on interest on the government and cooperate entities.
Speaking at his inaugural lecture organised by the UCC on the topic "Islamic Banking Options: Exploring an inclusive alternative or Complement," Prof Gatsi said Ghana stood the chance of assessing development finance from Islamic development bank to finance development infrastructure in the country.
The Dean of School of Business of UCC, said Bank of Ghana (BoG) Central should spearhead the process and engage all stakeholders and put structures in place in place for the introduction of Islamic Banking in Ghana.
"The Central Bank must review existing laws and build capacity for effective regulatory oversight. Institutions affiliated to Islamic religion may play advocacy role and engage with the Central Bank and create the legal opportunities for the Islamic Banking to be established," Prof Gatsi stated.
He said the quest to establish Islamic Banking in Ghana started from 2004 but the banking laws in Ghana had not been not been reviewed to accommodate Islamic Banking.
Prof Gatsi called for review banking laws such as Act 930, Act 929 which dealt with capital market activities to accommodate Islamic capital market, and also a revision of Act 1061 to accommodate "Takaful" (Islamic Insurance).
Prof Gatsi said the World Bank, International Monetary Fund, United Nations supported Islamic Banking and believe that Islamic Banking and when operationalised well could contribute to achieving sustainable development goals, help fight poverty and finance infrastructure through the issuance of Sukuk (Islamic Bond) without the burden of interest as experienced under conventional financial system.
He said the numerous abandoned projects that were found under the convertible bonds, under which the accountability and transparency was low, would not happen.
"The "Ijara Market" (Infrastructure Leased Market) will also deepen the housing or the property market and create a well-structured "Sakat fund" from the profits of Islamic Banking and Islamic financial institutions to finance poverty reduction activities and developing infrastructure in Zongo Communities," he stressed.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
He observed that since 2013, Nigeria had undertaken a number of road and housing projects through the "sukuk market," and issued a number of Islamic bond to diversify sources of infrastructure finance especially in roads and housing sectors.
He further explained that, under Islamic Banking when "Sukuk" was being used to finance infrastructure, and there was an assurance of using the bond to completely finance the project as designed for which the funds had been raised and the projects delivered publicly at the end of the period.
On the approaches of introducing Islamic Banking in Ghana, he explained that generally, the introduction of Islamic Banking in the country was part of Islamic development which should be spearheaded by the Insurance.
Prof Gatsi identified three modes of allowing Islamic banking in Ghana, pure Islamic banking, Islamic banking and hybrid modes.
"I believe in addition Ghana will benefit from development finance from the Islamic development bank to complement other traditional development finances sources," Prof Gatsi, who explored the meaning and relevance of Islamic Banking, the history of Islamic Banking globally and in Africa, the principles on which Islamic Banking operate and the infrastructure benefits of Islamic Banking, stated.
