Islamic finance and banking has made great progress across the world

Reverend Ladi Thompson of the Living Waters Unlimited Church in Anthony Village, Lagos, speaks with ANDREW IRO OKUNGBOWA on issues concerning Islamic finance and banking following the outcry over Sukuk Bond by the Christian Association of Nigeria

What is your reaction to the issues being raised from different quarters regarding the Sukuk Bond by the Federal Government?

My first reaction to the issues being tabled about Sukuk bond and the religious fears of some Nigerians is to keep mum and stay quiet for the simple reason that I have observed over and over again that Nigeria is not a nation that treasures reasoning above emotional issues and irrational alarms.

There is no civilisation that can do better than the quality of thoughts that are broadcast from the hearts of its people and the greatest pain in my heart comes from having to admit that the “architecture of thought” evident in the modern Nigerian experience is a demonstration of the decline we have suffered in every area of our national life over the past few decades. For some strange reason, however, I have the faith that God will raise a generation of Nigerians that will by some miracle reject the current trends to inject constructive thought into the national narrative.

It is this hope that propels me to contribute my penny’s worth to this needless debate on Islamic financing. Before we look at the issue of Islamic banking and the sukuk bonds in particular, there are four basic realities in the Nigerian mix that must be established.

The first reference point would come from the fact that Nigeria is a nation that was midwife on the colonial divide-and-rule policy in such a way that its constituent parts were designed to bicker and fight one another on all platforms from the tribal factor to religious differences.

The perennial suspicions that attend all aspects of our national life should therefore come as no surprise to anyone at all. On a second count we must accept that religion was particularly used as a divisive tool in the programming of Nigeria to create gulfs between the southern and northern ends of our nation.

The animosity, mutual suspicion and negative emotions generated across the north-south divide have always been exploited by the political class to divert the attention of our masses while power and our resources are abused. The third cadastral can only be established when we accept that religious difference has the reputation of being a double-edged sword across the world.

Religion could be used positively to build consensus and ignite progress but it could also be engaged as an incendiary on the other hand. Between Belfast and Dubai there is a lesson to be learned. Our fourth compass is set in the fact that animosities stirred by religious tensions are the deadliest of all. When an aggressive philosophy is backed by a theology its contentions defy logic and the aggression it stirs are rooted in the hearts of men.

But why then do we keep playing the religious card even in this matter that ought to be an economic decision?

The religious composition of Nigeria is a unique dynamic that positions it as a global testing ground for the long sought cure to politicized religious contentions. Nigerian should crack this problem. Its cure would be replicated across the world as a global standard. To crack this problem we must accept the rivalry between most religions as a given fact and device means to supervise these rivalries positively through wise governance.

What exactly are the historical implications of Islamic banking?

Pure research tells us that the concept of Islamic banking did not exist in the days of the prophet of Islam! The concept of Islamic finance was conceived much later by certain clerics and developed into what it has become today.

The term “Islamic banking” refers to a system of banking activity that is consistent with Islamic law (Shariah) principles and guided by Islamic economics. Islamic law prohibits usury, the collection and payment of interest, also commonly called riba in Islamic discourse.

In addition, Islamic law prohibits investing in businesses that are considered unlawful, or haram (such as businesses that sell alcohol or pork, or businesses that produce media such as gossip columns or pornography, which are contrary to Islamic values).

In the late 20th century, a number of Islamic banks were created to cater to this particular banking market. The first modern experiment with Islamic banking was undertaken in Egypt under cover without projecting its Islamic image – for fear of being seen as a manifestation of Islamic fundamentalism that was abomination to the political administration.

Do you think the country needs this at this time?

If we put religious sentiments aside, the clerics of Islam should be commended for this competitive move! More so when the basics on which Islamic finance is defined are firmly established in the Holy Bible under the watch of Prophet Moses. Historically the Holy Bible predates the Quran and the real question is why the Christian faith has not developed its own user-friendly banking institutes with its cyclical debt forgiveness advantage called the Jubilee.

On closer inspection we will see that the entire Islamic finance package is more of a PR victory in its rivalry with the Christian faith than anything else. I consider it a healthy rivalry as it does not involve bloodshed in any form. Imagine what would happen if the Christian religion present a financial package that would factor integrity and a periodic debt forgiveness program based on the Jubilee.

Islamic finance and banking has made great progress across the world but it is a moot point that it does not really practice interest free banking and most of their earnings come from interest-like fixed returns. The basic and foremost characteristic of Islamic financing is that, instead of a fixed rate of interest, it is based on profit and loss sharing.”

Why then is there outcry against it from the Christian quarters?

The contention is that Islamic financing is based on profit and loss sharing which is not supported by any quotation from Quran and the Sunnah. In a nutshell this violence free promotion of Islamic interests is something that should elicit a healthy response from rival religions instead of panic calls.

The greater fear of the Nigerian church leaders is probably sourced from the threat which the love of money (mammon) poses to their flock and the vulnerability that poverty induces. Either way the Nigerian solution cannot lie in the direction of mudslinging. Islamic finance has been presented as a package that is not limited to Muslim countries.

It has shown growth globally, including in Europe. Total Islamic finance assets worldwide according to some projections are poised to grow to $3.5 trillion by 2021 from $2 trillion currently. According to Thompson Reuters’ Islamic Finance Development “Resilient Growth” report published in 2016 and there are 622 institutions providing Islamic finance courses worldwide, and 201 provide Islamic finance degrees. Britain issued its first Islamic bond (sukuk) worth £200 million (over $250 million), according to a statement by the Treasury published on the government’s website in June 2014.

Other reasons why the Nigerian government and other religions might be worried could stem from the fact that Osama bin Ladin was one of the chief promoters of Islamic banking and this was a major focus during his stint in Sudan. Security reports in the 9/11 official commission report of 2004 suggests that a good number of Nigerians consulted with him in Sudan.

Are you therefore, in support of the government’s position on the issue?

To conclude the whole issue, we need to agree that a healthy rivalry among religions in Nigeria is not a problem! Whichever religion proffers an ethical and affordable source of funds to Nigerian citizens without drawing us into terrorism should be accepted and commended.

If Islamic funded schools were to be built offering a full curriculum for everyone at half the cost that the Christian funded schools are charging would there be an outcry? Instead of spreading rumours and increasing hatred across religious borders we must embrace the fear of God.

In my opinion the Christian leaders of Nigeria should look back at the record of its heroes’ past to seize the initiative. We can bridge the gap of mistrust and neutralize the colonial engineered hatreds on the religious front.

This would mean that our children would not have to continue the traditions of hate along religious lines. Years ago the politicized elements in church leadership cried wolf about this same Sukuk bond and Islamist terrorism in Osun State.

Serving as special adviser to the then Christian Association of Nigeria (CAN) president it was under my purview to verify the claims and proffer solutions. Despite my initial bias it became obvious that Ogbeni Rauf Aregbesola was no terrorist but a boisterous Yoruba Muslim with a sound conscience. Investigations showed up many flaws in our jaundiced positions while the governor had made it compulsory for students in Osun State to have access to three religious books namely the Quran, the Bible and believe it or not the Ifa deity chronicles (odu ifa)! Inviting experts from Northern Nigeria to assess the situation we all agreed that Southern Christians don’t really understand Islamist terrorism and its cruel execution.

Even the local Islamic agitators dubbed Tawun were nowhere close to the depraved behavior of the Boko Haram and were also subject to the Omoluabi code of behaviour that permeates the South West. In my candid opinion religious leaders need to stop heating up sentiments with positions that lack verity.

We must embrace truth and soundness of mind as the ideal in dealing with these issues. I later had the opportunity to confront Ogbeni Rauf Aregbesola on the Sukuk bond matter and I remember that he simply rolled out the figures to ask if we had any better source of funding at a low interest rate with no strings attached.

In returning my report to the CAN president of that era I mentioned that there were many other factors discovered that might suggest that our people were being economical with the truth. In a nutshell I believe the strategy adopted by Ogbeni Rauf in Osun State will pave the way for a future where the playing field will be levelled for all religions.

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