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Prof. Abdulrazzaq Alaro of the Department of Islamic Law, University of Ilorin (Unilorin), has advised the Federal Government to utilise Islamic finance by taking advantage of the global Sukuk market.
Alaro gave the advice on Thursday in his paper presentation at the 196th Inaugural Lecture of the Unilorin, entitled: ” Islamic financial services: the interplay of religion, law and corporate social responsibility”.
He described Islamic finance as justice through profit, loss and risk sharing, prohibition of gambling, excessive uncertainty and interest (riba).
According to him, Sukuk is a sharia-compliant bond-like instruments used in Islamic finance.
He observed that since the rise of Islamic finance, Sukuk have become extremely popular since 2000, when the first such products were issued in Malaysia.
“Sukuk are used by Islamic corporations and state-run organisations alike around the globe, taking up an increasing share of the global fixed-income market.
“Sukuk as a prominent product of Islamic finance has been issued by government and corporate bodies in China, Japan, United Kingdom, Hong-Kong, South Africa and Luxembourg,” he said.
The don, who teaches in the Faculty of Law, noted that Islamic finance has no bearing with Islamisation agenda, adding that it is currently offered in about 80 countries, most of which are non-muslim countries.
“Islamic finance does not reflect the adoption of Islam as a religion, and this explains why Britain remains the Christian-majority state, with having its first Islamic financial entity, Islamic Banking of Britain incorporated in 2004,” he said.
Alaro pointed out that the major feature of Islamic finance is the prohibition of interest (riba), adding that riba is any increase in return, of which no equivalent counter value is paid, provided that such an increase has been overtly or covertly stated as a condition.
He stated that financial inclusion is important to any economy, as the opposite poses substantial threat to the economic growth and development, in addition to its engendering social imbalance and inequality.
The expert on Islamic Law reiterated that access to Islamic finance will play a key role in achieving the economic objective of reductions the high level of financial exclusion in Nigeria, as research has shown that majority of “unbanked population” are Muslims.
He explained that these population deliberately avoid conventional banks on religious grounds.
The don believed that one important and viable alternative that can positively change the narrative of African infrastructural inefficiency is the Sukuk, which is an instrument of the Islamic Capital Market.
Alaro also observed that former President Goodluck Johnathan conceived the idea of using Sukuk to develop infrastructure in Nigeria, while commending the present administration of Muhammadu Buhari for issuing the first sovereign Sukuk worth N100 billion.
“With the unprecedented success rate of Sukuk for the road and school construction in the country, governments at all levels, as well as corporate organisations should take advantage of the innovative instrument to develop other key sectors of our economy,” he advised. (NAN)
– Apr. 22, 2021 @ 15:19 GMT
Tags: Islamic finance: Don urges FG to take lead in global Sukuk market
