Friday June 26, 2020 / 1:00PM
/ Bukola Akinyele For WebTV / Header Image Credit: WebTV
The Islamic economic theory by its principles has the potential to achieve sustainable development and wealth for Nigeria and African nations.
This was the assertion of Mr. Baba Yunus Mohammed, the President of the Africa Islamic Economic Foundation, AFRIEF who featured on the Islamic Finance Weekly programme anchored by Bukola Akinyele.
According to him there are three ways AFRIEF can support economies in the continent which include; linking the real economy with physical transactions, prohibition against harmful products and activities as well as the promotion of economic and social justice.
Speaking further, Mr. Mohammed believed a large portion of Islamic law is dedicated to how the economies of Muslim societies should operate. According to him, the root of Islamic finance is the prohibition of interest bearing activities that if applied will enhance the economic wellbeing of the individual and the society at large.
On the concept of the Islamic Economy, he described it as a system of economic activities such as production, qualities and standards, consumption and financial which can be regulated in line with Islamic law also known as Shariah.
Giving further insight on the activities of the organization, he stated that the Africa Islamic Economic Foundation (AFRIEF) is registered in Ghana as an non-profit organization and deliverers on services ranging from providing advisory, research, policy development, and faith based approaches that can unlock the potentials of the Islamic economy and drive inclusive growth in the region".
He acknowledged the fact that Islamic Finance is growing as a capital formation source for entrepreneurs and investors, who have taste for ethical investing and sustainable wealth development.
Mr. Mohammed further identified the "Musharakah" as a viable instrument in non-interest finance Islamic Finance, which has a potential to contribute significantly to project financing.
He stressed further that Musharaka is an equity based mechanism in Islamic finance contracts, that involves profit and loss sharing.
Other instruments and endowments he identified as enablers for economic development include;
Speaking on the COVID-19 pandemic which has seriously affected the global financial system, he believes it is an opportunity for the Islamic finance industry to prove its worth by establishing its value and legal principles.
"Traditional and shariah scholars should lay more emphasis on promoting innovation, that will lead to the emergence of more products that can deepen the non-interest finance market", He said. He also called for legislations across the region and regulations that promotes the development of the Islamic Economy, which can support Africa's quest for addressing poverty, creating jobs, increasing investment in infrastructure and supporting a sustainable environment.