Human Capital Development Central To Islamic Finance - Olanrewaju Sharafa

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Friday, July 03, 2020 / 1:00 PM / Bukola Akinyele for WebTV / Header Image Credit: WebTV


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Human Capital Development is critical to the growth and deepening of Islamic Finance and Banking in Nigeria, Mr. Olanrewaju Sharafa, a Chartered Accountant, Principal Lecturer & Head of Division Adult Learning in Tower College, London, United Kingdom, disclosed this as a guest on the WebTV's Islamic Finance Weekly Program.

 

Speaking on the relevance of Islamic finance education and research in the modern age, Sharafa believed Nigeria was one of the countries with a growing interest in Islamic banking and finance. The successes of the Federal Government of Nigeria's (FGN's) various Sukuk issuances(2017, 2018 and 2020)  indicated the wide acceptability of the instruments.

 

According to him "If we intend to achieve further growth in the industry we need to pay attention to human capital development by ensuring that workforces who can drive all these industries together are well-equipped with the requisite knowledge, skills and competency that is required".


He was of the view that Nigeria had the opportunity to tap into the benefits of Islamic finance to achieve economic development and nation-building.


He made references to scholars such as Dr. Raim Lukman and a few others who put useful thoughts into a publication titled "Embedding Islamic Financial System (IFS) into the Nigeria curriculum" especially in the areas of finance and banking studies.


In the article, the authors went further to say "academic exposure within Islamic Finance is therefore imperative because it will enable a viable global economic model".


According to Sharafa, it was time to adopt viable global economic models which focus on operating an Islamic Finance System that is based on the concepts mentioned by a renowned expert Iqbal Khan,  during his visiting lectures at the London School of Economics titled, "The History and evolution of Islamic Finance".


Sharafa citing Iqbal said the scholar believed that to say Islamic Finance is a viable model to an economy,  there is a need to appreciate the concept of what Islamic finance is all about. Sharafa noted that Khan highlighted the fact that Islamic finance is about the following;

  1. Community Banking: Serving community, and not serving the market.
  2. Ethical Investment: About putting money into the real economy;
  3. Corporate Social Responsibility was consistent with the thinking of Dr. Paul Mills with an effort to put into context the role of ethics, CSR and prohibition of interest in Islamic finance.
  4. Another contribution from Khan was that Islamic Finance was about a word derived from the Holy Quran "Marifa" meaning the exchange of knowledge. For instance, some funds were initially created to extend the body of knowledge and research in Islamic Finance Education. For example The Institute of Islamic Finance Professionals Research Grant Fund Initiative.

 

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Such developments show contributions in terms of education and developing capacity in Islamic Finance. He concluded that if one wants to trace the relevance of Islamic finance, it would be its contribution to the community-based ethical investments and enhancing knowledge and human capacity development.

 

On where individuals can acquire deeper knowledge, the Islamic finance expert stressed the need for  Institutions and Professionals Bodies that Offer Islamic Finance Qualification to scale their activities. The lecturer said to create value within the industry, there is a need to pay attention to human capital development. He said universities and professional bodies will be a vital part of the ecosystem in developing Islamic finance studies.

 

He recommended that interested professionals who intend to deepen their knowledge of Islamic Finance should subscribe to the WebTV Islamic Finance Weekly program, especially for its rich content, relevant topics and the quality of guests.

 

He said the National Universities Commission (NUC) would have to work out modalities of how universities in Nigeria could embed Islamic Finance studies as an academic program due to a degree qualification and even post-graduate level.


"I am yet to see a road map and quality assurance arrangement put forward by the National Universities Commission (NUC) as it relates to the standardization and regulation of the Islamic Finance curriculum," Sharafa explained.

 

Speaking on  International Universities, Sharafa explains that there are several Universities internationally that have done work when it comes to developing qualifications leading to the award of degrees, master's and Ph.D. in Islamic finance and they are widely recognized globally. On professional education, Sharafa cited the Institute of Islamic Finance Professionals of Nigeria (IIFP) ) led by Professor Tajudeen Yusuf. He said IIFP is the only professional body in Nigeria that has three-level approvals from :

  • The Nigeria Ministry of Education
  • The Central Bank of Nigeria and the
  • The Office of the Attorney General of the Federation.

He said IIFP was incorporated and limited by guarantee to promote Islamic Finance Education in Nigeria. The Institute has several collaborations around the World which include: - Education Partnerships with the Institute of Islamic Banking and Insurance, (IIBI) in the UK - The Standard Setting body for Islamic Accounting and Auditing: Accounting and Auditing Organization for Islamic Financials.


The scholar said, IIFP in Nigeria has a collaboration with the London Centre for Training & Development (Executive Masters & Short courses on Islamic Finance).


In respect of international Professional bodies that offer Islamic Finance qualification, Olanrewaju pointed to The Chartered Institute of Management Accountants (CIMA) Islamic Finance Examination (Certificates & Diploma in Islamic Finance)- The Chartered Institute For Securities & Investment, Islamic Finance qualification - Long-established short courses and diploma programs designed by the Institute of Islamic Banking and Insurance (IIBI) to manage distance learning on Islamic Finance and the Institute of Financial Accountant in the UK. (IFA) has several resource experts who deliver relevant training in the area of Islamic Finance.


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On the role of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in providing guidelines around Islamic accounting and auditing within the CIMA syllabus, He thought that a comparison of Islamic Finance training in Nigeria and International Certified bodies qualification exposed a major gap.

 

Speaking on academic theories he said that it was ideal for a researcher to either develop theories around Islamic finance or test a new theory around Islamic Finance.


He was of the view that it is always ideal to ensure that the fundamental principles of Islamic finance were embedded in a theoretical framework that forms a bedrock for the studies. He said whether it involves developing or testing a theory on Islamic Finance it would serve as a policy contribution to stakeholders, government, and the outcomes will also be useful for further research.  He was of the view that individuals and scholars should be encouraged to embark on research around Islamic finance either by testing a theory or developing a new theory.


"The willingness of individual contribution to research is there, but the major challenges in Nigeria is  funding and a supportive environment"


He called on stakeholder action and engagement around how the industry players, government, regulators and professionals could support research and education initiatives within Islamic finance, preferably by collaboration.


He also made a strong case for the two pioneer accounting professional bodies in Nigeria ICAN and ANAN to expand their collaboration with local and international professional institutions to employ continuous professional development (CPD) and embed some aspects of Islamic Finance into their curriculum. Sharafa felt that this would enhance accounting education and build capacity in the area of Islamic finance.


He made the following additional recommendations;

  • Individuals should be encouraged to embark on research initiatives
  • Regulatory bodies should support research initiatives
  • Indigenous professional accounting bodies like ANAN  and ICAN should embark on creating relevant topics in Islamic finance or develop a CPD programme in Islamic Finance.


He said, there is a need for institutions and industries to support educational arrangements including professional bodies to help them build capacity and provide continuous professional development for their staff. Also, the NUC should provide guidelines for universities on how to design and embed quality assurance metrics for subjects in their degree and post-graduate programmes.


Speaking on the challenges, including funding that might prevent professionals from enrolling for international courses and CPD, he said international courses are expensive.


He identified funding as a big issue and the threat of  COVID-19 pandemic and its travel restriction implications as a major stumbling block to the growth of cross border professional education. He was of the view that online learning is now becoming a viable option and an alternative of choice.


He was of the final view that businesses that were based on the ideology and principles of Islamic finance were becoming increasingly successful.


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