By Adnan Adams Mohammed
(Certified Islamic Finance Professional and An Award-winning Finance Journalist)
I am compelled to respond to a ‘purported’ academic article written by Dr Atuahene Akwasi Atuahene titled “Potential challenges, Issues that could hamper the establishment and operationalization of Islamic Banking System-: ‘A ahasase of Ghana’- Policy recommendations” and published in Accra-based newspaper on October 16, 2025.
While it is trite knowledge that allegations leveled against Islamic banking are largely false , It is shocking at the article’s deliberate distortions and misinformation regarding the introduction of Non-Interest Banking and Finance in Ghana.
Readers are aware that the Bank of Ghana’s team, led by Professor John John Gartchie Gatsi, has embarked on extensive stakeholder consultation towards drafting a framework for Non-Interest Banking and Finance (NIBF), which is a commendable effort towards financial inclusion and diversification.
The initial process of stakeholders and religious bodies consultation as well as the jurisdictional tour were all efforts towards learning from the challenges and successes and the best practices globally of the non-interest banking and finance systems. Likewise, the Bank of Ghana acknowledging the earlier implementation challenges Nigerians and Kenyans faced.
Addressing Potential Challenges and Issues
Although, the article highlights potential challenges and issues that could hamper the establishment and operationalization of the Non-Interest Banking and Finance system in Ghana which include:
– Constitutional and legal challenges
– Religious and cultural differences
– Shari’ah-related issues
– Double taxation
– Inadequate human resources
– Disparity in accounting standards
In my engagement with the Central Bank of Ghana as a certified Islamic finance professional and an award winning financial journalist, the Bank has not been oblivious of such issues in its processes. However, it has further harnessed welcoming concrete engagement outcomes which address the issues indicated in the article. It is as though the writer was rehashing very early challenges faced by the industry in Nigeria and Kenya. The industry in Nigeria in particular has moved on with so many innovations and development of liquidity management tools. Even conventional banking, liquidity management strategies have been evolving from time to time. Same will be the situation with Ghana.
It is clear that those constitutional and legal matters raised do not arise. The Bank recognised that, the Constitution of Ghana, rather, promotes religious inclusivity and diversity for national development, as such, non-interest banking and finance is a tool to promote financial inclusivity for cohesive national development.
Further to address the challenges highlighted in Dr Atuahene’s article; the Bank of Ghana is:
– Developing an inclusive and comprehensive guideline that accommodates suggestions from all stakeholders of the Ghanaian economy, including major religious groups in Ghana to guide the introduction of the Non-Interest Banking and Finance system in Ghana.
– Providing education and training for stakeholders, including bankers, regulators, and the public. This has been the focus of the bank till date.
– Niching a unique governance structure approach in the Ghanaian context to allow inclusivity and diversity in the management of the Non-Interest Banking and Finance system that ensure compliance with best practices. The engagement which l attended has done just that.
– Encouraging financial innovation and product development
– Fostering collaboration between conventional and Non-interest banks. This is particularly interesting as the bank discussed about conventional window and fully fledged thus no discrimination.
– Investing in human resource development and expertise in Non-Interest Banking and Finance .
– Utilizing financial technology (FinTech) to enhance efficiency and accessibility.
– Designing marketing strategies that leverage trust, social influence, knowledge, and government support.
In view of these efforts, there is the need for all stakeholders to support the Bank’s efforts towards the introduction of Non-Interest Banking and Finance in Ghana and work towards creating a conducive environment for its success. The Bank in our engagements
Together, we can harness the benefits of non-interest banking and promote economic growth and financial inclusion in Ghana.
The Academics Clash
Contrary to Dr Atuahene’s neo-Islamophobia position against the NIBF, A lecturer at the University of Ghana Business School and National Banking College, Norman Adu Bamfo, in an article titled “Islamic banking and non-interest finance: Strategic implications for treasury management and banking sector” and published on September 29, 2025, hailed the current government’s will to operationalise Non-Interest Banking And Finance despite it being captured in the current Banking Act.
He notes “the introduction of Islamic banking under Ghana’s Non-Interest Banking (NIB) framework marks a transformative milestone for the country’s financial system. It is not merely about providing faith-based products, but about embedding an alternative model of finance that emphasizes fairness, transparency, and risk-sharing.
“For treasury managers, this development reshapes liquidity structures, balance sheet dynamics, and hedging strategies. For the wider banking sector, it promises heightened competition, innovation, and access to new sources of international capital.”
Implications for treasury and liquidity management
The Finance expert explains that “For treasury management, the introduction of Islamic banking changes the very structure of balance sheet management. Conventional interest-bearing deposits are replaced by profit-sharing investment accounts such as mudarabah, compelling treasurers to rethink liability modelling and prepare for variability in returns rather than fixed obligations.
“Liquidity management also becomes more complex, given the scarcity of Non-Interest compliant government securities. Without an active sukuk market, Non- interest banks face difficulties in meeting regulatory liquidity coverage requirements, although the development of a sovereign sukuk program could transform this challenge into an opportunity by providing high-quality liquid assets and establishing a Sharia-compliant yield curve.
“Risk management practices equally require adaptation. Conventional derivatives often conflict with Sharia principles, limiting the use of widely deployed interest rate swaps or forward contracts.”
Further noting that, “Treasurers will instead need to rely on Sharia-compliant alternatives such as wa’ad-based FX contracts and commodity murabaha structures to hedge currency and market risks. Moreover, the Bank of Ghana will need to provide Sharia-compliant liquidity windows to ensure that Islamic banks are not disadvantaged in times of stress, thereby guaranteeing a level playing field across the financial sector.”
Sector-wide dynamics
Mr Bamfo notes that, “The effects of Islamic banking are not confined to treasury operations. At the systemic level, non-interest finance could accelerate financial inclusion by offering alternatives to segments of the population and SMEs that are reluctant to engage with conventional banks due to interest-based products.
“For the banking industry, the entry of Islamic banking will inevitably drive competition, with conventional banks likely to launch Islamic windows or ethical finance products of their own. This competition, if well managed, could spur innovation and improve product diversity.
“The strategic implications extend beyond Ghana’s borders. With a credible Islamic finance framework, the country could attract investment flows from the Middle East and Southeast Asia, leveraging sukuk issuance and Sharia-compliant funds to finance infrastructure at lower costs. Regulatory credibility is therefore essential.”
Strategic outlook
Emphasising on the prospects and outlook, Mr Bamfo explained that non-interest finance represents more than a niche innovation; they are strategic levers for Ghana’s financial transformation. “For treasurers, this shift requires new tools, models, and mindsets. For the broader sector, it promises deeper financial inclusion, more diversified capital inflows, and heightened competition.
“If complemented by regulatory innovation, sovereign sukuk issuance, and capacity building, Islamic banking under the NIB framework has the potential to become a cornerstone of Ghana’s financial future. Properly nurtured, it can anchor systemic stability, broaden participation in the financial system, and position Ghana as a regional hub for ethical and inclusive finance in West Africa.”
Contextualisation
Meanwhile, Dr Atuahene in his article could not accurately contextualise the concept and practice and the global integration of NIBF in the financial ecosystem.
It is therefore imperative to look at the brief history and acknowledge that, Non-Interest Banking and Finance has come a long way, and its integration into the global financial ecosystem presents opportunities for growth, financial inclusion, and stability.
Brief History
Non-Interest Banking and Finance, also known as Islamic banking, has its roots in the early Islamic period. The concept of Islamic finance dates back to the 7th century, when Islamic principles prohibited the collection and payment of interest (riba).
The modern era of Islamic banking began in the 1960s, with the establishment of the Mit Ghamr Savings Bank in Egypt (1963) and the Islamic Development Bank (IDB) in Jeddah, Saudi Arabia (1975).
Global Expansion:
Today, Islamic banking is a rapidly growing industry, with over 1,800 Islamic financial institutions operating in more than 80 countries worldwide. The global Islamic finance industry has grown significantly, with assets expected to reach $3.8 trillion by 2025.
Integration in Global Financial Ecosystem:
Non-Interest Banking and Finance has become an integral part of the global financial ecosystem, offering:
1. Alternative funding sources: Islamic finance provides an alternative to conventional banking, catering to the needs of Muslims and non-Muslims alike.
2. Diversification: Islamic finance instruments, such as sukuk (Islamic bonds), provide diversification opportunities for investors.
3. Financial inclusion: Islamic finance promotes financial inclusion by offering Shariah-compliant products that cater to the needs of underserved communities.
4. Stability: Islamic finance’s emphasis on risk-sharing and asset-backed financing can contribute to financial stability.
Key Players:
1. Central banks: Regulate and supervise Islamic financial institutions.
2. Islamic financial institutions: Offer Shariah-compliant products and services.
3. International organizations: Organizations like the Islamic Development Bank (IDB) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) promote Islamic finance development.
Commendation
I commend the Bank of Ghana for its extensive stakeholder consultation and efforts towards drafting a framework for Non-Interest Banking and Finance. This demonstrates the Bank’s commitment to financial inclusion and diversification. Non- interest banking is part of the global financial system as such the Bank of Ghana is right to expand the opportunities in the economy through non-interest banking and finance.
