USA Africa Dialogue Series - Islamic Banks in Nigeria--Separating the Myths from the Facts

Dr. Ola who should we blame for the ignorance of the people-both educated and non-educated Nigerians? The problem started from the CBN and do you blame Nigerians for wanting the CBN to clarify its stance in this matter? Nigeria is a diverse nation of very well educated people despite the fact that we also have a large population of illiterates. Thus, Nigerians have the moral right to preserve their interests in this matter.

We are not totally rejecting non-interest banking but saying that the CBN guidelines should encompass other religions and culture that also practice non-interest banking in its proposal to broaden the scope of non-interest banking in Nigeria.

In my opinion, this problem should be very easy to rectify and it should not be causing any problem amongst the populace.

Thank you. --Noyo Edem

Sister Noyo:

I couldn't agree with you more!

The CBN fumbled the issue right from the starting gate.

I believe that the revised guidelines were put in place to
 rectify the initial errors.

Bye,

Ola

-----Original Message-----
From: Noyo Edem <babytonia62@yahoo.com>
To: lawoffice@rogers.com; nyedik2000@yahoo.com; NIDOCANADA@yahoogroups.com; nigerianid@yahoogroups.com; omoodua@yahoogroups.com; NaijaPolitics@yahoogroups.com; NIgerianWorldForum@yahoogroups.com; USAAfricaDialogue@googlegroups.com
Sent: Sun, Jul 31, 2011 11:46 am
Subject: [NaijaPolitics] Re: [NIgerianWorldForum] Islamic Banks in Nigeria--Seprating the Myths from the Facts

 

Dr. Ola who should we blame for the ignorance of the people-both educated and non-educated Nigerians? The problem started from the CBN and do you blame Nigerians for wanting the CBN to clarify its stance in this matter? Nigerian is a diverse nation of very education people despite the fact that we also have a large population of illiterates. Thus, Nigerians have the moral right to preserve their interests in this matter. We are not totally rejecting non-interest banking but saying that the CBN guidelines should encompass other religions and culture that also practice non-interest banking in its proposal to broaden the scope of non-interest banking in Nigeria. In my opinion, this problem should be very easy to rectify and it should not be causing any problem amongst the populace. Thank you. --- On Sun, 7/31/11, OlaKassimMD@aol.com <OlaKassimMD@aol.com> wrote: From: OlaKassimMD@aol.com <OlaKassimMD@aol.com> Subject: [NIgerianWorldForum] Islamic Banks in Nigeria--Seprating the Myths from the Facts To: lawoffice@rogers.com, nyedik2000@yahoo.com, NIDOCANADA@yahoogroups.com, nigerianid@yahoogroups.com, omoodua@yahoogroups.com, NaijaPolitics@yahoogroups.com, NIgerianWorldForum@yahoogroups.com, USAAfricaDialogue@googlegroups.com Date: Sunday, July 31, 2011, 11:19 AM   Dear Brothers Dike and Oyenubi et al: I am delighted that Attorney Oyenubi has weighed in on this matter by providing some legal opinion gratis on this important issue of Islamic Banking in Nigeria. I believe what we are dealing with here is a matter of perception. Whether a perception is true or false does not usually matter considering it is almost always considered as close to 99.99% of the truth.  Unfortunately, an antagonistic stand against Islamic Banking, which started as a knee jerk reaction  by some Christian leaders in Nigeria led by Rev. Ayo Orietjiafor (President CAN) has now percolated  into the mainstream where it continues to feed on ignorance rather than knowledge  and on emotions rather than rational thought. The matter was unfortunately further muddled by a poor description of Islamic Banking as the only form of 'Interest free' banking that is allowable in Nigeria as was presented in the initial draft of Guidelines for Islamic Banking. If Islamic Banking had been called simply "Interest Free Banking" or by any other name other than Islamic I doubt if there would have been so much 'noise' and confusion of the matter. If let's say it had been presented as Ahmadiyya, Ansarudeen or Arab banking it would probably not have provoked as much angst amongst some Nigerian Christians. A lot of falsehoods and misinformation continue to be spread on this matter even by otherwise well educated Nigerians who are normally well informed and are enlightened on other matters. These same people find the combination of Islamic Banking and Sharia Law too scary to fathom. But are they? Facts: **Sharia Law has always been a component of Nigeria's judicial system; it was in place before amalgamation in 1914 and transcended into the Nigerian constitution at independence and was retained in the 1999 Constitution. The maintenance of Sharia Law was guaranteed to the Sultans and Emirs of northern Nigeria just as other forms of Common Law were guaranteed to the traditional rulers of the colonized regions of southern Nigeria (the Southern Protectorate). Thus Sharia and other forms of Common Law have always existed side by side with the basic Nigerian jurisprudence which was derived from Westminster. Laws of Great Britain. The only difference between then and now is that the traditional rulers and political leaders of northern Nigeria originally limited Sharia Law to civil matters even though they  had reserved the rights to also introduce Sharia into criminal matters whenever they wanted to do so. **Islamic Banking is only one form of Interest Free Banking. There is nothing under current Nigerian laws that forbids Christian organizations and representatives of our native religions e..g. Sango, Ayelalala, Oro, Ogboni, Okija etc, from applying to set up their own forms of interest free banking in the country. Once the Governor of the CBN receives such applications he would be expected as part of his fiduciary duties to ensure that the proposed entities are legal and that they are acceptable under the rules governing banking in Nigeria. Once deemed acceptable the governor of the CBN would then set up guidelines and procedures for setting up such banks. **The process of introducing Islamic Banking started during the tenure of Prof. Soludo and long before Mallam Sanusi took over as governor of CBN. It was Prof. Soludo who approved the setting up of Islamic Banking and it was under his tenure that the initial draft of the guidelines was prepared. **Prof Soludo still supports the concept of Islamic Banking; Dr Mrs Okonjo Iweala our current Minister of Finance also supports Islamic Banking, just as her predecessor Mr Aganga. The aforementioned individuals are Christians with vast knowledge in the financial field than most of us. **The idea that Mr Sanusi is using state funds to promote Islamic Banking is false. Mr Sanusi is not promoting Islamic Banking. He is presenting Islamic Banking, its underlying principles and the proposed guidelines he is about to put in place for such entities to Nigerian political leaders and through them to all Nigerians.He is doing the job we ordinary Nigerians are paying him to do. **Some have suggested that since Islamic Banking was legal under Nigerian laws  that Mr Sanusi should just simply approve them and allow them to start doing business in Nigeria, considering that he does not need legislative approval to do so. I disagree. I believe that Mr Sanusi has acted wisely as he would have been in hot water if he had discreetly sanctioned Islamic Banks without first increasing public awareness about such financial institutions. Prof Soludo, former governor of the CBN was chastised for attempting to re denominate the Naira by the Yar'adua government even though the Banking Act gave him the power to do without resorting to the Presidency or the Legislative Assemblies/  **No Nigerian citizen would be forced to patronize the Islamic Banks against their will.  **Islamic Banking is just an alternative form of banking that is guided by different rules and principles in the same manner that rules governing traditional banks are different from those governing Credit Unions. We must learn as Nigerians to live and let live. It is unlikely that a financial institution which operates as an Islamic Bank would open a branch in a jurisdiction where it is unlikely to attract customers, business and deposits.Thus the fear that islamic Banks could be used as a ruse to Islamize Nigeria is unfounded. Nigeria can not be Islamized any more than she can be Christianized. The secular status of Nigeria was never compromised by over a century of Christian Missionary Schools  which were later followed the establishment of schools by denominations of the Islamic religion. Bye, Ola -----Original Message----- From: A.O. Oyenubi <lawoffice@rogers.com> To: nyerere dike <nyedik2000@yahoo.com>; NIDOCANADA@yahoogroups.com Sent: Sun, Jul 31, 2011 9:05 am Subject: Re: Re: NIDOCanada | Islamic banks in Canada?   NOISE! NOISE!! NOISE!!! The Constitution of the Federal Republic of Nigeria makes provision for Sharia law(try changing that if you can) and the Sharia Council/Expert/Board is supposedly made up of persons versed in Islamic law, finance the Quran (try getting the Christian et al committed knowledgeable in this area too before making so much noise). Common law is still applicable in Nigeria, just like in Canada UK. You can always avail yourself of the common law system if its your preference. A contract is still a contract, anywhere on the face of the earth. Sharia Banking is not being forced down anybody's throat. There is no compulsion here, my friend!. If the Constitution allows it, why can't the CBN spend state money to promote it?...for crying out loud!!! A.O. Oyenubi Sent from my BlackBerry device on the Rogers Wireless Network From: nyerere dike <nyedik2000@yahoo.com> Sender: NIDOCANADA@yahoogroups.com Date: Sat, 30 Jul 2011 09:52:19 -0700 (PDT) To: <nidocanada@yahoogroups.com> Subject: Fw: Re: NIDOCanada | Islamic banks in Canada?   This is a very serious moment for us as a nation. It's a time, I think everyone must think seriously before doing anything or saying anything. Let me begin by saying that what happened in the House of Representatives was a shock. I think to most well-meaning Nigerians, it was a shock because an issue that has generated so much controversies was not well handled. I appeal to social activists and well-meaning Nigerians not to be quiet. They may think this is an issue they are not too interested in, but tomorrow, another issue is still going to come that they will be interested in. If this issue can be treated like this in the House of Representatives, then, they should be prepared for greater things that are going to happen in the House of Representatives. I am highly disappointed. Let me again make it abundantly clear, we are not against the Muslims, they are Nigerians. There are some Nigerians who are Muslims, some are Christians, we are Nigerians and we have known each other for years and we will always be here. I'm a bit puzzled when I listen to what is coming out from different angles. We are not basically against Muslims wanting a bank that would meet their needs. You can have a bank that will meet your needs. What we are saying is this, does the law of this country permit the CBN Governor to spend state money promoting a sectional banking system? We are not against the non-interest banking; after all, it started from the Bible. It is the Bible that every other person has imitated or got it from. You see, it's like someone or some persons are trying to blindfold Nigerians, but what we are against is the sectional non-interest banking. The CBN is the CBN of Nigeria and not CBN of Northern Nigeria or of Islamic Nigeria. It's a CBN of the Federal Republic of Nigeria that comprises everybody. Now, how do you take state funds running into billions to be promoting one kind of non-interest banking? That is a question that must be answered. It is absolutely wrong. Number two, why must you have one set of guideline for Islamic banking and then probably you will now have another set of guidelines for other non-interest banking? That is wrong and discriminatory. For example, I have used this example severally, the education sector, we have uniformed guidelines for any person who wants to start school. Today, in this country, there are universities that lean towards Islam and Christianity, nobody is quarreling with that, but do we have separate guidelines for them? No. The ministry of education has one set of guidelines that covers the entire school system. Do you mean there is a separate guideline for Islamic banking? it is wrong. You are discriminating and then, you now say within CBN, you will have what is called Sharia Council of Experts, but now, after a lot of pressure, we hear that he changed it to Council of Experts. Those are just words, now this council of experts, will it include Christians? That is the question. Who are these experts? They are Islamic experts. What we expect from the CBN is one set of guidelines. The CBN is saying non-interest banking is good for Nigeria, so, these are the guidelines. The argument from the CBN is that the United Kingdom also practices Islamic banking, does the exchequers office in Britain have a Sharia Council of Experts? Please go and find out. Now, Islamic banking in UK is a very small part of what goes on in banking industry in the UK, you and I know that. So why make a big deal out of this? I have said it again and again, Saudi Arabia is the headquarters of Muslims; we all know them for what they are and what they stand for, we are not against them, but even in Saudi Arabia, the most important industry there is the oil industry, but do they even run the oil industry by this Sharia banking? Go and find out. How are they running it? Is it not with the regular banking? Why are they not telling Nigerians all other kinds of non-interest banking? Or is it that our CBN Governor doesn't know there are other non-interest banking? He should ask. Why promote Islamic banking and not other non-interest banking? For instance, you don't expect me to stop selling pork because I want to do business with an Islamic bank because if I go there, the operation is based on Sharia law and the Sharia law says you can't touch pork and automatically, I'm disqualified. So, if I want to do anything with the bank, I either convert to Islam or close down my business. There are implications to these things and we should look deeply into them --- On Thu, 7/28/11, OlaKassimMD@aol.com <OlaKassimMD@aol.com> wrote: From: OlaKassimMD@aol.com <OlaKassimMD@aol.com> Subject: NIDOCanada | Islamic banks in Canada? To: nigerianid@yahoogroups.com, NIgerianWorldForum@yahoogroups.com, omoodua@yahoogroups.com, edo_global@yahoo.com, USAAfricaDialogue@googlegroups.com, NIDOCANADA@yahoogroups.com Received: Thursday, July 28, 2011, 9:09 AM   World   Islamic banks in Canada? http://www.arabamericannews.com/news/index.php?mod=article&cat=World&article=180 Friday, 09.28.2007, 03:52am The Canadian Office of the Superintendent of Financial Institutions is considering two proposals to open sharia-compliant banks. Such institutions would neither give nor charge interest and would not engage in speculative transactions. As well, they would not be involved in transactions having to do with pork products, alcohol, pornography or gambling. The Office of the Superintended is aware of another four interested parties as well. Regulators studying the proposals have raised concerns about several issues. For example, can directors of such a bank really direct, or are they controlled by external religious scholars? Problems have also been identified around ability to audit and monitor such banks and about possible liquidity problems. Rather than giving a loan, for example, the bank becomes part owner of an undertaking, taking a profit when their interest in the undertaking is sold back. Hence, possible liquidity problems might arise. In spite of the problems posed by these proposed ventures, there is considerable interest on the part of banking officials, as Islamic financial institutions may have the potential to provide an increased participation in the financial sector, though the extent of the demand in Canada is not clear. Great Britain is trying to take the lead in becoming the world center for Islamic finance.

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