Professor Gatsi calls for Ghana’s financial diversification through Islamic Banking
As the nation navigates the complexities of its economic landscape, the integration of Islamic finance stands poised to redefine its financial architecture and propel it toward sustainable development.
Delivering his inaugural address on the topic “Islamic Banking Options: Exploring An Inclusive Alternative or Complement” as a Professor at the University of Cape Coast, Professor John Gartchie Gatsi, Dean of the School of Business, made a compelling case for Ghana’s integration of Islamic Banking into its financial landscape.
In his address, Prof. Gatsi emphasized that Islamic Banking should not be perceived as a substitute but rather a complementary instrument to conventional banking systems.
Central to his argument was the potential of Islamic Banking to revolutionize public debt management. Drawing parallels with nations such as Saudi Arabia, UAE, and Algeria, where debt-to-GDP ratios remain notably lower, Prof. Gatsi underscored the possibility of Islamic Banking to alleviate Ghana’s debt burden while fostering fiscal sustainability.
“Islamic Banking aids practicing countries with their public debt management leading to reductions in their public debts as the debt-to-GDP ratios of such countries average 40%. Countries such as Saudi Arabia, UAE, and Algeria that practice Islamic Banking have debt-to-GDP ratios of 23.8%, 24.2% and 32% respectively,” he remarked.
In an era marked by economic volatility, Prof. Gatsi urged Ghana to reassess its debt management strategies, advocating for the inclusion of alternative financing mechanisms like Sukuk (Islamic Bonds) citing the nation’s over-reliance on the international capital markets (Eurobonds).
Acknowledging the international recognition of Islamic Banking by institutions such as the IMF and World Bank, Prof. Gatsi emphasized the need for Ghana to engage in Islamic finance. He highlighted the potential of Islamic Banking to combat poverty and foster inclusive economic growth, echoing global efforts toward socioeconomic advancement.
“Islamic Banking is recognized by the UN, IMF, and World Bank with the institutions engaging in Islamic Banking in some form to help reduce poverty, and so we have no say but to also do it,” he quipped.
Prof. Gatsi’s call resonates as a clarion for Ghana to embrace Islamic Banking as a catalyst for financial diversity and inclusive prosperity.
As the nation navigates the complexities of its economic landscape, the integration of Islamic finance stands poised to redefine its financial architecture and propel it toward sustainable development.
Source:norvanreports
