Exploring the Possible Impact of Introducing Islamic Banking and Finance (IBF) in Ghana: Opportunities and Challenges

Ghana is one of Africa’s largest untapped Islamic finance markets. Despite the passing of a bill to allow Islamic Banking and Finance (IBF) activities in the country, there has still not been full-fledged Islamic banking operation. Several reasons, ranging from the lack of regulations to the lack of knowledge about the whole Islamic finance system, are offered as the likely stumbling blocks to introducing the IBF system in the country. Previous studies on this subject have been carried out from an ex-ante perspective. This thesis, however, explores the possible impact of introducing the IBF system in Ghana from an ex-post perspective. A multi-dimensional study approach that involves correlation, regression, context, and SWOT analyses is used to respectively examine the knowledge of IBF among Ghanaians; examine IBF appeal to Ghanaians; determine the potential of introducing IBF in Ghana; review the legal framework for IBF in Ghana; and review the Shari’ah regulatory framework, if any, for IBF in Ghana. A sample size of 199 respondents, made up of businessmen and businesswomen of various religious affiliations engaged in the informal sector of the economy, is used to collect the data necessary for the investigations. It is found that Ghanaians do have some knowledge of IBF, and IBF will appeal to them if introduced. However, the potential of introducing the IBF system in Ghana can hardly exclusively be determined by the knowledge among and appeal of the IBF system to Ghanaians. While there has been a genuine commitment to providing the regulatory ambiance for IBF in Ghana, there is the need to intensify the efforts since Ghana has more to gain than to lose from the development of IBF.