The Bank of Ghana (BoG) is accelerating efforts to diversify the nation’s financial landscape with the advancement of Islamic Banking, appointing renowned economist and academic, Professor John Gartchie Gatsi, to lead the initiative. Governor Dr. Johnson Asiama announced the appointment during the central bank’s 124th Monetary Policy Committee (MPC) briefing, signalling a strategic pivot toward more inclusive and faith-based financial models.
Professor Gatsi, who also serves as Dean of the Business School at the University of Cape Coast, will head a team of experts tasked with developing a viable framework for Islamic finance a system guided by Shariah principles that eschews interest and promotes risk-sharing.
“Professor Gatsi is purposely here to help drive this introduction. Let me say that we have internal capacity, we have some people who know what it takes and what to do. However, we need a few steps. The head of banking supervision has gone through a lot of programmes, he is very comfortable with them,” said Dr. Asiama.
Regulatory Enhancements Underway
Though Ghana’s existing legal framework the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) permits the operation of Islamic banks, certain core elements needed for full implementation remain absent. These include provisions for establishing Shariah supervisory boards, a key compliance requirement under Islamic finance.
“The current banking law, which is Act 930, which we passed in 2016, provides for it. However, there were some lapses. For example, the establishment of the Sharia supervisory boards and the like. Those were not captured in Act 930, so Professor Gatsi and his team will be doing some work in that regard to ensure that we are able to operationalise Islamic financing, especially Islamic banking,” Dr. Asiama noted.
This move is part of a broader vision to create a more diversified financial ecosystem that appeals to various investor profiles, particularly in regions and communities seeking ethical and Shariah-compliant financial services.
“Remember, it goes just beyond Islamic Banking; there are other aspects of financing involved. So we are working on it. Hopefully, very soon, when we are ready, we can consider licenses to establish an Islamic Bank,” he added.
The policy update also comes amid encouraging signs in Ghana’s foreign exchange market. The cedi has posted a notable recovery against major international currencies, prompting consumer expectations for price reductions.
“You can understand that some people stock their goods at a higher exchange rate, and so naturally, even with the appreciation, it takes a while for you to see that adjustment. However, rest assured that you will see the adjustment certainly so long as there is competition, so long as it is not a monopoly, and we will see that kind of phenomenon very soon,” Dr. Asiama stated.
The Governor emphasized that the recent appreciation is not artificially sustained by central bank interventions but reflects broader market dynamics and sound monetary policy.
“But the appreciation is largely driven by the markets, it is not something that the central bank is using its reserves for. If you look at the data pack we have put out, you can see that our reserve programme is growing, so we are not using our reserves to intervene in the market, therefore, the appreciation you are seeing is driven by economic policy stance of the monetary policy, by international flows,” he clarified.
“The Cedi appreciation has to be put into proper context. Much as you want to have Cedi stability in nominal terms, the important thing here is to ensure that in real terms, the Cedi is not appreciating persistently. And so the MPC went into a lot of deliberations, looked at the real movement of the exchange rate, and we think that where we are now, we don’t have that problem of real appreciation that would adversely impact our competitiveness.” He added.
With Prof. Gatsi at the helm of BoG’s Islamic banking initiative, Ghana is positioning itself as a forward-thinking player in inclusive finance across West Africa. The introduction of Shariah-compliant banking promises to unlock new investment flows and cater to underserved market segments heralding a potentially transformative phase in Ghana’s financial sector evolution.
