Economist and academic Professor John Gatsi officially began his new role this week, taking the reins as head of a high-level technical team tasked with crafting Ghana’s long-awaited framework for Islamic finance.
Professor Gatsi’s appointment, announced by Bank of Ghana Governor Dr. Johnson Asiama during the 124th Monetary Policy Committee (MPC) briefing, also signals a significant shift from academia to national financial reform as he resigns as Dean of the University of Cape Coast Business School to focus entirely on this national mandate.
“This initiative gives Ghana a unique opportunity to venture into a new area of Islamic banking. 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 Shariah 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 stated.
What is Islamic Banking?
Islamic banking is a financial system rooted in Shariah law, which prohibits the charging or payment of interest (riba) and discourages speculative transactions (gharar). Instead, it fosters equity participation, profit-and-loss sharing, and ethical investment, encouraging socially responsible finance. Lending takes a different form, where institutions purchase assets and lease or sell them to clients under a transparent, fixed-payment agreement
Why Now, and Why Ghana?
With the global Islamic finance market valued at $8.94 billion and projected to grow to $13.89 billion by 2029, Ghana’s entry into this space is considered both timely and strategic. The Middle East and Africa currently dominate the market, but the Asia-Pacific region is expected to see the highest growth.
Potential Advantages for Ghana
Ghana’s foray into Islamic banking could open new frontiers;
Increased Financial Inclusion. The system could attract segments of the population, especially in Muslim communities, that remain underserved by conventional banks due to religious beliefs.
Diversification of Financial Products. Islamic banking introduces innovative instruments such as Sukuk (Islamic bonds), Murabaha (cost-plus financing), and Musharakah (joint ventures), which could attract both ethical investors and international Islamic finance institutions.
Resilience through Risk-Sharing. By design, Islamic banks share risk with clients, which can strengthen the financial sector’s overall resilience.
Global Appeal. Ghana could tap into the $8.94 billion global Islamic finance market, expected to grow to $13.89 billion by 2029, driven by increasing demand for Shariah-compliant services
Professor Gatsi’s leadership is expected to be pivotal in shaping the vision and infrastructure needed to introduce Islamic finance in a sustainable, inclusive, and impactful manner. As work commences today, all eyes are on how this team of experts under Gatsi’s stewardship will lay the groundwork for Ghana’s entry into a global financial system that offers both spiritual alignment and economic opportunity.
