The Bank of Ghana (BoG) is inching closer to its quest to introduce Islamic Banking in the country’s financial landscape; however, a critical question is arising: are Ghanaian judges ready to adjudicate Islamic Banking disputes?
There is also the question of whether the legal profession has the expertise to handle disputes rooted in Shariah-compliant finance.
These are some of the concerns raised by policy analyst and Vice President of IMANI Africa, Bright Simons.
His concerns emanate from the recent release by the Bank of Ghana, stating the guidelines for the introduction of Islamic Banking, a campaign promise by President John Dramani Mahama before the 2024 General Elections.
In his position on the subject, Bright Simons argues that beyond branding Islamic banking as “non-interest banking,” the deeper legal and institutional challenges are yet to be fully addressed.
He explains that at the heart of Islamic banking is a strict ethical rule. Banks are expected to earn profits from real economic activity, such as trade and assets, rather than interest or speculative deals. While this may sound similar to standard banking discipline, the details are far more complex. Financial products like Murabahah require careful interpretation under Islamic law, often by trained Shariah scholars.
He admits that the Bank of Ghana’s draft guidelines make this clear. Licensed institutions must accept ethical restrictions rooted in Islamic values. In practice, this means disputes will not only involve financial contracts but also religious principles that define what is permissible.
“Islamic ethics are thus a big part of the model’s appeal. No point being coy about that. One such ethic is the idea that banks must make money from investing in REAL economic activity and assets instead of speculation. One might argue that this is merely a kind of prudential norm. The challenge is that how one determines a real asset (e.g “Murabahah”) is rather specific. Experts in Islamic law are required,” Bright Simons remarked.
The policy analyst further observes that to soften public discomfort, the regulators have avoided direct references to “Shariah” in naming governance bodies, instead using neutral acronyms.
But he points out that when disputes arise, labels will matter less than substance. Someone will still have to interpret and apply Shariah principles.
This, he says, raises serious questions about dispute resolution. If a disagreement between a bank and a customer reaches the courts, are Ghanaian judges trained to interpret Shariah-compliant financial contracts?
That is not all. Even in arbitration, where regulators prefer disputes to be settled, how many qualified arbitrators understand both Ghanaian commercial law and Islamic finance rules?
“Though the attempt is made to use acronyms such as NIBAC and NIFAC for the governance panels without dwelling on the ‘Shariah’ term, the truth is that in any dispute, adjudicators would need to interpret and apply Shariah,” he insisted.
He continued, “Supposing matters end up in court (despite the preference for alternative dispute resolution in the guidelines), how many Judges are being trained in Shariah-compliant finance? What about even arbitrators? Islamic experts are needed in the banks that get licensed to get involved, too.”
Without this expertise, there is a risk of confusion, delays, and inconsistent judgments. That uncertainty could discourage investors and undermine public trust in the system.
Bright Simons notes that Islamic banking cannot function properly without Islamic finance experts embedded within licensed banks and across the broader financial ecosystem.
Encouragingly, he admits that some Ghanaian professionals are already pursuing certifications in this area, but the scale remains limited.
As the country moves closer to diversifying its financial landscape with Islamic Banking, the critical question is whether complementary institutions are complementing institutions ready and well-versed for such a major shift.
