By Al-Khidr Abdul Baqi, IOL Correspondent
ABUJA, June 6, 2005 (IslamOnline.net) – Banking circles in Africa's most populous country, Nigeria, are awaiting the launch of the West-African state's first Islamic bank, amid heated parliamentary debate over the issue.
The first Islamic bank, "Jaiz" (Permissible), was to be operative in late 2004, but financial difficulties delayed it. It is expected to open in the coming few months to offer banking services compatible with Islamic Shari`ah.
"The go-ahead for the bank reconstruction was made in 2001 in cooperation between the Nigerian Supreme Council of Islamic Affairs (NSCIA) and Nigerian businessmen," Abdullateef Adegbite, a bank board member, has told IslamOnline.net.
Adegbite, who is also the NSCIA Secretary General, said the Central Bank of Nigeria (CBN) already gave approval to the construction of the Islamic bank six months ago.
He attributed the delay of the bank opening to the bank's financial difficulties in raising its capital to N25 billion, in line with the banking reform minimum capital requirements prescribed by the CBN.
The NSCIA chief stressed that the West African country has sought expertise from a number of Arab countries, notably Egypt, in setting up the Islamic bank.
Response
Ahmed Sani, member of the Jaiz Bank, had earlier said the construction of the Islamic bank came in response to demands of Nigerian Muslims to launch a banking system compatible with the Islamic Shari`ah, according to the Nigerianewsnow Web site last week.
Under Shari`ah, interest on bank accounts is haram (unlawful) because such interest is an increase of money made without effort or trade.
Islam prohibits depositing one’s wealth and taking specified increase without the risk of either loss or profit making.
Therefore, the type of investment allowed is where a person deposits money in an account and shares the risk of profit or losing.
Shari`ah further forbids Muslims from receiving or paying interest on loans.
Debate
The issue (setting up an Islamic bank) has divided Nigeria over a proposal to join the Islamic Development Bank (IDB), due to Christian protests over the step.
During a parliamentary session late last May, MP Hon Datti Baba Ahmed said Nigeria's sought-membership in the IDB would yield major benefits to the African country.
Nigeria will gain a $200 million benefits annually from its IDB membership as well as engendering the Nigerian economic growth, he said.
Datti stressed that the membership of Nigeria, the only West African nation that has not yet subscribed to the IDB, would also allow the country an access to the banks funds in return for a subscription of $4.5 million payable in installments over a period of seven years.
However, Christian MP Hon Halims Agoda attacked the proposal, stressing that such a step threatens to fuel a sectarian division in the country and breaches the constitution, which bans the membership in any groupings that could trigger sectarian strife in the country.
The head of parliament, in light of the heated discussions, decided to suspend the session and send the proposal to the Constitutional Affairs' Committee for revision.
Nigeria witnessed a similar debate, almost two decades ago, over joining the Organization of the Islamic Conference (OIC) as a full member.
Since its establishment in 1966 till the early nineties of the previous century, Nigeria had been holding an observer seat. In the mid eighties, Christians in Nigeria opposed the country's joining OIC as a full member.
The issue continued to draw heated debates until it was settled in the early nineties when Nigeria officially joined the Muslim grouping as a full member.
Nigeria’s recent census shows that Muslims make up 55 percent of the country’s 133 populations, Christians 40 percent and five percent atheists.
However, other estimates indicated that Muslims make up some 65 percent of the country.