The Second Deputy Governor of the Central Bank of the Gambia (CBG) has said that the Bank sees the broadening and deepening of Islamic finance as critical and is thus fully committed to implementing the best international practices to achieve the optimal regulatory environment.
Oumie Savage-Samba, who was speaking during the official opening of the regional workshop on Islamic Finance, said it’s also vital taking a leadership role to support all aspects of the sector’s development including achieving and sustaining macroeconomic stability, promoting effective use of technology to enhance efficiency and to enable Islamic finance institutions better manage risks and developing a system of research and evaluation.
The workshop sought to build the capacities of participants (regulators and practitioners) on Islamic finance from the participating countries of The Gambia, Nigeria and Sierra Leone, on the theme: “Towards an Improved Institutional Framework for Islamic Finance”. The three-day event was funded by the Standing Committee for Economic and Commercial Cooperation (COMCEC) of the Organisation of the Islamic Cooperation (OIC).
“Islamic banking outperformed conventional banking over the past decade, increasing its penetration rate above 15 percent in a dozen countries in the Middle East and Asia. Over the same period, Sukuk issuance increased twenty-fold to reach US$120 billion in 2013, and its issuer base is broadening with new issuance in Africa, East Asia and Europe,” she stated.
Mrs. Samba added that the potential of Islamic finance, especially in countries in Africa with significant Muslim populations and low levels of Islamic finance penetration is no doubt huge. To realise the potentials of sectors, she added requires a multi-pronged approach and concerted efforts from all players in the value chain.
She noted that this COMCEC project is a follow-up to the first project which was based on advocacy and awareness of Islamic finance, adding that phase II is expected to build more capacity and also assist develop the legal and regulatory framework for Islamic Finance in participating countries.
She revealed that even though Islamic finance represents a small share of the global financial market, the sector is growing exponentially and has fundamentally transformed the financial landscape in several countries in Asia and Middle East. “We are fully aware of the challenges facing the rapid development of Islamic Finance.”
For his part, Juldeh Ceesay, the Deputy Permanent Secretary at the Ministry of Finance said one of the key aims of the OIC is to foster strong links within the Islamic world and economic cooperation is seen as one of the key facets for building such ties. “This belief spurred on the creation of COMCEC in 1981, with the central aim of coordinating all OIC wide economic activities.”
He informed the participants that Islamic Finance refers to the provision of financial services in accordance with Shari’ah Islamic law, principles and rules. “Shari’ah does not permit receipt and payment of “riba” (interest), “gharar” (excessive uncertainty), “maysir” (gambling), short sales or financing activities that it considers harmful to society.”
To this effect, he noted the rapid growth of this model of financial intermediation over the last decade has highlighted the need for the appropriate policy measures to create the enabling environment for operations and orderly growth of Islamic financial institutions.
by Aji Fatou Faal-Sonko