Ummahani Ahmad Amin is the curator of the African International Conference on Islamic Finance (AICIF) and the Managing Partner of Metropolitan Law Firm. In this interview, she talks about how the Nigerian economy can be boosted with Islamic financing and how the conference will contribute to that.
How has been the journey since you started?
It has been quite amazing. It started from a humble beginning in 2013. We had international speakers and people that mattered in that industry coming and from there the conference started gaining traction gradually. Fast forward to 2019, we held the fourth edition which was done in Lagos; the previous ones were held in Abuja. It was the best we had as there was support from the Islamic Development Bank, the Central Bank and the Ministry of Finance. It was very good.
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What we wanted to achieve was to create awareness which eventually happened. Now in 2021, the fifth in 10 years, we are looking forward to it. The difference this year is very clear from last year. We have a lot of organisations keying in as sponsors and promoters. The last one we had was good but this time, the traction is much. We are hoping that we get better as we go on with it. What we are trying to achieve is financial inclusion and we are on track.
What would you say are the challenges since you started?
One of the challenges we have is people having the notion that Islamic financing is for Muslims. We have over the years fought that phobia, we try to dispel that. Also, Muslims personalise the system without having an adequate understanding of what Islamic financing is all about. So, it was quite challenging educating the Muslims themselves on what the system is all about.
Being an Islamic scholar does not guarantee someone has the knowledge of what the system is about. Islamic financing is just a medium of transaction where Muslims and Christians can be involved in Sharia-compliant transactions. This was basically the challenge for non-Muslims to accept that it is all-embracing and to educate those that are financially excluded to be able to understand there is a product they can key into.
What I mean by financially excluded is that those who understood that conventional banking is not the proper thing to go into. So, this has opened ways for the economy to grow because everybody is now keying into this structure of Islamic or ethical banking. Even the non-Muslims are seeing the benefits of it because you find out that almost half of the people who understand the system in Nigeria and over the world are not Muslims.
We are gaining audience at the same time trying to see that we gain financial inclusion and awareness for a huge number of people to transact in ways that are ethical in nature.
How were you able to attract non-Muslims to embrace Islamic financing?
It was through awareness and the conference is one of them. Before the conference, we have had series of training for all the regulatory bodies in Nigeria, like CBN, Security and Exchange Commission, Nigeria Deposit Insurance Company and NAICOM. So, all the people that matter in the industry, we have had collaborations with them. We trained them in and outside Nigeria to be able to understand it. We have been involved in pushing for regulations. All the regulatory bodies have been helpful in putting the structures together for people to understand it.
What we have been trying to do is to create education for people to understand what the system is. We have series of training where people will come in and be aloof because their organisations have sent them not because they have an interest.
The conference is one way we have been able to debunk the feelings that it is purely for Muslims. Almost half of the speakers we have for the conference are not Muslims so we are trying to change the narrative. We have a session on where is my Sukuk for health infrastructure. We have another session called ‘Old game new money.’
We are trying to say Islamic financing has been there for over 1400 years and people are trying to key in it. So, we want to educate people on how they can leverage on it and make money. We want to be innovative, to let people know that the conference is not to be an avenue for asking what is Sukuk or Islamic financing but to understand how they can be able to take advantage of all the products that are available. We are also talking about social infrastructures like building schools.
What would you say the Nigerian economy has lost for not embracing Islamic financing early?
I feel we were a bit slow in trying to catch up with what the world is doing. It was a bit slow but now people are beginning to see its advantage. The federal government has floated three Sukuks and they were all successful. Now they want to float another one.
Also, states are aligning with it to improve their infrastructure. So I think that not venturing into it on time slowed our economy because we did not catch up but now people are beginning to see the potentials in Islamic finance which is not too late.
Stakeholders have called for more investments in halal business, how will the conference contribute to that?
One of AICIF’s objectives is bringing together major sector-specific players to network with key decision-makers, learn about potential opportunities and pipeline projects, share ideas and forge the future of Islamic finance in Africa.
Globally, there is a heightened appeal for sustainable and responsible investing in light of the SDGs and Islamic finance has commonalities in values and shared principles with such investments.
The conference serves as a platform for deal matchmaking and connecting businesses that are Shari’ah compliant with potential investors using Islamic financial products.
At last year’s conference, we had a FinTech showcase featuring Islamic FinTech start-ups pitching their products to an array of investors. This year, we have new Islamic finance market entrants participating at the conference and will be promoting innovative Islamic financial products.
These are the issues we seek to address by creating a platform for stakeholder’s engagement and deal matchmaking, geared towards promoting a viable financial system that can bridge Africa’s infrastructure gap.
How can this sector contribute to building infrastructural deficits in the country as the federal government is tilting into infrastructure development by the private sector?
According to the Islamic Finance Development Report 2020, the Islamic finance industry is valued at US$2.88 trillion in assets with Nigeria being one of the fastest-growing Islamic finance markets in Africa. Although still in its infancy, the Islamic finance sector already plays a pivotal role in financing Nigeria’s infrastructure deficit. Islamic finance tools like Sukuk are being utilised by sovereign and subnational governments and the private sector in Nigeria to finance infrastructure projects.
The growth of Islamic finance and the fact that its underlying principles support socially inclusive and development promoting activities make Islamic finance instruments suitable for infrastructure PPP projects. Islamic finance contractual forms like Istisna and ijarah are the most commonly used forms for large, longer-term financing arrangements, such as financing for power projects, transport infrastructure, social infrastructure and the like.
Infrastructure PPP projects are in a better position to attract Islamic finance because these projects offer many features that are well suited to the fundamentals of Islamic finance, such as asset backing and risk-sharing.
What is the theme of this year’s conference and why did you go for it?
The theme for the fifth AICIF is ‘Infrastructure Financing, Sustainability and the Future of African Markets 2.0’, which is a reprise of the fourth edition’s theme. The reprise reflects our focus on emphasising the increasing need to mobilise resources and orientate the investment community towards infrastructure financing using Islamic finance instruments as well as building a resilient Islamic finance system in Nigeria and Africa as a whole.
In light of the ailing global economy and the onset of the COVID-19, many African countries including Nigeria faced financing challenges with surging infrastructure needs. An obvious example being the response of most African countries to the recent outbreak of COVID-19 which unveiled the infrastructure inadequacies within the African health sector.
What impact do you see the conference making in the foreseeable future?
This year marks the fifth edition of the African International Conference of Islamic Finance and the impact of the conference thus far has been remarkable. AICIF has been able to promote Islamic finance in the private and public sectors and even build and enhance the private and public sectors institutional capacity on Islamic Finance.
We receive a lot of positive feedback from participants on the quality of the discussions and networking opportunities, some of which have yielded into projects, product developments and career opportunities in the Islamic finance sector.
I strongly believe that these positive impacts will be sustained over the years as we continually tackle topical issues vis-a-vis Islamic Finance prospects.