Ghana to welcome its first Islamic finance institution
A Saudi Arabian institution is in the process of being licensed.The Bank of Ghana is in the process of licensing an Islamic finance institution, Governor Henry Kofi Wampah has announced.
The Saudi Arabian institution secured a provisional licence from Bank of Ghana to start operations last year, but had to ask for an extension because of challenges in meeting all key banking requirements. It would become the first one to operate in the country.
Islamic banking - which provides interest-free services - is estimated to be worth around $1 trillion and has the potential to eventually be worth $5 trillion in the next three years, according to figures from ratings agency Moody's.
Ghana could benefit from Islamic Finance as it currently faces huge funding gaps in various sectors and government borrowing gets more costly, says newspaper Modern Ghana. The government could also issue Islamic bonds to fund infrastructure projects.
The growth potential for Islamic finance is significant in Ghana, given that 17.6 per cent of the population is Muslim, according to figures from the Ghana embassy in the US.