WHAT NIGERIA MUSLIMS ARE ASKING FOR IS HALAL INVESTMENT

What Nigeria Muslims are asking for is Halal Investment, not the so-called Halal economy in a secular state?

The government of a multi ethnic or religions nation must always be conscious of the environment where they operate. The cultures , values , ethics, and religion matter .Religion has never been an issue in some parts of Nigeria 🇳🇬.Politicians have turned it into a tool of manipulation that is tearing families apart.Now the economy. Why launching a Halal Economy in a multi religion nation ? Don’t cause confusion ……Let’s allow the poor breathe by embracing financial inclusion for a prosperous economy .The answer is Halal investment or standardised Islamic finance, NOT the conventional banks or investment in the supposed scheme of Islamic banking we have for now

Halal investing, or Islamic finance, has a multifaceted impact on a country’s economy by promoting financial stability, social inclusion, and ethical development. By adhering to Shariah principles, which prohibit interest (riba) and speculation, this financial model encourages sustainable, asset-backed investments in productive sectors of the real economy.

Positive Economic Impacts

Enhanced financial stability: Halal investing reduces systemic risk by prohibiting excessive leverage and speculation. This leads to a more stable and predictable financial environment that can prove resilient during economic crises, as was observed with Islamic financial institutions during the 2008 global financial crisis.

Increased financial inclusion: Islamic financial products and services can attract a significant portion of the population that is reluctant to engage with conventional banking due to religious or ethical concerns. This expands the financial sector and channels more capital into the formal economy, particularly benefiting low-income individuals and small and medium-sized enterprises (SMEs) through instruments like Islamic microfinance.

Encouraged economic diversification: Especially in oil-dependent economies, halal investing can facilitate diversification by channelling funds into non-oil sectors. This reduces reliance on volatile resource revenues and supports sustainable economic expansion.

Promote ethical and sustainable development: Halal investing channels capital toward socially responsible projects in sectors like healthcare, education, and sustainable infrastructure. This aligns with global trends like environmental, social, and governance (ESG) investing and supports a more balanced and equitable financial system.

Stimulated economic growth: Studies in countries with dual banking systems, including Malaysia and Indonesia, have shown a positive long-term correlation between the expansion of Islamic banking and GDP growth. Shariah-compliant tools like sukuk (Islamic bonds) also help to fund major infrastructure projects that drive development.

Growth of the halal industry: Investments in the broader halal economy—which extends beyond finance to include food, tourism, cosmetics, and logistics—can create significant economic opportunities and jobs. This expanding market attracts investment from both Muslim and non-Muslim consumers who value ethical consumption.

Challenges and Considerations
Despite its positive effects, the halal investment landscape also presents challenges for economic development:

Lack of standardization: The absence of a unified global regulatory framework for Islamic finance can make navigating the market difficult for investors. Differing interpretations of Shariah principles across countries can also complicate cross-border transactions.

Limited product availability: Compared to conventional finance, halal investing may offer fewer investment products, which can limit diversification opportunities for investors and potentially lead to underperformance if prohibited market sectors rally.

Potential for higher costs: Adhering to Shariah-compliant standards, such as ongoing screening and purification requirements, can result in higher operational costs for institutions. These costs may be passed on to the customer through higher fees.

Liquidity management issues: Islamic banks may face challenges in managing liquidity without relying on interest-based financial instruments. A limited availability of Shariah-compatible interbank markets and central bank facilities can complicate this process.

Low financial literacy: A lack of awareness and understanding of halal investing principles among both potential investors and financial professionals can hinder market penetration. Educational initiatives are necessary to bridge this knowledge gap.

Halal investing, rooted in Islamic finance principles, has seen significant growth over recent years. This form of investing adheres to Shariah law, which emphasizes ethical and socially responsible investment practices. As the global market increasingly values sustainability and ethical consumption …..

In conclusion, it’s good to embark on both formal and informal dialogue and education to get key players, operators and citizens enlightened on the opportunities available if embraced and what they are meant to put in place to make it works not the current approach .Nigeria has a lot to benefit from it, as highlighted above

Dr Ayodeji Abdulrauf FCS
CEO/Founder , ThinkStartUp Beyond Borders Inc ..www.thinkstartupbeyondborders.com