ABSTRACT
In the previous chapter, I traced a path through existing economic models, defining their specific characteristics, starting with the Physiocrats and their influence on Adam Smith and progressing to contemporary economic analysis. This chapter continues in that vein, first looking at the influence neo-classical economics have had on Islamic economics and finance. It will examine some other principles and practices of Islamic economics and finance, and review the works of the early writers in the 1980s, such as Anas Zarqa, Monzer Kahf, Muhammed Uzair, Mabid Ali Muhammed Mahmoud Al-Jarhi and Umer Chapra, within the context of Islamic economics. Hasanuzzaman’s work on Islam and business ethics serves as an ethical bridge between Islamic economics and Islamic banking. Following this, it will analyse the most frequently used Islamic financial instruments or contracts, ranging from mudarabah (investment partnership) to tawarruq (Islamic overdraft), and from qard (interest-free loan) to sukuk (Islamic financial certificates). It will also assess the Islamic finance industry, encompassing global issues, the situation in Africa, and in particular the unfolding of the Nigerian regulatory framework, evaluating the general concept of the Islamic banking value proposition and using the Sterling Bank Islamic banking value proposition as a case study, looking at how it integrates with the primary purpose of the Islamic moral economic system while meeting the needs of the market. Finally, it will look at two aspects of Islamic finance that can be used to reduce poverty in Nigeria from a practical banking perspective: sukuk for infrastructural poverty reduction, and agro-commodity murabahah for consistent job-creation.
