Reducing Poverty: The Prospects of Islamic Finance in Africa
Basheer Oshodi believes that the Islamic finance global growth of over 15% per annum may not make much impact in Africa if the continent is unable to solve its poverty challenges.
There has been much talk of the poor performance of Africa’s development and governance indicators when compared to other regions. Attention has also been focused on Africa’s poor performance in meeting the Millennium Development Goals and the inability of the region to meet its 2015 targets. Others have stressed the national economic empowerment and development strategy: designed to implement economic and institutional reforms, poverty alleviation, wealth creation, employment generation and value reorientation.
Redefining poverty in Africa
From a purely economic perspective, it is generally believed that Africa (unlike China or Japan) does not have any proficient indigenous model, so westernised neo-classical economic and political theories are pushed to the region with the assumption that they will be as effective as they were in Europe and North America.
Many also argue that the Islamic economic system is only a theory that existed hundreds of years ago and hence cannot fit into the ethno-linguistic diversified African states. How possible is it then that Islamic finance can reduce the impact of poverty in Africa within the context of the continent’s overall socio-economic position? Or should the question be changed to how best to use Islamic banking and finance to solve the poverty challenge?