The Director-General of the Islamic Finance Research Institute of Ghana (IFRI-Ghana), Dr Ali Shaibu, says Islamic finance provides a stronger, built-in risk protection framework for both customers and financial institutions.
He said the non-interest banking model is designed to promote risk-sharing rather than risk-shifting, helping to safeguard customers during periods of financial stress.
In an interview with 3Business on 27 January 2026, Dr Shaibu elucidated that, Islamic finance operates largely on partnership-based arrangements.
He stated that, “the system offers a range of products, including ‘mudaraba’, which is similar to venture capital financing. Under this structure, the bank provides capital while the customer manages the business or investment.”
Dr Shaibu explained that, “profits are shared based on pre-agreed terms between the bank and the customer. However, in the event of a loss, the bank bears the financial impact, provided the loss is not caused by negligence or misconduct on the part of the customer.”
He mentioned also that,” this approach ensures fairness, transparency and shared responsibility, which distinguishes Islamic finance from conventional interest-based banking’’
Meanwhile, the Monetary Policy Committee (MPC) of the Bank of Ghana has begun its first meeting of 2026 to review the country’s policy rate, with analysts projecting cuts of up to 500 basis points.
The benchmark rate currently stands at 18 per cent. However, the Governor of the central bank has signaled a cautious approach, despite notable improvements in Ghana’s macroeconomic indicators.
Speaking on TV3’s Business Focus on Monday, 26 January 2026, financial economist Dr Eric Boachie-Yiadom said a substantial reduction in the policy rate would reflect the progress made in stabilising the economy.
The Africa Policy Lens fellow said “I have consistently called for a sharp cut in the policy rate, adding that “a reduction of between 400 and 500 basis points would be appropriate if economic data continued to support the gains being recorded.”
Meanwhile, financial analyst Nelson Cudjoe Kuagbedzi projected a more moderate cut of up to 350 basis points.
The finance and tax analyst said the Governor’s recent public comments suggested a strong focus on achieving single-digit lending rates. He noted that “such an objective could justify an initial cut of around 350 basis points at the conclusion of the MPC meeting.”
Mr Kuagbedzi added that ”future adjustments would depend on how economic conditions evolve, with the possibility of revisions if inflationary pressures re-emerge.”
Meanwhile, Ghana has recorded a steady decline in inflation in recent months, alongside relative currency stability and improved fiscal discipline following the completion of its domestic debt restructuring programme. These developments have renewed calls for lower interest rates to support private-sector growth and reduce the cost of borrowing.
