CONSTITUTIONALITY OF ISLAMIC BANKING IN NIGERIA

BY:

ABDULQADIR IBRAHIM ABIKAN (Ph. D)

Lecturer, Department of Islamic Law, Fculty of Law, Univeristy of Ilorin; Solicitor and
Advocate, Supreme Court of Nigeria

Published in:

Contemporary Issues in Islamic Jurisprudence

A book published in honour of the Chief Justice of Nigeria
Honourable Justice Idris Legbo Kutigi

By

Rawel Fortune Resources, Benin.

2009

Chapter 7, Pages 94-121

 CONSTITUTIONALITY OF ISLAMIC BANKING IN NIGERIA

By

AbdulQadir Ibrahim Abikan Ph. D.*

1.0 Abstract

Nigeria has a unique approach to the issue of constitutionalism having regards to its

geographical, ethnic and religious composition. Attempt has always been made to thread the

path of sensitive balancing and even-handedness on every occasion of its constitutional

development. The method adopted is inclusiveness, accommodating every interest group as far as

the collective interests of the groups as a sovereign nation would permit, hence the issues of legal

pluralism, federal character and religion became pronounced. However, the constitutional

provisions relating to these issues, especially religion has remained the most controversial. As

efforts to establish Islamic banking system in Nigeria is reaching approval stage, it is

appropriate to examine the extent of its accommodation by the constitution and that is the focus

of this paper.

Key words: Constitutionality, Islamic, Banking System, Nigeria.

2.0 Introduction

Following the 1804 Sheikh Usman Dan Fodiyo‟s (hereinafter referred to as the Sheikh) Jihad1

and the consequent establishment of Sokoto Caliphate, the hitherto war-torn Hausa states 2

* LL.B, B.L., L.L.M., PhD., Lecturer, Faculty of Law, University of Ilorin, Nigeria.
1
Jihad, literally translated to strive in the cause of Allah, is the term used to denote a religious duty imposed on
Muslims to proclaim the word of Allah and spread Islam with their wealth and lives and struggle against Allah‟s
enemies, see Muhammad Abdul RaËf al-ManāwÊ, Al-Ta‛rÊf, (Beirut: Dār Al-Fikr, 1410H), 707.

2
constituting the present northern Nigeria and beyond were brought under an Islamic way of life

and system of government. The system popularly referred to a Sokoto Caliphate lasted for a

century, 1804-1903. However, the incursion of the British colonialists into the territory and its

rule that lasted between 1862 and 1960 foisted the western socio-political, legal and economic

(including banking) systems on the people of the country. The colonial rule and its various

systems were backed by laws and these laws have been the instrument used by the successive

governments to sustain the western ways even after independence.

Between 1903, when the colonialists eventually took over what was left of the Sokoto

caliphate by the defeat of the latter‟s army, and the nation‟s independence in 1960, virtually all

the elements of Islam found in the system had been uprooted or transformed. Fortunately, what

they were able to transform were official legal and, by necessary extension, political and

economic systems. The unofficial ones that the Muslims learn, imbibe and apply to themselves

on a daily basis at home and in the market place, remained in the books, committed to their hearts

and continued to prick their conscience.3 This is, most probably, the explanation for the incessant

and increasing agitation of Nigerian Muslims for „real‟ independence to apply full Islamic law in

their affairs.

At present, Nigerian Muslims are taking up the challenges of liberating themselves from the

shackles of the western socio-economic, political and ideological enslavement. Several efforts are

being made to ensure recognition by virtually all the past and the present Nigerian Constitutions

of full application of SharÊ‛ah which include the Islamic banking system. In 1991, Banks and

2
These consisted of part of old Sudan and Borno empire, it stretched across a greater part of the Savannah region of
West Africa, between Lake Chad in the east and middle Nigeria in the west and formed the greater part of the present
northern Nigeria.
3
See Yadudu, A. H., “Colonialism and the transformation of Islamic Law in the northern states of Nigeria,” No. 32,
(1992), Journal of Legal Pluralism, 135.

3
other Financial Institutions Decree (BOFID) was promulgated for the hitherto hostile banking

laws to pave ways for the establishment of profit and loss sharing (PLS) banking. Sequel to this,

two existing conventional banks were given provisional license in 1992, to operate interest free

banking but nothing was heard of it again until 1999, when Habib Nigeria Bank Limited started

her interest-free banking window.

In this paper, we shall be considering the extent to which the establishment and operations of

Islamic banking system can be accommodated under the Constitution of the Federal Republic of

Nigeria (CFRN), 1999. To this end, evolution of banking system in Nigeria vis-à-vis the

accommodation of Islamic banking by the banking laws was examined. An attempt is also made

to examine the correlation between the constitutionally enshrined fundamental human right and

Islamic banking in Nigeria. The intricacies of law making processes under the Nigerian

constitution as it affects Islamic banking were looked into. Finally, a review of the constitutional

debate on Islamic law in Nigeria as it relates to Islamic banking was made.

3.0 Evolution of banking system in Nigeria

In the pre-colonial Nigeria, especially within the caliphate, there were various means by which

business capitals were generated. Practice of money lending was evidenced in Sokkwwato

Township as far back as 1903.4 Credit facility was also given in form of goods being sold by

traders who paid the principal sum with a mark-up or share of profit, only after sale. Individuals

bound by common interest also pooled their resources together to form partnership at a

predetermined share of profit or loss.5 All these activities which were practiced under a strict

4
See Abubakar, S., “Birnin Shehu-the city of Sokoto: A social and economic history C.1809-1903,” (PhD Thesis,
Ahmadu Bello University Zaria, 1982), 114.
5
See Malami, U. H., Economic Principles and Practices of the Sokoto Caliphate, (Sokoto: The Institute of Islamic
Science, 1998), p. 99.

4
ribā-free policy of the caliphate 6 and continued long after the evolution of the conventional

banks are what an Islamic bank would set out to do today.

A case was reported of a successful Hausa business man in the 1930s-40s, Al-hajj al-Hassan,

who used to find outlets for surplus capital. He advanced money to young men of sound business

acumen requesting them to pay to him half their profit, or less or none at times, if no profit was

made. When he eventually banked with the conventional banks, he was reputed to be one of the

gilded men of Kano who for religious reasons stipulated that their deposit account shall be non-

interest bearing but would only receive good customer gift each year if given.7

Of the various activities relating to those offered by banks carried out in the caliphate only

that of bait al-māl (Islamic treasury) was institutional. Although, there is no clear evidence of

how the institution was ran in the caliphate except in the area of collection and distribution of

zakāh, which in itself is an act of financial intermediation, yet is was confirmed that the

institution was not only existent but also properly administered. 8 This, coupled with the trend of

development in the caliphate, make it safe to suggest that it would have performed many

functions of especially contemporary central banks. The fact that the status of shakhÎiyyah

‛itibāriyyah (juristic artificial personality) accorded bait al-māl is gaining wide acceptance

among the contemporary scholars9 lend credence to this proposition. The status makes bait al-

6
See Trimingham, J.S., Islam in West Africa, (London: Oxford University Press, 1959), p. 194.
7
Ibid.
8
See Anderson, J. D. N., Islamic Law in Africa, (London: Frank Cass, 1955), p. 216.
9
Muhammad al-JundÊ, Mu‛āmalāt al-bËriÎah fÊ al-sharÊ‛ah al-Islāmiyah, (Cairo: Dār al-NahÌah 1988), 194;
although Nyazee is of the view that the past Muslim jurists did not acknowledge the concept in Islamic law and insist
that certain areas of the Islamic Law of contract, ÍudËd and constitutional law with which the concept would clash
would need to be sorted out before it could be admitted, see Nyazee, I. A. K., Islamic Jurisprudence, (Islamabad:
International Institute of Islamic Thought (IIIT), 2003), 116-117.

5
māl an entity with perpetual succession, right to own property, to sue and be sued, responsibility

to discharge obligations and powers to lend and borrow money.

All the same, the traditional way of saving surplus capital was predominant before and long

after the colonial incursion. The process was to stock cowry shells10 in guard shaped clay pot; dig

the ground and burry the pot therein putting a mark on that spot to ensure identification for

„withdrawal‟. This method was also applied to the coin currency introduced by the colonialists

albeit with introduction of spreading yam flour on each layer of the money to avoid corrosion.11

In other parts of the country too, activities similar to those performed by the present day banks

like lending, safe deposit, guaranteeing, and agency function in respect of sales were carried out

before the colonialists intervention, but they were not coordinated as banking business of the

present.

Banking in the conventional way was ushered into the Nigerian economic system with the

establishment in 1894 of the Bank of British West Africa (BBWA) later known as Standard Bank

and now First Bank of Nigeria Plc. 12 The Anglo-Africa Bank which later became Bank of

Nigeria was established in 1899. These were later joined by the Colonial bank in 191713 and

British and French Bank, now United Bank for Africa in 1948. The setup clearly shows the

10
Cowries took dominant position among the commodities used as money throughout 19th century in the present
Nigeria; it is a tiny white hard shell of unclear origin but was believed, especially among the Yorubas, to be in
abundance in Benin Lands than any other part; this belief attracted a popular usage thus: “K`o`i ti‟‘iri‟ eru’ o’ni’
`Ado’ l`ohu’n’ot`aa’fu’n” expressing the irony of a person who has not acquired slave, yet insisting on selling it to
Ado (people of Edo Land in Benin who had more cowries to pay), Alhaj Yusuf Muhammad Mukhtar, interviewed on
behalf of the researcher by Folorusho, A.H. Esq., Ilorin, Kwara state-Nigeria, 10 July, 2004.
11
Alhaj Abdulkadir Oba Aremu, Interview on behalf of the researcher by Folorunsho A.H. Esq., Ilorin, Kwara state-
Nigeria, 11 July, 2004.
12
This bank was the principal importer of currency from the British Treasury until West Africa Currency Board was
established in 1912, when it was yet appointed the sole agent of the Board in Nigeria, see Danjuma, N., The Bankers‟
Liability, (Ibadan: Heinemann Educational Books (Nig.) Plc., 1993), 2 and 20.
13
This bank later became Barclays Bank in 1925 and is now the Union Bank of Nigeria Plc.

6
 monopoly of the banking system by foreign banks whose main concerns were to serve the

expatriates and the colonial interests.14

The spirited attempt made by the indigenous entrepreneur cum patriots to break the foreign

banks monopoly resulted in proliferation of establishment of locally-owned banks.15 There was

neither financing requirement nor regulations to restrict and control establishment and operation

of banks. The few operating indigenous banks were discriminately suffocated out of business.

The situation caused some reactions from the nationalists and resulted in the enactment of the

first Banking Ordinance in 1952, to regulate banking operations. Further agitations against the

discrimination of the foreign banks resulted in the draft of CBN Ordinance and Banking Acts in

1958.16

In 1991, Central Bank of Nigeria Decree No. 24 and Banks and other Financial Institutions

Decree No. 25 were promulgated. The thrust of their promulgation was to bring the new banks

and other Financial Institutions emerging as a result of 1987 financial liberalization and

deregulation under control. The two Decrees were amended by Decrees No. 3 & 4 of 1997

respectively; only to remove the limited autonomy granted the CBN by the 1991 Decrees. The

two Decrees were further amended by Decrees No. 37 & 38 of 1998 and Decrees No. 41 and 40

of 1999 respectively.17 If anything was constant in the activities of the conventional banks since

14
Igweke, K. I., Law of Banking and Negotiable Instruments, (Onitsha: Africana-Fep Publishers Ltd., 1991), 1.

15
By 1914, indigenous banks started springing up with the establishment of Industrial and Commercial Bank,
Nigerian Merchant Bank in 1931, National Bank of Nigeria in 1933, Agbonmogbe Bank and Nigerian Penny Bank in
1945, African Continental Bank and the Nigerian Farmers and Commercial Bank in 1947, see Danjuma, n. 12 at 3-4;
seven and nine other indigenous Banks were established in 1951 and 1952 respectively, see Central Bank of Nigeria
Economic and Financial Review, vol. 6, No. 1, (June, 1968).
16
These latter legislations have variously gone through amendments and repeals that crystallised in consolidated
statutes, the CBN Act (cap. 47) and Banking Act (cap. 28) both compiled in the Laws of the Federation of Nigeria
(LFN) 1990.
17
The latest amendment to the CBN law is in CBN Act, 2007 while BOFID is now codified as Banks and other
Financial Institutions (BOFIA) Act, Chapter B3, Laws of the Federation of Nigeria, 2004.

7
the colonial time to date, it is no other than the charges and payment of interest by both the

central and the commercial banks on all deposits and loans. In fact before 1991, it was not

permissible to operate banking business in Nigeria without taking or charging interest.

That was not all, since its attainment of “independence” in 1960 the nation‟s economy has

remained tied to the apron string of the colonialists through interest system. This was ensured by

contracting on behalf of Nigeria, an external interest based debt of USD28 million for railway

construction in 1958. The interest on this loan has being the means of siphoning the nation‟s

abundant resources. 18

4.0 Islamic Banking as a religious duty for Muslims

The various form of transactions undertaken by conventional banks fall under one or the other

types of economic transactions as broadly classified under the Islamic law. Under the

classification, transactions are either ‛uqËd al-mu‛āwaÌāt (contracts of exchange) or ‛uqËd al-

tabāru‛āt (gratuitous contracts) or ‛uqËd al-amānāt (trust based contracts). 19 Thus, we find

contracts such as buyË‛ (sales), shirkah (partnership), ijārah (lease or tenancy), rahn (mortgage),

wakālah (agency), Íawālah (assignment), and sulÍ (reconciliation) falling under al-mu‛awaÌāt.

Contracts of waqf (endowment),20 qarÌ (loan), hibah (gift), kafālah (guarantee) and waÎiyyah

18
As of year 2000, the nation had debt (interest) service obligation of USD4 billion per annum See, CBN, “Nigerian
external debt,” <http://www.cenbank.org/paymentsystems/externa_debt.htm>, (accessed 8 September, 2004); see
also, Meera, A. K. M., The Theft of Nations: Returning to Gold, (Malaysia: Pelanduk Publications, 2004), 33.
19
See Al-Zarqa´, Mustapha Ahmad, Al-Madkhal Al-Fiqhiy Al-„Àm, (Damascus: MaÏba‛ah Alf Bai Al-AdÊb, 1967),
vol. 1, 578; see also, Abdussalam, I. O., “Ahkām Al-ShurËt Al-Mustahdathah fÊ ‛uqËd Al-Māliyyah: Dirāsah
Ta‛sÊliyyah,” (Ph. D Thesis, IIUM, 2005), 36-37.
20
Waqf is an Islamic Institution whereby the founder relinquishes his ownership of real property which belongs,
henceforth, to Allah (swt), and dedicates, before his death, the income or usufruct of the property to some pious or
charitable purpose in perpetuity, see Muhammad AbdulRauf al-ManawÊ, Al-Ta‛arÊf, (Beirut: Dār al-Fikr, 1989), 731,
see also, ‛Ali Ibn Muhammad al-Jurjāná, Al-Ta‟rÊfāt, (Beirut: Dār al-Kitāb al-ArabÊ, 1984), 328.

8
(testament) are categorised under al-tabāru‛āt. And contracts like al-tawliyyah (cost price sale),

al-waÌÊ‛ah (less-cost sale) and al-wadÊ‛ah (deposit) are classified under al-amānāt, amongst

others.21

The conventional banks services include accepting all forms of deposit, financing, issuing

letter of credit, foreign exchange transactions, local and overseas guarantees, renting of safe,

accepting and servicing of certificates and shares, investment trusteeship and accepting

subscriptions in companies. The general principle governing transactions under the Islamic law is

permissibility. This is summarised by the Muslim jurists in the following jurisprudential maxim:

‫األصل فً المعامالت اإلباحة حتى ٌرد دلٌل الحظر‬

22

“The basic presumption is that all transactions are permissible unless they are prohibited by a

text.”

With this presumption, one would almost risk the conclusion that all the above mentioned

banking transactions are permitted. However, the objections raised against the practices of the

conventional banks stem from the fact that the substantive transactions of the banks, i.e.

accepting deposits and advancing loans are founded and heavily rely on the exceptions to the

general principle. One of these exceptions is couched in the prohibition of wrongful devouring of
23
property which the Quranic exegetes have linked to ribā (usury), maisir (gambling) and gharar

(hazardous transactions). 24 Also, no attention is paid to whether or not the banks‟ other

21
See Abdussalam, n. 19, p. 38.
22
See Ibn Taymiyyah, Taqi al-Din Ahmad, Al-Fatāwa al-Kubra, (Beirut: Dār al-Ma‛rifah, n.d.), vol. 3, 474 see also,
Sanou, Qoutoub Moustapha, The Sale of Debt as Implemented by the Islamic Financial Institutions in Malaysia,
(Malaysia: IIUM Press, 2001), 58.
23
Qur‛ān, al-Nisā´ (4): 29.
24
See Al-Mubarak Puri Safiur-Rahman, TafsÊr Ibn KathÊr, (Riyadh: Dār al-salām, abridged 2nd edn. 2003), vol. 2,
431.

9
transactions have to do with the exceptions.25 These objections became the basis for the demand

for and operations of Islamic banking system world over.

In specific terms, Allah and His Messenger in an intensely vitriolic tenor condemned,

castigated and prohibited the practice of ribā. An instance of such prohibition is where Allah

says:

َ َّ ‫ٌِن آ َم ُنوا ا َّتقُوا‬

‫َّللا َو َذرُ وا َما َبق ًَِ مِنْ الرِّ َبا إِنْ ُكن ُت ْم م ُْؤ ِمنٌِن‬ َ ‫ ٌأٌها الَّذ‬
26

“O you who believe! Be afraid of Allah and give up what remains (due to you) from Ribā (from

now onward), if you are (really) believers.”

Failure to heed this commandment attracts a promise of war between Allah and His Messenger

and the practitioners. 27 The Prophet has also been reported to have cursed: “the one who

consumes ribā, the one who gives it to others, the one who writes it down and the one who

witnesses it. He said: “they are all the same.”

The term ribā etymologically means increase, gain, height or excess.28 Before the advent of

Islam, it was known in this same connotation as the excess charged to the borrower in

consideration of the extension granted him for repayment of a loan after the initially agreed date

of maturity.29 It is literally translated into English as usury or interest. 30 In its technical Islamic

25
See Afolabi, J. A. et. al., “Determinants of Interest Rate Spread in Nigeria: An Empirical Investigation,” vol. 13
No. 1, (2003), NDIC Quarterly, 31-32; see also, AbdulGafoor, A. L. M. Interest-free Commercial Banking,
(Groningen: Apptec Publications, 1995), 1.
26
Qur‛ān al-Baqarah (2): 278; see also Qur‛ān, al-Baqarah (2): 275-276; Àl ‛Imrān (3): 123; and al-An‛ām (6): 160-
161.
27
Qur‛ān al-Baqarah (2): 279.
28
See Rohi Baalbaki, Al-Mawrid, (Beirut: Dār al-„Ilm lÊ al-MallāyÊn, 13th edition, 2000), 574; see also, Muhammad
Musleh Uddin, “Meaning of Ribā,” in Readings in Islamic Banking, edited by Hoque, A. (Bangladesh: Islamic
Foundation, 1987), 23; and Qur‛ān, al-Baqarah (2): 276; al-×ajj (22): 5 and al-NaÍl (16): 92 for similar usages.
29
See See Abd Al-Rahman Al-JaÐÊrÊ, KitÉb al-FiqÍ ‛alā madhāib al-‛arbaÑ, (Cairo: Mua’sasah al-Mukhtār, 2001),
vol. 2, p. 185; see also, Shafi, M. and Usmani, M. T. The Issue of Interest, (Karachi: Darul Ishaat, 1997), p. 19.

10
law usage, it has been generally defined as an unlawful gain derived from the quantitative

inequality of the counter-values in any transaction purporting to effectuate the exchange of two or

more species which belong to the same genus and are governed by the same „illah (effective

cause). It includes the deferred completion of the exchange of such species or even of the species

which belong to different general but are governed by the same „illah. It makes no difference

whether or not the deferment is accompanied by an increase in any one of the exchanged counter-

values.31 The quantitative inequality referred to in the definition explains the excess charged on

one of the commodities of exchange. And unlawfulness of the gain derived therefrom relates to

the determination of the difference and avoidance of the business risks attributed to other pure

transactions like trade. 32 It can occur in any humanly conceivable transactions of exchange

whether in cash or in material form. 33

The scholars and jurists of Islamic law are unanimous on prohibition of ribā as an exception

to the general rule of permissibility of transactions. They have however maintained divergent

positions both in the definition and applicability of the rule to the present day commercial loans,

especially banking transactions. Nonetheless, Islamic banking has for the last few decades been

in full operation assuming interest as a variant of ribā to be avoided in all its dealings. The above

prohibition of ribā imposes a duty of its avoidance on all Muslims as a matter of religious

30
Interest has although been defined as, money charged for borrowing money or paid to somebody who invests
money; and Usury as the practice of lending money at excessively high rate of interest, making the latter a specie of
the former, Oxford Advance Learner‟s Dictionary of Current English, 5th edition, “interest” and “usury”; yet, the
term under the Islamic law covers wider areas than these.
31
See AbË ZakarÊyyah YaÍya Ibn Sharaf Al-NawāwÊ, RawÌah al-ÙālibÊn, (Beirut: Maktabah al-IslamÊ, 2nd edition,
1984), vol. 3, 379; see also, Saleh, N. A., Unlawful Gain and Legitimate Profit in Islamic Law: Ribā, Gharar and
Islamic Banking, (London: Graham and Trotman, 1992), p. 16.
32
See Shafi, and Usmani, n. 28 at 20.
33
For a detailed discussion on the nature, types and development ribā, see Al-ÙabarÊ, Muhammad Ibn JarÊr, Al-Jāmi‛
Al-Bayān fÊ TafsÊr al-Qur‛ān, (Beirut: Dār al-Ma‛rifah, 1986), vol. 4, 59 upward.

11
practice. And by necessary implication, since the various services rendered by banks as referred

to above have made them essential part of the present world that rarely could a nation function

effectively without the services, strive to practice banking in an Islamic way also becomes a duty.

5.0 Islamic Banking under the Constitution of the Federal Republic of Nigeria 1999

It must be pointed out from the outset that there is no place in the Constitution of the Federal

Republic of Nigeria 1999 or the ones before it where provision is/was made for Islamic banking

or any other type. This may be explained by the fact that the Constitution does not pretend to be

capable of making provisions for all laws that need to be. Rather, by its supremacy provisions,34

it portends to give validity to all the laws of the land as the makers of such laws derive their law

making powers from it.35 By these provisions, the Constitution seeks to assume the status of

Kelson‟s concept of Ground norm. This is the basic norm, that is, the common source for the

validity of all norms that belong to the same order and the reason for their validity. 36 Thus, all the

banking laws in Nigeria, including the one enabling Islamic banking have their roots traceable to

the Constitution through this means.

Even where any of these laws was made before the Constitution came into force, the validity

of such law is co-opted into the Constitution as if its makers, then, also derived their powers from

it. The laws in this category are referred to as the existing laws. 37 The purport of the provisions

34
See S. 1(1) and (3), Constitution of the Federal Republic of Nigeria (CFRN), 1999.
35
See S. 4 (1)-(9), CFRN, 1999; see also, AbdulQadir, I. A., “Constitutional Impediments to the Total Enthronement
of SharÊ‛ah in Nigeria,” in A Digest of Islamic Law and Jurisprudence in Nigeria, edited by Oseni, Z. I., (Auchi: Dar
Al-Nur, 2003), 165.
36
See Morrison, W., Jurisprudence from the Greek to Post-modernism, (London: Cavendish Publishing Limited,
1997), pp. 337-338.
37
See S. 315 (4) (b), CFRN, 1999.

12
of section 315(4)(b) of the constitution was to bring all Nigerian laws predating its coming to

being into its ambit and deem them as having been properly made under it. Thus, virtually all the

laws regulating banking practices presently in Nigeria fall within this category.

5.1 Islamic Banking as a Constitutional Right of the Nigerian Muslims

The successive Nigerian Constitutions have always preserved the inalienable Fundamental

Human Right to freedom of thought, conscience and religion. This constitutional principle is

borrowed from the widely believed precursor of Human Right, Magna Carter of 1215;38 and the

United Nations (UN) Universal Declaration of Human Rights, 1948. The preservation also

relates, most importantly, to the fact that the religious past of the country, just like any other past

never gets dead and buried. The 1999 Constitution in no uncertain terms provides that every

person shall be entitled to freedom of thought, conscience and religion. These include freedom to

change his religion or belief, and freedom (either alone or in community with others, and in

public or private) to manifest and propagate his religion or belief in worship, teaching, practice

and observance.39

This provision necessitates a query as to what constitutes a religious freedom. The response

to this poser would vary, depending on the faith and the ideology of the respondent. A Christian

for instance may be prepared, in the notion of giving to Ceaser and God what respectively belong

to them, to limit his right to religious freedom to matters of faith and worship only. A person

38
It has been argued that all the heads of rights in this document and the UN declarations which also borrowed from
it later were copied, in the cause of the earliest contact of the Europeans with Islam and the works of the Muslims,
from the rights established in the Qur‛ān and Sunnah about 600 years earlier, see Alli, Y. O. “Islam as the Flashlight
of the Universal Human Right Formulation,” vol. 2, (2004), Al-Maslaha - journal of Law and Religion, 144.
39
See S. 38 (1), CFRN, 1999; this provision is almost an ipssisima verbal reproduction of section 30, article 9 (1) of
the European Convention for the Protection of Human Right and Fundamental Freedoms, 1953.

13
from the West may also be contented with the western compartmentalization of life into religious

and temporal.40

A Muslim on the other hand would view religion as covering all the facets of life. This is

because his spiritual and moral worth is tested against his daily interaction with others at the

congregational prayers, in marital union, in the pursuit of his legitimate livelihood and in the

holding of public responsibilities, amongst others.41 To him, right to freedom of religion would

encompass aqÊdah wa al-ibādah (freedom of belief and worship), right to live by Allah‟s

commandments (SharÊ‛ah) and (´amr bi al-ma‛rËf wa al-nahy ‛an al-munkar) right to encourage

good and forbid evil.42

Based on the foregoing background therefore, a Muslim would tend to avoid interest based

transactions practiced under the conventional banking and opt for Islamic banking system. This

is why an average Nigerian Muslim would either abstain from conventional bank or as a matter

of necessity, operate a current account for the reason of its non-attraction of interest. This state of

affairs however does not solve the problem as it merely amounts to what is referred to in Islamic

jurisprudential principle as:

"‫ " ارتكاب أخاف الضررٌن‬or "‫( "اختار ْاوهن الشارين‬adopting the lesser of two alternative

harms). The first and the most grievous of the harms is the involvement in interest transactions

and the adopted lesser one is dealing with such institution and not being bothered about what his

40
See Oredola, M. A. “The 1999 Constitution and the New Initiative on the SharÊ‛ah: Between the Ideal and the
Possible” in Al-Maslaha - journal of Law and Religion, vol. 2, 2004, p. 57.
41
See Tabiu, M. “Realisation of Freedom of Religion under the Nigerian Constitution: The Challenges before
Muslims,” vol. 1:1, (1999), Al-Mujtahid, 60.
42
Ibid; see also, Qur‛ān, al-Māi’dah (5): 45-50; and Àl Imrān (3): 104; while al-NaÍl (16): 97 differentiate between
the rewards for righteous deeds based on humanitarian grounds alone and the one based on religious belief.

14
deposit is being used for provided it is kept safe. That is, keeping it fallow as far as he is

concerned.

To the best of the writer‟s knowledge, the phrase “freedom (either alone or in community

with others) to manifest his religious belief in worship, practice and observance” in the above

referred constitutional provisions had not been subject of judicial interpretation in Nigeria before

May 2006. Thus, to do justice to its analysis, we have recourse to how it was interpreted in its

jurisdiction of origin and adapt to the Nigeria peculiarity.

The interpretation of that provision and section 30 of the Education Act 43 were the fulcrum of

the case of Ahmad v. Inner London Education Authority (ILEA)44 before the English Court of

Appeal. In that case, Mr. Ahmad (the appellant) had been issued with a letter by the respondent

(his employer) giving him ultimatum to either change his employment status from full-time to

part-time or resign his appointment. The implication of change of status is less pay and less

valuable pension right. The letter was issued because the respondent could no longer cope with

the disruption of lessons caused by the appellant‟s need to spend 45 minutes attending Friday

Jum‛at service every week outside the school. The appellant opted for resignation and brought an

action for unfair dismissal on ground of religious discrimination.

The Education Act 1944 also has provisions which carry the above freedom of religion

provisions of the European Convention for the protection of Human Right and Fundamental

Freedom further. The Act prohibits, among other things, requiring a teacher to receive less pay or

depriving him from promotion or other benefit for his religious opinion or for attending or

refusing to attend religious worship. Also article 9 of ILEA staff code allows a teacher who have

43
Education Act, 1944.
44
[1978] 1 Q. B. 38.

15
objection to working on a particular day of the term, being „a day of special obligation generally

recognised in his religion as days when no work may be done‟, to go on leave with pay.

The majority of the court dismissed the appeal holding that the Authority was not

unreasonable in issuing the letter and that it does not amount to unfair dismissal. Some of the

ratio decidendi were that the right has to be interpreted as to be consistent with the appellant‟s

duties under his contract of employment as it is being interpreted by majority of Muslim teachers

who do not take time off their prayers. Also, that giving the appellant, who is a member of

minority group - Islam, such privilege would amount to giving him preferential treatment over

the great majority of the people.45

However, Scarman L.J. in his dissenting decision allowed the appeal holding that although

the 1944 Education Act did not have the Muslims in contemplation because Islam was not a

substantial religious grouping then, yet, that does not remove the intention the Act was enacted to

serve. That is, forbidding discrimination on the ground of religion. He held further that the statute

should be interpreted in accordance with the societal reality which has recognised Islam as a

substantial religious group. And that if the Act could take care of Sabbath and Sunday as days of

special religious observance, apart from Good Friday and Easter Monday, it is implausible to

interpret taking 45 minutes on Fridays to go to mosque as constituting a breach of contract of

employment.46

Taking this case from either the view point of the majority or the dissenting decision, the

Constitutional provision gives the Nigerian Muslims a very firm footing to demand for and

establish Islamic banking system. If the case was to be decided in Nigeria, the majority decision
45
Ibid, per Lord Denning MR., at pp. 40-41 and Orr LJ. at p. 45; see also, Denning MR., What Next in the Law,
(London: Butterworths, 1982), pp. 283-284; with all respect to the Lord Justices, introduction of majority and
minority into the entitlement to fundamental human right is absurd, it is like saying that the minority are less human.
46
Ibid, per Scarman L J. at pp. 47, 48 and 51.

16
of the Lord Justices, on the strength of their numerical ratio, would most likely sway along

Scarman LJ‟s position. The basis for this proposition is the nation‟s historical antecedent of the

caliphate system and the fact that Muslims constitutes the majority of its population, with at least

50 percent and the remaining half shared between Christians and indigenous believers. 47 This

has been responsible for the inclusive approach of the Nigerian Constitutions in accommodating

the commitments of the various ethnic and religious groups in the country, hence the

constitutional principle of federal character.48

The very recent case of Bashirat Saliu & 2 Ors v The Provost, Kwara State College of

Education Ilorin & 2 Ors49 however provides a locus classicus interpretation of section 38 of

1999 Constitution on Right to Freedom of thought, conscience and religion. In that case, the

applicants who are female Muslim students of the respondent institution filed an application for

the enforcement of their Fundamental Human Right to freedom of Religion. The fulcrum of their

application is an objection they had to Article J of the dress code of the institution which

prohibits “Dress/Apparels that cover the entire face of an individual, thereby making the

immediate identity of the person inside impossible.”50 Relying on the applicants‟ averment that

47
The total population of Nigeria by the last 1991 census was 88,992,220, see The Federal Republic of Nigeria,
1991 National Census summary, (Lagos: National Population Commission, 199, 2; although the Commission always
avoid religious consideration in its documentation, yet, relying on data gathered from CIA World fact book, 2004,
Population Reference Bureau, 2003, Nigerian Demographic and Health Survey, 1990, amongst others, the
Population Resource Centre has put the estimated population as of 2005, at 137 million at ratio 50 per cent Muslims,
40 per cent Christians and 10 per cent old indigenous believers, see, Batchelor, A. ed. “Executive summary: A
demographic profile of Nigeria,” (Washington: Population Resource Centre),
http://www.prcdc.org/summaries/nigeria/nigeria.html> (accessed 9 September, 2004).
48
See S. 14(3) & (4) CFRN, 1999; see also, Ejibowah, J. B., “Constitutionalism and Political Inclusion in Nigeria,”
in Okon Akiba (ed.), Constitutionalism and Society in Africa, (Burlington: Ashgate Publishing Company, 2005), p.
112.
49
Unreported Suit No. KWS/28M/2006 Of Kwara State High Court of Justice, Ilorin, ruling delivered on 8 May,
2006.
50
See Kwara State College of Education Ilorin, “Dress Code for the Students of the Kwara State College of
Education Ilorin,” dated 28 September, 2005.

17
their entire life is purely guided by the principles of Islamic tenets which regulates their dress and

the literal dictionary meaning of the words „manifest, observance and practice as contained in

section 38 of the Constitution, the court held that the provisions of the above article J are

unconstitutional, null and void and of no effect whatsoever.51

The ratio of the above ruling could easily be extended to the religiosity of Islamic banking to

the Nigerian Muslims. Their avoidance of interest, which is the basis of the conventional

banking, is a serious matter of faith that, many Nigerian Muslims will not compromise. Since

lack of alternative banking system is capable of impairing their economic prosperity therefore,

their right to practise and observe their religious faith would require that they be given fair

opportunity as those that believe in the conventional system. Unlike in the Ahmad‟s case (above)

where the right was seen by the court as giving preferential treatment, establishing Islamic

banking in Nigeria would rather be effectuating the due right of the majority.

As a fundamental human right, the Government is not only obliged to facilitate the

actualisation of the system but also to avoid its being derogated upon except in the manner

provided in the Constitution.52 Anything to the contrary will be discriminatory against Muslims

by reason only of their religion. That too would amount to further infringement of their

fundamental and other constitutional rights. 53 This is more particularly so as people of other

religions are privileged by the status quo especially as they are not complaining.

51
Bashirat Saliu & 2 Ors v The Provost, Kwara State College of Education Ilorin & 2 Ors. Unreported Suit No.
KWS/28M/2006 Of Kwara State High Court of Justice, Ilorin, ruling delivered on 8 May, 2006, p. 11
52
See S. 45 (1), CFRN, 1999; and Oredola, n. 8 at 60.
53
See SS. 15 (2) and 42 (1), CFRN, 1999.

18
5.2 Islamic Banking and the Constitutional Debates on Islamic Law

The usual controversies and debate that greets every constitutional making process in the history

of the Nigerian constitutional development particularly on the issue of SharÊ‛ah, took a new turn

in 1999. The catalyst was Zamfara State‟s expression of intention to return to a full application of

Islamic law. This project according to the State‟s Commissioner for Justice includes the

establishment of Islamic banking system.54 Pursuant to this goal, the Government had floated

Halal Group which was to become Halal Islamic Bank later. However, reasons were seen to

merge the Group with Jaiz Group, another promoter with the same objective, for effective take-

off.55

The controversies especially among the legal luminaries have been hinged on the

interpretation of section 10 of the Constitution regarding adoption of a State religion. The section

provides that: “The Government of the Federation or a State shall not adopt any religion as State

Religion.” Based on this, the opponents of the establishment of Islamic law and by necessary

extension, establishment or promotion of Islamic banking especially by a government would

perceive the move by the Zamfara State Government as contravening the Constitutional

provisions. They have always interpreted the section as declaring Nigeria as a secular State.56

54
See Mahmud, A. B. “Sharia and Democracy: The Zamfara State Experience,” vol. 2, (2004), Al-Maslaha- journal
of Law and Religion, 50.
55
Halal Group was an investment holding company floated by the Zamfara state government purposely to promote
Halal Islamic bank, it however gave way to Jaiz International Plc. with similar object based on the advice of the
president of the IDB, who could not bring IDB into the scheme because of the then non-member status of Nigeria,
source: Alhaji Ibrahim Wakala (the Zamfara state commissioner for religious affairs), interview by thesis writer at
Pan Pacific Hotel, Kuala Lumpur, 30 June, 2005; see also, Jaiz International Plc. Annual Report and Accounts, 2004,
p. 4.
56
The word secular has been defined to mean an ideology and attitude to life that rejects spiritual values and the
religious outlook, see Trimingham, J. S. The Influence of Islam upon Africa, (London: Longmans, 1968), 1.

19
 One of such numerous views was expressed by Professor Agbede I. O., where he says: “In a

country that professed to be secular, the Islamic law as a distinct third system is hardly

compatible with the express provisions of the Constitution which prohibits any law that

discriminates on grounds inter alia of religion.” 57 Similar views have been expressed by

Professor Nwabueze B. O.,58 Professor John Boye Ejobowah59and Honourable Justice Kayode

Eso (Rtd.).60 To all these scholars and jurists, such act as Zamfara State government‟s amounts to

promoting or adopting Islam as a State Religion and as such unconstitutional.

These views were however rebutted. It was conversely opined that the constitutional

provisions rather than making Nigeria a secular state sees it as a pluralistic society and multi-

religious state. That explains why both the Federal and States Governments sponsor and fund

religious activities like Muslim and Christian Pilgrims Welfare Boards, establish Mosques and

Churches in State Houses. They give statutory recognition to and observe Saturday and Sunday

work-free days in conformance to Christian and Sabbath injunctions. Friday was made half-

work-day to allow for observance of Friday congregational prayer and public holidays were

declared to mark religious festivals. With all these no state can claim to be secular. This is more

particularly so as there is no place in the Constitution where such provision is contained.61

57
See Agbede, I. O. “The Legal Pluralism - the symbiosis of customary and religious laws: Problems and
Prospects,” in Fundamentals of Nigerian Law, edited by Ajomo, M. A. (Ibadan: Spectrum Books, 1989), 238.
58
See Nwabueze, B. O. “Constitutional Problems of SharÊ‛ah,” in The SharÊ‛ah Issue: Working Papers for a
Dialogue, (Lagos: Committee of Concerned Citizens, 2000), 17.
59
See Ejibowah, J. B. “Constitutionalism and Political Inclusion in Nigeria,” in Okon Akiba (ed.), Constitutionalism
and Society in Africa, (Burlington: Ashgate Publishing Company 2004), p. 112-113.
60
Cited by Adegbite, A. “SharÊ‛ah in the context of Nigeria”, in The SharÊ‛ah Issue, n. 58 at 73-74.
61
See AbdulQadir, I. A., “Constitutional Impediments to the Total Enthronement of SharÊ‛ah in Nigeria,” in A
Digest of Islamic Law and Jurisprudence in Nigeria, edited by Oseni, Z. I., (Auchi: Dar Al-Nur, 2003), p. 169; see
also, Oredola, M. A. “The 1999 Constitution and the New Initiative on the SharÊ‛ah: Between the Ideal and the
Possible” in Al-Maslaha - journal of Law and Religion, vol. 2, 2004, p. 58; and Yadudu, A. H. “The SharÊ‛ah Debate
in Nigeria: Time for Reflection,” in The SharÊ‛ah Issue, n. 58 at 39.

20
 Up till December 2005, a number of conventional banks were operating under the sole

ownership of or in partnership with some state governments. These included: Bank of the North

Plc., owned by about fifteen northern States; Oodua Group of company, holding WEMA Bank

Plc. and National Bank Plc., owned by Oyo, Osun, Ondo, Ogun, and Ekiti States; and Trade

Bank Plc., owned by Kwara and Kogi states amongst others.62 Thus, if the ownership of these

banks by state governments did not amount to adoption of state religion and was not

unconstitutional, then, the promotion and establishment of Islamic bank by Zamfara state and

any other state that desires it would not be as well.

Meanwhile aside from the need to redress the past religious discrimination or the exercise of

Fundamental Human Right to freedom of religion, Islamic banking aims at the overall prosperity

for all the members of a society as well as the nation vide equitable distribution of wealth and

resources. This was as much appreciated by the former Governor of the Bank of England, Sir

Eddie George when he said: “Indeed, it seems to me also that as a matter of general principle, a

wider range of financial products would benefit the whole of our Community, and that Islamic

products could prove to be attractive beyond the purely Muslim sector.”63 Thus, by giving the

necessary political will to effectuate the establishment of Islamic banking system, the

Government would only be fulfilling its primary purpose of welfare of the people as directed by

the Constitution.64

62
See Igweke, K. I., Banking and Negotiable Instruments, (Onitsha: Africana-Fep Publishers Limited, 1991), 2; and
Nigerian Deposit Insurance Corporation (NDIC), 2003 Annual Report and Statement of Account, 19-20; some of
them have merged with other banks in the process of the CBN capitalisation programme that ended in December,
2005.
63
See Parker, M., “FSA Authorisation: Challenges to IBB,” Islamic Banker, Issue No. 102/103, July/August, 2004,
6; see similar remarks in the keynote address of William L. Rutledge, Executive Vice President of the U.S. Federal
Reserve at the 2005 Arab Bankers Association of North America (ABANA) Conference on Islamic Finance: Players,
Products & Innovations in New York City, April, 2005.
64
See S. 14 (2)(b), CFRN, 1999.

21
6.0 Making Laws for Islamic Banking in Nigeria

In the Nigerian political experience especially since its independence, the legislative functions of

the country have been performed either by Military regimes or the legislative Assembly. During

Military regimes,65 the law making body was the all-military Supreme Military Council, changed

lately to Armed Forces Ruling Council. The Council also performed the executive functions of a

democratic government.66 In the democratic eras however, like in any other democracy, the task

of making laws for the peace, order and good government of the Federation or the States or any

parts thereof is the central duty of both the Federal and States Legislatures. They perform these

duties along with others like control of the executive excesses through oversight investigative

powers, confirmation of appointments and treaties, and sometimes mobilization of public

consents for executive policies as people‟s representatives.67

Nigeria operates bicameral Federal legislature comprising of a Senate and a House of

Representatives. There are also states Houses of Assembly as states legislative bodies in all states

of the federation. The scope of the respective legislative organ‟s law making powers is delineated

in the Constitution. The National Assembly has powers to make laws on matters contained in the

65
Military rule in Nigeria covered a period of 30 years out of her 39 years of independence before the present
democratic dispensation, that is, between 1966-1979 and 1983-1999.
66
These were constituted mainly by top ranking ruling Military men including the Head of State and his Service
Chiefs and not more than 10 men altogether making laws for the whole of the Federation while the Military
Administrators of each State were empowered to make laws known as Edicts for their respective States which were
administered like administrative units of the Federal Government, see Carnelian International, “Nigeria: The 1966
Coups, Civil War and Gowon‟s Government,” <www.carnelian-international.com> (accessed 26 February, 2005).
67
See SS. 4(1), (2), (6), (7) and 12, CFRN, 1999; see also, Abdulqadir, I. A., Constitutional impediments n. 61, p.
171; and Jain, R. B. “The Legislative Process in Development: A Conceptual Analysis,” in Legislative Process in
Development, edited by Jain, R. B. (New Delhi: Gitanjali, 1985), 8-9.

22
exclusive legislative list to the exclusion of the states‟ Houses of Assembly 68 while it has

concurrent powers with the latter to make laws on matters contained in the concurrent legislative

list.69 On the other hand, the States Houses of Assembly have powers to make laws on matters

not included in the exclusive legislative list and on matters contained in the concurrent legislative

list.70 In case of any inconsistency in the laws made by the National and states legislatures, the

law made by the National Assembly shall prevail.71 Matters of banks, banking, bill of exchange

and promissory notes constitute item number 6 on the exclusive legislative list. Thus, only the

National Assembly can make laws on matters pertaining to Islamic banks and banking.

Except in the areas of confirmation of nominations of ministers and chairmen and members

of some federal executive bodies where the senate has exclusive powers,72 the two houses of the

National Assembly enjoy essentially the same powers. They enjoy equal status in their law

making functions as any bill passed by one must have a concurrent passage by the other before

the President can assent to it.73

For the first time in the history of the Nigerian banking law, provisions were made for a

banking system that deviate from the conventional banking in the Banks and other Financial

Institutions Decree (BOFID) No. 25, 1991. In its categorization of banks in Nigeria, BOFID
68
These are contained in Part I of the second schedule to 1999 Constitution; see also, Attorney General of Ondo
state v Attorney General of the Federation [2002] 6 SCNJ 1.
69
These are contained in the Part II to the second schedule of 1999 Constitution; see also, S. 4(2) and (3) (a), CFRN,
1999.
70
See S. 4(7) (a) and (b), CFRN, 1999.
71
See S. 4 (5) CFRN, 1999.
72
SS. 147 (2) and 154 (1) CFRN, 1999.
73
A bill is a document containing proposed new law presented to the parliament for discussion; in Nigeria, it may be
government bill i.e. emanating from other arms of the government or private bill i.e. from members of the public or
emanating from either house, see Federal Republic of Nigeria (FRN), Standing Order of the House of
Representatives, Order XII, Rules 2 and 15 (2); see also S. 58, CFRN 1999; and, The National Assembly v The
President of the Federal Republic of Nigeria & 2 Ors [2003] 41 WLR 94 at 97.

23
provides that the President on the recommendation of the Central Bank shall, from time to time,

determine, as he may deem appropriate, the minimum paid-up share capital of each category of

banks. It then made Profit and Loss Sharing bank a category of the Nigerian banks with

minimum paid-up share capital, for the time being, of N50,000,000 (USD 5, 045 408.70).74 By

virtue of section 315 (4) (b) of the 1999 constitution, BOFID is presumed to be part of the

constitution and its makers with the authority of elected legislature as an existing law. The

Section defined existing law as any law including any rule of law or any enactment or

instrument, which is in force immediately before the commencement date of the constitution or

which having been passed or made before that date comes into force after that date. The

commencement date referred to in this definition is 29th day of May, 1999.75

In recognition of the peculiarities of this new banking system, the law made provisions for a

number of exceptions to facilitate its smooth operations. Chief among these exceptions is the

non-applicability of the need to display the interest rate in the banking premises of a PLS bank.

The relevant Section of the law provides:

Every bank shall display at its offices its lending and deposit interest rates and shall
render to the Bank information on such rates as may be specified, from time to time,
by the Bank, provided that the provisions of this subsection shall not apply to
Profit and Loss sharing banks.76

74
See S. 9(1) and (2) Banks and other Financial Institutions Decree (BOFID), 1991 (No. 25), conversion based on
the rate as of year of the enactment of the Decree at N9.91 to USD1.00, see, Free Encyclopaedia, “Exchange Rate
History of Nigeria Naira,” <http://en.wikipedia.org/wiki/Naira>, (accessed 24 January, 2006); it should be noted that
the amendment of this Decree by Decree No. 38 of 1998 shifted the power to determine the minimum paid-up capital
of banks from the President to the Central Bank and in the process created an impression that the categorisation of
banks introduced by the principal Decree has been removed by replacing the old subsection 2 with subsection 3 and
making the latter to be subsection 2. This impression must have informed the recent flat banks recapitalisation policy
of the CBN; this discussion is more appropriately treated in another paper by this author on the “legality of the banks
recapitalisation”.
75
See S. 1 (2), Constitution of the Federal Republic of Nigeria (Promulgation) Decree, 1999.
76
S. 23(1) BOFIA, 1991 as amended; emphasis mine and reference to “Bank” as opposed to “bank” in this law
relates to the Central Bank of Nigeria and any other bank respectively, see S. 61 thereof.

24
This provision presumes the payment or taking of interest on deposits or loans as a necessary

practice of banks and thus mandated the display of the interest rates. Its exemption of PLS banks

from the practice therefore sets a solid foundation for Islamic banking system. Similar provisions

of the Decree empowered the Central Bank Governor to further exempt PLS banks from the

general provisions of the Decree as he may think fit.77

Meanwhile, the banking laws in Nigeria, as they presently relate to Islamic banking, are at

best accommodative of its establishment and nothing is on ground to regulate the nitty-gritty of

its peculiar operations. This reason would justify the need for either a separate law and guidelines

for Islamic banking, as the case in Malaysia and Bahrain. 78 The needed law would suit the

philosophy of Islamic banking system, especially in terms of its types of business which are still

being restricted by the existing banking laws. It would also provide for supervision by SharÊ‛ah

Advisory Council and committees both at the CBN and the Islamic bank(s) respectively.

However, since the matter is out of the reach of states legislature, the passage of such laws may

not be as easy as those made by some states of the north to return to full application of Islamic

law.

As pressing as the need for this law might be, the composition of the National Assembly is

such that it may be difficult for a state or the Representatives of a few numbers of them to push

through a bill to be passed into laws especially the one with religious connotation.79 This position

77
See S. 52 BOFID, 1991, this particular section has been amended by removal of the exemption and introduction of
entirely new provision on manner of sharing revenues from penalties among the CBN, NDIC and the Consolidated
Revenue Fund.
78
The relevant law and regulations in Malaysia are Islamic Banking Act, 1983 (Act 276 Laws of Malaysia) as
amended; Guideline on Skim Perbankan Tampa Faedah (Interest-Free Scheme), 1993; and Guideline on the
governance of SharÊ‛ah Committee for the Islamic Financial Institutions, 2004; for Bahrain, see, Bahrain Monetary
Agency, Prudential Information and Regulatory Framework for Islamic Banks (PIRI), 2005.
79
Each of the 36 states of the Federation produces three senators and one is produced by the Federal Capital
Territory (FCT) to make 109 all together. The House of Representatives is constituted by 360 honourable members
representing federal constituencies of nearly equal population as far as possible, see SS. 48 and 49, CFRN, 1999.

25
would remain so however strong the desire of their representatives or genuine the need of their

people might be. Because, unless a matter is generally viewed as one of national importance, the

sponsors of a bill would have to lobby and convince at least a simple majority of members who

almost certainly would have contrary interest to serve. This is apart from the fact that

opportunities to delay or even kill a bill at proposal level and to change it in respect so

fundamental as to destroy its original purpose are built into virtually alls points of the legislative

process.80

Given the number of the northern States, 19 of them, and their Federal Constituencies based

on the population of their people reflecting their quota in the two Houses of the National

Assembly, it would be expected that the Senators from the north should be able to form a block.

To push such a bill for Islamic Banking through would therefore require winning few other

members from other parts of the county over.81 However, even among the northern States, only

Zamfara State government has shown commitment to the promotion of Islamic banking despite

the fact that majority of them have adopted full application of Islamic law. 82 As such getting

other Senators and Honourable members from those other northern States together to agree to

support bills on the banking law may be problematic.

Closely related to this is the problem of constitutional lacuna hinged on the Nigerian

bicameral legislative system operating at the federal level. By this system, a bill which may

80
See Keef, W. J. and Ogul, M. S. The American Legislative Process Congress and the States, (New Jersey:
Prentice-Hall Incorporation, 1993), 39.
81
57 senators representing 52.3 percent of their total number are from the northern states while their honourable
members counterpart are 189 representing 52.5 percent of the total number, see Anyanwu, C. N. D., The Law Makers
– Federal Republic of Nigeria 2003-2007, (New Jersey: Startcraft International, 2003), pp. 73-262; although this
publication like any other on national Assembly documents avoided reference to religious affiliation of the members,
yet the figures were arrived at tracing through the names of the members.
82
The state single-handedly took the initiative of establishing Islamic banking system as part of its policy to return to
full application of Islamic law before reason were seen to merge its efforts with that of Jaiz International Plc., see
Jaiz International Plc., Annual Report 2004, p. 4.

26
although emanate from either house must be passed separately by the other house. Agreement

must be reached by the two houses on any amendment that may be made on a bill before it is sent

to the President for assent.83 The lacuna relates to the silence of the Constitution on how long the

other house can hold a bill requiring concurrent passage. The House of Representatives took

advantage of this lacuna to withhold both BOFIA and CBN amendment bills passed by the

Senate since February, 2005. Those amendments which principally void the Central Bank of

Nigeria policy of parallel categorisation of banks84 would have had significant impacts on the

issuance of licence and operations of Islamic banking in the country. And that situation of

withholding gives a clear insight of what Islamic banking bill is likely to go through whenever it

is presented for passage. 85 This situation is incomparable to what obtains in similar situation

under the Federal Constitution of Malaysia, 1958 as amended.86

This problem would be compounded by the fact that legislators in the developing nations, as

typical of Nigeria, are always more conscious of their own personal and political interests. This is

unlike the case with their counterparts in the developed world where legislators are committed to

83
See S. 58 (2) and (3), CFRN, 1999.
84
The CBN in its July 2004 banks reform made an upward review of banks capital base from N2 billion to N25
billion on a flat basis for all banks, overriding the categorization of banks on different share capital contained in
section 9 (2) BOFID 1991 as amended, under which PLS banking was first recognised
85
This lacuna seems premeditated as it provides a safe haven for the executive to wrestle any bill, as it is confirmed
in this case, that would „undermine its policies‟ by lobbying the other House not to pass it; the same Constitution
would not allow similar fate to befall appropriation bill or any other money bill or a bill for imposition of increase in
tax, duty or fee or for reduction, withdrawal, or cancellation thereof; in such cases, the President of the Senate was
mandated within fourteen days after the lapse of two months of the other house refusal to pass the bill to convene a
meeting of the joint finance committee and if this committee could not resolve the differences, a joint session of the
National Assembly to pass the bill, see, S.59 (1) (a), (b), (2) and (3), CFRN, 1999.
86
Under S. 68, Federal Constitution of Malaysia, as at 1 April, 2000, whenever there is such situation of withholding
by one of the Houses, the bill becomes automatically passed upon expiration of 1 month from the date of passage by
the first house in case of financial bill and 12 months in case of other bill; see also, Wu Min Aun, The Malaysian
Legal System, (Selangor: Longman, 1999), p. 224.

27
working for the interest of their constituencies.87 This often makes the latter to oppose measures

which by all definitions are in the best interest of the people they represent.88 They are always far

detached from their people to know their concern or be reachable at will when matters concerning

the people are being treated in the legislative Houses.89

Quite a number of the legislators as much as other policy makers are owners and shareholders

in the existing conventional banks and possess some other interest earning assets. A Senator has

been quoted to have said that he was not only a bank customer but he has also been a shareholder

since the past twenty three years and knows the intricacies of what goes on in the sector.90 Given

this spirit therefore, it is very unlikely that majority of them will be disposed to making any law

that would tend to give room for rivalry with their personal interests in the name of economic

emancipation of the masses. This situation was adequately captured by the view that it takes a

large measure of self denial to accept an argument which threatens to slash a significant measure

of one‟s income. It makes no difference whether prosperity may eventually, through Islamic

banking, spread wide enough to make up for the loss at the personal level.91

7.0 Conclusion

87
A study in the US showed that Senators attend to an average of 302 and Representatives 115 cases a week from
their constituencies, see Johannes, J. R. “The distribution of casework in the US Congress: An uneven burden,”
Legislative Studies Quarterly, vol. 5 November, 1980, p. 519, cited by Keef, W. J. and Ogul, M. S. The American
Legislative Process Congress and the States, (New Jersey: Prentice-Hall Incorporation, 1993), p. 28.
88
See Jain, R. B. “The Legislative Process in Development: A Conceptual Analysis,” in Legislative Process in
Development, edited by Jain, R. B. (New Delhi: Gitanjali, 1985), p. 16.
89
Ibid.
90
Senator Idris Kuta, Chairman of the Northern Senators Forum, reacting to CBN bank reform after a meeting of the
Forum, see Ayodele Aminu, “N25bn Capital: CBN to bear merger costs- Northern senators‟ parley inconclusive,”
This Day, Wednesday, 4 August, 2004, 1 and 6.
91
See Ahmad, S. M. Towards Interest-Free Banking, (New Delhi: International Islamic Publishers, 1992), 22.

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As a Fundamental Right, the Nigerian Muslims are entitled to be given opportunity to operate

their economic activities in a manner conducive to their religious belief. Such opportunity would

mean provision of a level playing ground in a pluralistic society where citizens should have

choice of how they conduct their business. Much as no one is to be compelled to participate in

the new system, justice would also demand that no one is excluded from using or implementing

it. In Abraham Lincoln‟s words, “as I would not be a slave, so I would not be a master. This

expresses my idea of democracy. Whatever differs from this, to the extent of the difference is no

democracy.” And the writer wishes to add: effectuating the operations of Islamic banking system

as a constitutional right in Nigeria expresses a true idea of constitutionalism. Anything to the

contrary would amount to derogation of not only the right of the Muslims but also economic

prosperity of the nation as a whole.

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