Islamic Economic System Solution to Poverty Alleviation

By Fred Ezeh Abuja

Professor Ganiyat Adejoke Uthman from the Department of Economics, Faculty of Social Sciences, National Open University of Nigeria (NOUN) has recommended in his research the adoption of an Islamic economic system in the management of the Nigerian economy.

She said the Islamic economic system has proven to be the solution to the growing poverty, deprivation and several other vices that are stunting Nigeria’s socio-economic growth and development.

The suggestion. which was contained in Professor Uthman’s inaugural lecture on the subject, “What has finance got to do with it?” to the NOUN, noted that other socio-economic measures taken by the government to eradicate or minimize poverty and several other ills of society have failed, hence the option of the Islamic economic system which has proven to be effective.

She said that the Islamic economic system focuses on promoting a financial system that is not interest-based, thus highlighting the inherent injustice of the interest-based financial system globally.

“It is therefore relevant to conclude that poverty reduction, equality and justice, reducing the significant gaps between haves and have-nots; financial inclusion, currency risk management for financial stability, insurance funding for contingencies, reducing corruption and strengthening the war against it, infrastructure funding, personal financial security, organization of business and government, development of capital market for economic growth with well thought out monetary policy policy on currency and money supply among others can be best achieved through alternative financing from revealing knowledge, i.e. the Islamic economic system,” she said.

“There was too much play on the system of capitalism that didn’t work after many tries. There has been a corruption of the system of capitalism – to borrow the words of Greenspan (2002); and there is an injustice in the interest rates of foreign creditors (Obasanjo, 2000).

“We tried everything from process and revenue policies to several varieties of monetary goals and they all came to a tricky end.”

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She referred to Aristotle’s statement that taking interests in the economic system was the most unnatural of all methods of obtaining wealth.

She reminded government and policy makers that finance drives growth and growth generates more finance. “Therefore, linking the real sector to financial socialism which is the basis of Islamic economics is recommended for individuals, companies and government at all levels.”

NOUN The Vice-Chancellor, Professor Olufemi Peters, in his remarks, described the inaugural lecture as the product of extensive research and commended the lecturer for adding value to the existing body of knowledge.