Extra constitutional or ultra vires: debating the constitutionality and legality of Islamic banking in Nigeria Online publication date: Tue, 09-Nov-2021
by Terwase Isaac Sampson; Hemen Philip Faga
International Journal of Public Law and Policy (IJPLAP), Vol. 7, No. 4, 2021
Abstract: In 2011, the Central Bank of Nigeria (CBN) published regulations on non-interest financial institutions to regulate the emerging Islamic banking (I-banking) system in Nigeria. These regulations elicited huge condemnation from the ever-divisive Nigerian public on grounds of religious domination and discrimination, illegality and unconstitutionality. This paper appraises the constitutionality and legality of the CBN's regulatory regime for I-banking. It argues that whereas the regulations do not offend the constitutional right to freedom of religion and worship as contended by opponents, a few of its provisions are inconsistent with certain constitutional guarantees and the extant legislations on financial institutions in Nigeria. It distinguishes profit and loss sharing banking (PLSB) under Nigerian law from the concept of Islamic banking and recommends the overhaul of legislations on financial institutions in Nigeria with the view of removing the huddles to the legality and legitimacy of I-banking.
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