Role of Islamic Law in the Efficient Management of Debt in Nigeria
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Date
2023
Journal Title
Journal ISSN
Volume Title
Publisher
Jurnal Hukum Novelty
Abstract
Introduction to The Problem: Nigeria's Q4 2021 Real GDP reached N20.33 trillion,
with a 3.98% YoY growth, marking the fifth consecutive quarter of positive growth
post-2020 recession. Despite this, the economy is deemed in crisis. Concerningly, the
government is accumulating more debt to service existing obligations, posing
sustainability issues and conflicting with Shari’ah wealth management principles.
Purpose: This study aims to analyze the impact of Islamic law on effective debt
management in Nigeria, specifically addressing the consequences of economic crises
that result in substantial national borrowing. Additionally, it aims to highlight Sharia
jurisprudence as a viable solution to alleviate Nigeria's economic challenges.
Design/Methodology/Approach: The Methodology employed in this study is purely
doctrinal method of legal research. Hence, the study places reliance principally on the
available literature by which the study explores relevant materials such as text books,
journals and internet facilities. Importantly, the study finds most useful the primary
sources of Shari’ah which are the Qur’an and Sunnah as well as the secondary sources
which include Qiyas and Ijma’.
Findings: The study finds that the economic crisis which Nigeria has found itself as a
result of the multiplier effect of excessive public borrowing cannot be divorced from
the adoption of the conventional economic system. The result reveals further that
Islamic law plays significant roles in the efficient management of debt as was
confirmed in the Malaysian Shari’ah compliant public debt management practices.
The study proposes, by way of recommendation, the practice of Islamic Wealth
Management to cushion the effect of the deficit budgets and the onerous debts on
Nigeria and increase investment activities with a view to impacting positively on the
country’s GDP. The study is therefore most relevant to the policymakers in the
Ministry of Finance, Debt Management Office, as well as the Lawmakers in the
country