Shari ah Rulings in Islamic Finance and the Challenge of Shar ah Talents in Nigeria By Ibrahim Muhammad Ahmad 1. INTRODUCTION Shari ah scholars are the key stakeholders in facilitating the development of Shari ah Governance (SG) in Islamic finance and in relegating shari ah as product and operational shapers. Shari ah scholars are expected to align Islamic financial products to suit conventional operating environment. 1 Shari ah scholars in the Nigerian Islamic finance sub-sector are labelled as experts that constitute two advisory bodies referred to as Advisory Committee of Experts (ACE) and Financial Regulation Advisory Council of Experts (FRACE). The advisory responsibility of ACE and FRACE to review and endorse internal policies and guidelines related to the principles underpinning Islamic finance through the rigorous Ijtihadic 2 deliberations in order to reach an opinion based on Islamic commercial jurisprudence is actually referred to as Shari ah ruling. Therefore, the opinion and or the result of the FRACE and ACE deliberations in line with their responsibilities, as provided by the law, becomes their ruling which is binding on Islamic Financial Institutions (IFIs). 3 The responsibilities of Shari ah scholars glaringly show that they are the gatekeepers of shari ah governance in the industry. The inability of the industry to have adequate gatekeepers to guard against derailing from shari ah compliance in all its operations and services is a serious challenge that touches the constitutionality and the integrity of the industry in the eyes of all the stakeholders and even beyond. This article intends to examine the challenge of manpower in the industry and whether the scholars that were paraded as experts passed the expert test. 2. Shari ah Scholars in Islamic Finance Shari`ah scholars refers to persons who are engaged professionally by IFIs to provide expertise in the Shari`ah compliance process. A times the word scholar may be preferred as a direct translation for alim (plural: ulama), which connotes a person who is learned and expert, in the context of the IFIs the word actually, is referring to a more specialized level within Fiqh al-muamalat (Islamic commercial laws) rather than Shari ah generally, or other areas of Islamic law. Furthermore, specialisation is dedicated towards providing expert opinions in the form of Shari`ah pronouncements and resolutions related specifically to Islamic financial services and usually not directly to the general public or businesses more widely. Therefore, in the interests of clarity, it is Lecturer, Faculty of Law, University of Maiduguri. He can be accessed through ibrahimahmad2003@gmail.com 1 Abdul Kadir, M.R. Shari ah As Key Pillar In Overall Islamic Financial Industry In Bank Negara Malaysia (ed) Contemporary Issues In Islamic Finance: Deliberation At The International Shari ah Scholars Dialogue 2006 (Putrajaya, Bank Negara Malaysia 2008) p.8. 2 Independent reasoning. 3 See Sections 1.0 2.0 of Central Bank of Nigeria (CBN) Guidelines on the Governance of Financial Regulation Advisory Council of Experts (FRACE), 2015, see also Sections 1 3 of Central Bank of Nigeria (CBN) Guidelines on the Governance of Advisory Committee of Experts (ACE) 2015 accessible at https://www.cbn.gov.ng/ visited 1 st /03/2015. 220
important to stress the professional (as opposed to an academic ) connotation associated with this role. Hence, the use of the term members of the Shari`ah Board is used rather than Shari`ah Scholars, to refer to ulama or others who provide their professional services specifically within the IFIs. 4 It would amount to governance highhandedness for members of Shari ah Board to sit over an issue in IFIs for legal pronouncement without the requisite knowledge and professionalism about the law governing it. Questions of interpreting, explaining and propounding the rules of Islamic law including Islamic banking law can only be done by eminent jurists who are properly qualified in the field of Usul al Fiqh (Islamic Jurisprudence), Fiqh Muamalat (Islamic Commercial law) and other related core areas of Islamic law and are familiar with the process of ijtihad (formulating rule of law from the sources). 5 Shari ah Rulings in Islamic finance are arrived at through consideration of a group of legal proofs and evidence that will either lead to certain knowledge of a Shari ah Ruling or at least to a reasonable assumption concerning the same made by those qualified to make such rulings. The primary sources of proof used to arrive at these rulings are the Qur an and the Sunnah. Shari ah Board may use these sources to arrive at verdicts by referring to precedence in the opinions of the Companions along with scholarly consensus, analogous reasoning, and policy-related considerations such as public interest, precautionary measures, and custom. 6 Looking at the qualifications of ACE members of having an academic qualification or possessing necessary knowledge, expertise or experience in the sciences of the Shari ah with specialization in the field of Islamic law of Commercial Jurisprudence (Fiqh al Mua'amalat), the desirability for the members to have skills in the philosophy of Islamic Law (Usul al Fiqh), good knowledge of written Arabic, ability to speak in both Arabic and English, exposure in the areas of business or finance especially Islamic Finance, dictates that ACE should be constituted by Shari ah scholars notwithstanding the fact that branding the ACE did not bear the word Shari ah. 7 3. Shari ah Rulings The term Shari ah ruling was used by Accounting and Auditing Organisation of Islamic Financial Institution (AAOIFI) Governance Standard 8 where it defines Shari ah Board (SB) as an independent body entrusted with the duty of directing, reviewing and supervising the activities of IFIs for the purpose of Shari ah compliance, and issuing legal rulings pertaining to Islamic banking and finance. 9 Islamic Financial Services 4 Section 3 of introduction to Islamic Financial Services Board (IFSB-10) P.4 accessible at http://www.ifsb.org/standard/ifsb10.pdf visited 3rd/03/2013. 5 Abikan, A.I. Integration of Islamic Financial Services: A Tug of Viability, Legality And Politics (2012) Journal of Islamic Economics, Banking and Finance, Vol. 8 No. 72 1, Pp. 87-88. 6 Colon, J.C. Choice of Law and Islamic Finance Texas International Law Journal (2011) vol. 46:411 Pp.412-413. Opinions of the Companions is Madhab/Ra i al Sahabah, scholarly consensus is al Ijma while analogous reasoning is referred to as al Qiyas, and public interest is al Masaleh, precautionary measures is al Daruriyaat, and custom is al Urf. See Khallaf, A. Ilmu Usool Al Fiqh (Dar al Hadeeth, Cairo, 2003) Pp. 50-107. 7 Section 5.2 of CBN Guidelines on the Governance of Advisory Committee of Experts (ACE) 2015 accessible at https://www.cbn.gov.ng/ visited 1 st /03/2015. 8 No 1 9 Onagun, A.I. and Malik, A. Shari ah Governance System: A Need for Professional Approach Proceeding of Sharia Economics Conference- Hannover (2013) Pp.73-74 221
Board (IFSB) Guiding Principle 10 in defining SB and Shari ah Governance (SG) declined to use the term ruling or Shari ah ruling but used Shari ah pronouncements and resolutions which are more or less corresponding with Shari ah ruling. 11 However, the Central Bank of Nigeria (CBN) Guidelines follow IFSB footsteps; the Guidelines use certain terms, which include, decisions, opinions, views and advice, and declined to use the term Shari ah ruling 12 except in one place where it gives a solution to an instance of divergence of views among members of ACE concerning a shari ah ruling. 13 Thus, it could be rightly argued that the terms, ruling, pronouncement and resolution, decision, opinion and advice can be used interchangeably to refer to Shari ah ruling. Shari ah rulings, which include Fatwa, refers to a juristic opinion on any matter pertaining to Shari`ah issues in Islamic finance, given by the appropriately mandated Shari ah Board. In jurisdictions where there is a central authority such as the National Shari ah Board or Fatwa Council, and FRACE in Nigeria, that central authority has the power to issue such Rulings. Once it is decided that an opinion should actually be implemented, it becomes a Shari`ah ruling 14 with full legal effect that binds IFIs. Shari ah Board should make it clear to IFIs whether it is issuing a pronouncement or resolution, recommendation or other remarks, so that there will be clear understanding of Shari ah Board s instructions, thus facilitating appropriate implementation of the instructions. The binding legal effect of a Shari`ah ruling is also subject to the relevant national legal and regulatory framework. However, in practice, the Shari`ah rulings are implemented by embedding them into the legal documentation of Islamic financial transactions; hence, they would generally bind the contracting parties, including the institution, 15 A Shari ah ruling shall be issued only through appropriate due processes, which, amongst others, should involve rigorous deliberation among members of the Shari ah Board over any proposed Shari`ah-compliant products or transactions that require a Shari`ah endorsement, as well as detailed scrutiny of the legal contracts and other documents relevant to the products or the transaction(s). 16 The advisory responsibility of ACE to review and endorse internal policies and guidelines related to the principles underpinning Islamic finance through the rigorous Ijtihadic deliberations by members of the ACE in order to reach an opinion based on Islamic commercial jurisprudence is actually referred to as ruling of the SB, the FRACE and ACE in the Nigerian industry. Therefore, the opinion and or the result of the FRACE and ACE deliberations in line with their responsibilities, as provided by the law, becomes their ruling which is binding on IFIs. 17 10 IFSB-10 Guiding Principles on Shariah Governance Systems for Institutions offering Islamic Financial Services (IIFS). 11 12 See Section 6.0 CBN Guidelines on the Governance of FRACE, Section 7.1 CBN Guidelines on Governance of ACE. 13 Section 9.2 CBN Guidelines on Governance of ACE. 14 Hukm al-shar i, See Onagun, A.I. and Malik, A. Shari ah Governance System: A Need for Professional Approach Proceeding of Sharia Economics Conference- Hannover (2013) P.73 15 Section 3 of introduction to IFSB-10 Pp.1-4 16 17 See Sections 1.0 2.0 of Guidelines on the Governance of FRACE, see also Sections 1 3 of Guidelines on Governance of ACE. 222
4. Divergence of Opinion The Guidelines 18 vested the responsibility of directing, reviewing and supervising the activities of IFIs for the purpose of Shari ah compliance, and issuing legal rulings pertaining to IFIs on SB. 19 The possibility of issuing conflicting shari ah rulings in respect of some emerging issues in respect of operation or products and services of IFIs is not surprising. This may not be unconnected to a particular principle of Islamic legal theory used by a particular scholar or SB in arriving at the ruling. The Guidelines preempted the scenario of divergence of views and opinions among members of SB; conflicts of opinions can take various forms; it may be among members of ACE of a particular IFI, it can be between two or more individual ACEs of different IFIs; the conflicts may be between ACE or ACEs and FRACE. The duties of Shari ah Board centre on their ability to perform ijtihad, legal reasoning. Ijtihad, in the context of Islamic law of banking and finance, can be defined as the application of independent reasoning by Shari ah Board to interpret the primary sources of Islamic law in light of executing their duties in IFI and or problem that needs solution in the operation of IFI. Giving a succinct and singular definition of what ijtihad entails is almost impossible, as eminent scholars such as Ibn Ashur and Al-Shatibi demonstrate. 20 Ijtihad, in modern Islamic finance, is essentially the product of Shari ah scholars intellectual efforts, in contemporary Islamic finance, to legally realize Islamic economic principles in light of the contemporary global financial system. The juristic interpretation efforts are central to the development of Islamic finance, as Shari ah Boards provide the certificatory services for Islamic financial products and services which financiers, as laymen in Islamic commercial jurisprudence, cannot by themselves provide. It could be argued that issues arising from the application of contemporary Islamic finance ijtihad, as the two-stage definition of ijtihad provided by Al-Shatibi which, inextricably links the practice of ijtihad to the higher objectives of Islamic law, the Maqasid al-shari ah. 21 The proper utilization of Ijtihad will provide Islamic finance industry with fresh interpretations that are suitable for the feasibility of the industry. Ijtihad plays an important role in applying the Shari ah to contemporary society, moreover, the contemporary Islamic finance industry. Vikor is of the view that Ijtihad is a prerequisite for the survival of Islam in a modern world. The Prophet practiced ijtihad and encouraged his Companions to exercise it; on several occasions the Prophet was reported to have tolerated his companions deficient exercise of ijtihad. This does not deny the fact that the Prophet would later revise any inadequacy. 22 The industry is witnessing divergent views on contemporary issues of scholarly Ijtihad. The diversity provides the opportunity to fulfil Maqasid al-shari ah on a wider scale and Maslaha on a more macro level as Islamic finance is practiced in various states. Ibn Rushd explained the reasons for 18 See CBN Guidelines, particularly on duties and responsibilities of FRACE and ACE 2015 accessible at https://www.cbn.gov.ng/ 19 Onagun, A.I. and Malik, A. Shari ah Governance System: A Need for Professional Approach Proceeding of Sharia Economics Conference- Hannover (2013) P.73, See AAOIFI Governance Standard No 1. 20 Ahmed, T. Islamic Finance ijtihad in the Information Age: quo vadis? 8th International Conference on Islamic Economics and Finance organized by Centre for Islamic Economics and Finance, Qatar Faculty of Islamic Studies, Qatar Foundation P.2 21 22 Hasan, A. An Introduction to Collective Ijtihad (Ijtihad Jama i): Concept and Applications The American Journal of Islamic Social Sciences 20:2 P.29 223
divergence of Ijtihad as six, concluding that the reasons indicate that the difference of opinion on a particular matter is a natural event which should not be denied nor should it be seen as contrary to the Shari ah. This is not a sabotage to the efforts being made to standardize elements of Shari ah Governance, particularly divergent rulings, the reality is that both diversity and standardization work hand in hand. The wealth of diversity between the four Sunni Schools of Islamic Jurisprudence provides ample substance on which to continue to develop modern products which the industry requires. Thus, the pragmatic nature of the Shari ah should be embraced as a system which facilitates the development of Ijtihad to further apply Shari ah tenets towards achieving the objectives of the Shari ah. Consequently, the existence of necessary application of Ijtihad should not be seen as a hindrance to harmonization of the industry. Divergence of Ijtihad when applied correctly in matters of fiqh al-muamalat should therefore not be considered as a threat but as a means to achieve a more ultimate objective for the industry. Therefore, a realistic approach to standardization should be adopted without compromising Shari ah principles. 23 Some argued for the application of a new methodology of Ijtihad referred to as collective Ijtihad, it is a new method formulated by contemporary Scholars in response to some challenges which include the challenge of harmonization of IFIs rulings. Although it has not been precisely defined yet some scholars defined it loosely as the agreement of the majority of jurists on any matter. Currently, the application of the new method can be seen in practice of Shari ah Boards and International Standard Setting Institutions of IFIs. Despite several attempts to equate collective Ijtihad with classical Ijma, it has been established that the former is inferior to the latter and yet the former is superior to individual Ijtihad. Therefore, decisions arrived at via collective Ijtihad are not considered binding, except for IFIs who are themselves obliged to follow. Nevertheless, this kind of Ijtihad is more practical, in the contemporary world and more reliable than individual Ijtihad. 24 Consequently, the establishment of International IFIs like the AAOIFI, IFSB and the structure of Shari ah Boards have been made to achieve these objectives. Figh Academies under the auspices of Organization of Islamic Conference (OIC) in addition to such other objectives are complimentary as well. IFIs are required to comply with the Resolutions and Standards issued by these Institutions as an effort towards harmonization of Islamic Financial Standards globally. The CBN Guidelines, in effort to harmonize the practice and operations of the industry through the means of collective Ijtihad, accord superiority to the opinion of FRACE in a situation where ACE holds a contrary opinion than that of FRACE. 25 The opinion of FRACE also takes precedence in case of conflict of opinion among members of the ACE concerning a Shari ah ruling. FRACE is the final authority issuing Shari ah rulings within the industry. 26 These are giant steps toward standardization and harmonization of the industry through the feasible method of collective Ijtihad. 23 Elshayyal A. Brief Look at Ikhtilaf Diversity of Ijtihad in Islamic Finance Opalesque Islamic Finance Intelligence p.15 available at opalesque.com accessed on 27th June, 2013 24 Hasan, An Introduction to Collective Ijtihad (Ijtihad Jama i): Concept and Applications P.44 25 Section 9.0 of Guidelines on the Governance of FRACE. 26 Section 9.2 of Guidelines on Governance of ACE. See https://www.cbn.gov.ng/ 224
5. The Challenge of Shari ah Scholars The challenge corners around the shortage of Shari ah Talents who are the driving force of the industry. The bottleneck of shortage of Shari ah Scholars is so glaring that is not subjected to dispute. Shari ah scholars are the gatekeepers of Shari ah Governance in the industry. The inability of the industry to have adequate gatekeepers to guard against derailing from Shari ah compliance in all its operations and services is a serious challenge that touches the constitutionality and the integrity of the industry in the eyes of all the stakeholders and even beyond. 27 The challenge in the shortage of manpower includes quality and quantity of scholars. It has been attested at the global level that the challenge does not affects quality only but the number of those who aspire or those who have been appointed to various shari ah boards of various institutions is in small margin compared to the number of institutions. 28 This has been corroborated when the CBN went on excursion to Sudan and Malaysia to constitute FRACE. 29 It is further strengthened when Jaiz bank appointed an expatriate as the chairman of its ACE. 30 Therefore it is indicator that the quantity of Shari ah Talents required to keep and guard the principles that underpins the operations of the industry in Nigeria is below the margin otherwise such nationals could not have been appointed to various institutions as experts and even to chair some committees of experts. The low margin in the number of experts has reached a level of exhausting and utilizing of a body of experts in multiple regulatory institutions. FRACE is still the body that serves as an expert advisory body to Central Bank of Nigeria (CBN), Nigerian Deposit Insurance Corporation (NDIC), Securities and Exchange Commission (SEC) and other statutory regulatory bodies. 31 These are facts that lead to the conclusion that the quantity of shari ah scholars that need to serve the industry as gatekeepers is far below the margin. The high concentration of a few scholars serving the industry is also a fact that further buttresses the outcry of the industry to the small number of shari ah experts. 32 The identity of those scholars required to serve is indeed without turning to their qualities and experience in dealing with the complexities and linkages in a modern economy is of deer necessity. Therefore, the issue of quantity and quality are two issues to be argued differently. The issue with the existing scholars in terms of their qualifications and training to be effective in dealing with the complexities and linkages in a modern economy is also a challenge in the manpower tussle within the industry. The personalities, particularly the Nigerian personnel, appointed to serve as experts in the industry lack the requisite experience and qualification of modern finance. Most of the scholars so appointed are Islamic based scholars who are mono-shari ah based trained scholars or monoconventional trained scholars either in formal schools as universities and colleges or in 27 Farook, S.Z. Farooq, M.O. Shariah Governance for Islamic Finance: Challenges and Pragmatic Solutions, available at http://ssrn.com/abstract=1813483 visited on 5 th /05/2015 28 29 See the composition of FRACE. A member of Sudanese nationality and a member of Malaysian nationality were appointed to serve in FRACE as members. Visit https://www.cbn.gov.ng/ 30 Professor Munzir Kahf is the chairman of ACE of the Jaiz bank. Visit http://www.jaizbankplc.com/ 31 Section 6.1.ii Guidelines on the Governance of Financial Regulation Advisory Council of Experts for Non-Interest (Islamic) Financial Institutions In Nigeria 2015 32 Farook, & Farooq, Shariah Governance for Islamic Finance: Challenges and Pragmatic Solutions, available at http://ssrn.com/abstract=1813483 visited on 5 th /05/2015 225
the informal traditional schools in the ancient and or classical form. 33 The concept of present Islamic finance industry differs from the ancient Islamic commercial and financial transactions that were reported in the raw and the secondary sources of Shari ah; the modern concept of Islamic finance is a transformation process from conventional finance to Islamic finance. The process can as well be referred to as islamisation of the finance industry. The packages and services offered by the conventional finance are the same with that of the Islamic finance. The two industries, the Islamic and conventional industries are regulated by the same institutions, called by the same name as banks or other intermediary financial institutions and regulated by the same set of statutes with some variations to address the specificity of each industry. However, the fundamental difference lies in Shari ah governance. Modern Islamic finance industry bears all the identities of conventional finance within the Shari ah boundary. Therefore, the Shari ah gatekeepers must be well experienced and acquainted with modern finance and Islamic finance to be qualified to give opinion as experts. Following the above argument would beg the question as to whether the present appointed experts suit the label and qualify as experts. Indeed majority of the appointees to various committees of experts, looking at the CBN requirement, may be qualified to be so labelled as shari ah scholars. The training they undergo is a training that acquaints one with shari ah expertise. Modern Islamic finance is an islamisation of the products and services of conventional finance, accordingly, for one to be so appointed as an expert, he needs to posses the dual training of Islamic and conventional finance. Short of that is below the expected bench mark and may lead to opinions without appreciation of the scenario on ground. Therefore, there is need for change in the approach. The requirement and qualification for experts should make it as a must that the candidate must have expertise in both Islamic and conventional finances or in the alternative a provision for training candidates biased in Shari ah or conventional finance for a certain period prior to their appointment as experts. 5.1 Efforts by Aaoifi to Fill the Gap through Certified Shari ah Advisor and Auditor Program (CSAA) Scheme The manpower challenge cannot be fixed overnight. The challenge calls for a global infrastructure to fill the gap, the seriousness of this issue is exemplified in the recent initiative by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) to set a new standard for Shari ah Scholars, although such initiative is meeting stiff resistance from some corners. 34 AAOIFI has introduced a program called Certified Shari ah Advisor and Auditor program (CSAA). The program is geared toward curtailing the manpower challenge. However, the challenge with the program is that it does not really qualify scholars to create new opinions, but allows successful candidates to apply existing standards to their 33 FRACE member is required to possess knowledge, expertise and experience in the field of Islamic Jurisprudence with specialization in the field of Islamic Commercial Jurisprudence and to demonstrate Knowledge in the philosophy of Islamic law, Knowledge of written and spoken Arabic as well as English languages and Exposure in the field of business, economics or finance especially Islamic Finance. See section 4.3.2-3 of Guidelines on the Governance of Financial Regulation Advisory Council of Experts for Non-Interest (Islamic) Financial Institutions In Nigeria 2015. The emphasis here is on shari ah science whereas other conventional finance was not emphasized as a qualification. 34 Farook, & Farooq, Shariah Governance for Islamic Finance: Challenges and Pragmatic Solutions, available at http://ssrn.com/abstract=1813483 226
professions as Shari ah advisors or auditors. Furthermore, the current CSAA program merely provides training equivalent to examinations preparation, without ensuring any meaningful training especially, experience-based to the certificate recipients. However, many of these CSAA qualified individuals are already having experience and getting the certificate as recognition. The process is not providing training to new individuals to qualify for the program. 35 The question that comes to one s mind is, what is the solution to such a challenge? It has been argued that the gap cannot be filled overnight. The effort made by AAOIFI towards developing shari ah talents through the establishment of CSAA is commendable but is not without challenges as argued previously. 5.2 University Doctorate System may Help Some argue that the university Doctorate system provides the best form of educational discipline and rigor to qualify an individual to be universally recognized as a Shari ah scholar or a scholar in any other field relevant to Islamic finance 36. The higher tier of doctorate requires the submission of a portfolio of published research of a very high standard, much like how some Islamic scholars are recognized by other established scholars for their advanced application of Shari ah concepts to contemporary challenges. Similarly, even the Doctorate system, as employed by most universities in the world now, requires the candidate to prove his level of knowledge in a certain field by undertaking peer examined research, which is also expected to be sustained during one s scholarly career. 5.3 Structured Mentoring and Stewardship in Shari ah Training as Another Recommended Solution Further, the system most closely replicates mentored learning as the student relies on the supervisor, an established scholar to transfer his knowledge within a structured framework. This can be referred to as stewardship and the most important period of a steward s formation occurs during formal doctoral education. To understand and appreciate the fact that not only there is no inherent problem with the doctoral educational system from the Islamic perspective, but also that this structure of education is of great merit evolving from accumulated human experience. 37 The argument for doctorate as a gate pass for recognition as a shari ah experts admits that the system is not free from inherent problems. Adopting the argument would compress the door for developing the experts; moreover, an academic doctorate without experience is not more than an acclaimed expert with no expertise. It could further be argued that experts committees should be comprised of members who are trained in different schools of jurisprudence with Shari ah expertise and different lengths of experience, and where appropriate, comprise of different nationalities. 38 The idea of having members of mixed expertise and experience in committees is the need for having a consistent supply of highly competent and qualified members that would create adequate time and opportunity to grooming a new group of people who can acquire the 35 36 The relevant field include Islamic law with specialisation in Fiqh al Mu amalaat (Islamic Commercial Jurisprudence), Islamic economics and Islamic finance 37 38 Principle 1.1/17 of IFSB-10 Guiding Principles on Shari ah Governance System for IIFS. 227
relevant competence and experience. 39 Certainly the best way of achieving this is through a mentoring system whereby the more experienced members can guide and supervise the less experienced ones. 40 The more experienced members, due to their strong reputation and experience and because of scarcity of Shari ah Talents, will usually have a lot of other commitments such as serving on other experts committees. 41 Hence, in terms of time allocation, it is likely that the less experienced members can dedicate more time to studying the issues and proposals for deliberation at Shari ah Board, thus allowing an efficient and effective learning curve between the two. 42 The combination of different calibre of experience and expertise would nurture a better balance between experience and fresh ideas, which would likely facilitate innovations as well as harmonization throughout the experts deliberations. 43 It is desirable that the experts committees should comprise members of different nationalities; however, indigenes should be included, among others, to promote the development of local talents and expertise. 44 Indeed, it enhances and develops local talents and expertise, but may cost a higher burden on the market players particularly, IFIs that have just spring up in the Nigerian finance industry. 45 The CBN guidelines have not incorporated the requirement and desirability of having mixed nationalities in FRACE and ACE as provided by IFSB Guiding Principles. 46 However, an examination of their composition reveals that they have complied with such requirement despites its omission in the CBN Guidelines. 47 Development of shari ah experts through the system of stewardship can also serve as a solution to the challenge. The less experienced scholars would be trained over a period of time under the stewardship of the experienced scholars. A steward is a scholar in the fullest sense of the term, someone who can imaginatively generate new knowledge, critically conserves valuable and useful ideas, and responsibly transforms those understandings through writing, teaching, and application. Stewardship also has an ethical and moral dimension; it is a role that transcends a collection of accomplishments and skills. A steward is someone to whom the vigor, quality and integrity of the field can 39 Notes on Principle 1.1/17 of IFSB-10 Guiding Principles on Shari ah Governance System for IIFS. 40 41 Although FRACE and ACE members have certain limitations and restrictions for serving on more than one board within the purview of the CBN at a time, therefore, a member can serve on more boards of different sectors of finance industry; such as Takaful subsector. See section 5.0 of Exposure Draft Guidelines on the Governance of FRACE on Nis, Section 6 of Exposure Draft guidelines on Governance of ACE on NIFIs. 42 Notes on Principle 1.1/17 of IFSB-10 Guiding Principles on Shari ah Governance System for IIFS. 43 44 45 CBN has constituted and inaugurated FRACE (Financial Regulatory Advisory Council of Experts) with Sheikh Sheriff Ibrahim Saleh as the Chairman with three other Nigerians and two foreign nationals of Sudan and Malaysia. See www.nigeriaintel.com accessed on 1 st May 2013. Jaiz bank and Stanbic IBTC Bank have constituted ACE. Professor Monzer Kahf, a non-nigerian national, is the chairman of ACE Jaiz bank. CBN, being the regulator, and Jaiz bank, a market player, have complied with the IFSB requirement of having members of mixed nationalities for developing local talents and greater output. See Programme of Events of 1 st International Conference on Islamic Banking and Finance organized by Bayero University Kano-Nigeria, between 17 th -19 th April, 2014 with a Theme: Islamic Banking and Finance: A Leap from Theory to Practice P.9. 46 Principle 1.1/17 of IFSB-10 Guiding Principles on Shari ah Governance System for IIFS. 47 The ACEs of Jaiz bank and Starling bank are chaired by foreign nationals but Stanbic IBTC ACE is constituted by Nigerians. FRACE has two foreign nationals of Sudan and Malaysia as members, sourced from an interview with some ACE and FRACE members, see also www.nigeriaintel.com accessed on 1 st May 2013. 228
be entrusted. Scholars of each generation must contribute toward the education and training of the next generation so that their trainees and students become the stewards of the discipline. 48 Therefore, two classes of experts are to be appointed to constitute the Council or Committee of Experts where the less experienced ones to be trained and mentored by the more qualified ones through the system of mentoring and stewardship over a period of time. The problem with this system is that it is not a system that could be designed to train experts from the scratch; however it is a system that trains the less experienced to a higher level of expertise in Islamic finance. Continuing education and development should be designed for the experts to be abreast and up-to-date with the reality and economic dynamism of the industry for the experts to be able to give appropriate expert opinion at all times. 6. Conclusion Indeed majority of the appointees to various bodies of experts, looking at the CBN requirement, may be qualified to be so labelled as Shari ah Scholars. The training they undergo is a training that acquaints one with Shari ah expertise. However, modern Islamic finance is an islamisation of the products and services of conventional finance, accordingly, for one to be so appointed as an expert need to posses the dual training of Islamic and conventional finance. Short of that will be inimical to the expected bench mark and may lead to opinions without appreciation of the scenario on ground. Therefore, there is need for change in the approach; the requirement and qualification for experts should make it as a must that the candidate must have expertise in both Islamic and conventional finances or in the alternative a provision for training candidates biased in Shari ah or conventional finance for a certain period prior to their appointment as experts. It was argued that the manpower challenge cannot be fixed overnight. The challenge calls for a global infrastructure to fill the gap, the seriousness of this issue is exemplified in the recent initiative by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) to set a new standard for Shari ah scholars. The CBN and Jaiz bank have adopted a stewardship mechanism by appointing expatriate and some members of foreign nationals to train Nigerians. This article further recommends the following as a solution to the challenge of Shari ah Talents in the industry; Islamic Finance Standard Setting Institutions, such as IFSB, should emulate AAOIFI by introducing certain scheme as a bench mark for Shari ah Scholars. More University Doctorate System relevant to Islamic finance should be introduced to alleviate the scarce of the talents as well as structured mentoring and stewardship in Shari ah training. 48 229