Who Will Interpret the Rules? Bright Simons Warns of Legal Gaps in Ghana’s Non-Interest Banking Push

 

As the Bank of Ghana (BoG) moves to introduce draft guidelines for what it terms “non-interest banking,” policy analyst and innovation expert Bright Simons is urging regulators and the public to confront a more fundamental question: is Ghana institutionally prepared for a banking system that, in practice, is deeply rooted in Islamic law?

In a detailed set of observations shared on social media, Simons argues that while the BoG’s attempt to rebrand Islamic Banking as “non-interest banking” may be aimed at avoiding religious controversy, it risks obscuring the technical and legal realities underpinning the model.

“At the core, this is Islamic Banking,” Simons notes, stressing that profit-and-risk sharing, ethical investment screens, and restrictions on speculative instruments are not merely financial design choices but are derived from Shariah jurisprudence. “Without the Islamic underpinning, ‘non-interest banking’ is hollow.”

Expertise Is Not Optional

One of Simons’ central concerns is the level of specialized expertise required to operate and regulate such banks. Unlike conventional banking, Shariah-compliant finance demands continuous interpretation of Islamic legal principles to determine what qualifies as a permissible “real asset,” how profit-sharing structures are designed, and whether products comply with ethical restrictions.

“This is not something that can be improvised,” Simons argues. “Experts in Islamic law are required.”

While some Ghanaian professionals are reportedly already pursuing certification in Islamic finance, Simons cautions that isolated expertise will not be enough. Banks, regulators, auditors, and compliance officers would all need access to qualified Shariah scholars to avoid costly errors and reputational risks.

Legal and Judicial Gaps

Perhaps the most far-reaching concern raised by Simons relates to dispute resolution and the judiciary. Even though the BoG guidelines emphasize alternative dispute resolution mechanisms, Simons questions what happens when disagreements inevitably escalate.

“How many judges are being trained in Shariah-compliant finance?” he asks. “What about even arbitrators?”

In any serious dispute, adjudicators would need to interpret Shariah principles embedded in contracts and governance frameworks. Without judicial capacity in this area, legal uncertainty could undermine confidence in the entire system, discouraging both domestic and foreign participation.

Why the Rebrand Falls Short

Simons is particularly skeptical of the decision to label the framework “non-interest banking.” In his view, the BoG’s own draft guidelines concede the reality they seek to soften, explicitly stating that licensees “must accept the ethical restrictions underscored by Islamic values.”

“If ethical restrictions derived from Islamic values are explicit,” he argues, “did we need then to rebrand it as ‘non-interest banking’?”

He suggests that avoiding the term “Islamic Banking” may create confusion rather than clarity, especially for investors, courts, and regulators who will ultimately have to engage with Shariah concepts regardless of terminology.

Lessons from Past and Abroad

Simons also situates Ghana’s efforts within a broader historical and international context. He points to past domestic attempts, including Makkah Bank and Salam Capital, whose licences were withdrawn, as reminders that this journey did not begin today — and that missteps can be costly.

Internationally, he notes that countries with longer experience in Islamic finance had to adjust laws, tax regimes, and regulatory frameworks to support the model. In some cases, failures were linked to poor operational practices and Shariah non-compliance, reinforcing the need for robust institutional preparation.

Policy Before Branding

For Simons, the core issue is sequencing. Policy, legal capacity, and technical expertise must come before branding exercises.

“Legal rules must follow policy,” he argues, warning that without deliberate investment in human capital, judicial training, and regulatory infrastructure, Ghana risks introducing a system that looks innovative on paper but struggles in practice.

As the Bank of Ghana reviews feedback on its draft guidelines, Simons’ critique sharpens the debate: the challenge is not whether Ghana should explore Islamic Banking, but whether it is willing to do so transparently, deliberately, and with the depth of institutional reform the model demands.