AIFF 2026: Being a Shaykh Alone Does Not Qualify One as an Islamic Finance Expert – Prof. Alaro
By Fatih Lawal-Garu
Professor of Law at the University of Ilorin and a member of the Financial Regulation Advisory Council of Experts (FRACE) of the Central Bank of Nigeria (CBN), Professor Abdurrasaq Abdulmajeed Alaro, has said being a Shaykh or Shari’ah scholar alone does not qualify anyone to speak authoritatively on Islamic banking and finance, warning that uninformed religious pronouncements have widened the trust deficit in Nigeria’s Islamic finance industry.
The warning comes at a time when Islamic finance is expanding rapidly across the world. According to the 2024 Islamic Finance Development Report published by ICD-LSEG, global Islamic finance assets stood at about $4.93 trillion in 2023 and are projected to rise to $7.5 trillion by 2028.
In Nigeria, available industry estimates place the Islamic finance market at between N4 trillion and N5 trillion, combining non-interest banking, sovereign Sukuk, Takaful and Islamic investment funds, while the Federal Government’s Sukuk programme has surpassed N1 trillion in cumulative issuances. Against this backdrop of rapid industry growth, Alaro warned that misinformation from within the scholarly community poses a significant threat to public confidence in the sector.
Speaking during a panel discussion at the second Arewa Islamic Finance Forum (AIFF) 2026 in Kano, Prof. Alaro said one of the biggest challenges confronting the country’s Islamic finance ecosystem is a widening trust gap, particularly among scholars whose public pronouncements influence public perception of Islamic banking and finance.
The two-day forum, held on July 18 and 19, 2026, at the Amani Events Centre, Kano, brought together key stakeholders from across Nigeria’s Islamic finance industry. Participants included regulators, policymakers, academics, Sharia scholars and practitioners from Islamic banking, Takaful (Islamic insurance), Islamic pensions, the Islamic capital market and non-interest financial institutions to deliberate on strategies for deepening ethical finance, strengthening governance and expanding financial inclusion through Islamic finance.
Prof. Alaro said the trust deficit remains one of the most pressing challenges facing the industry.
“We have a big problem at hand. And this, for me, is a big problem. And this is what is creating that trust gap that we have,” he said.
The legal scholar attributed the trust deficit to two categories of scholars — those with what he described as “genuine” concerns about Islamic banking and those he personally termed “malicious.”
According to him, the first category comprises scholars who sincerely believe that banking, by its very nature, can never be halal, making their opposition to Islamic banking a matter of genuine conviction rather than deliberate misinformation.
To illustrate the point, Alaro recalled attending a conference organised by the Islamic Development Bank (IsDB) and hosted by the Central Bank of Sudan in Khartoum in 2010, where one of the pioneers of the Islamic banking industry narrated the resistance the sector encountered in its early years.
He said one prominent scholar at the time openly discouraged people from supporting Islamic banking, insisting that its promoters were, in the scholar’s words, “looking for Khinzirun Halal (halal pork)”—a statement Alaro said reflected a genuine theological conviction rather than deliberate mischief.
Alaro explained that similar perceptions still exist among some Nigerian scholars.
“We have a class of Nigerian scholars that have that genuine concern. They do not believe a banking system could be halal. Banking to them is inherently, intrinsically haram. There’s no way you can practise banking that could be halal.”
Drawing from another personal experience as a student in Madinah in the 1990s, Alaro narrated how a visiting Nigerian scholar from Lagos changed his long-held perception after seeing a hotel located a few metres from the Prophet’s Mosque bearing the name Funduqul Haram (Al-Haram Hotel).
According to him, the scholar had always believed that every hotel was associated with immoral activities until the encounter challenged his assumptions.
He said such scholars require engagement rather than condemnation.
“We can sit with them. We can have a roundtable discussion with this category of scholars and let them realise this is what is happening all over the world, that banking is a system. Financial intermediation can be done in a halal way, and it can also be done in a haram way.”
However, Prof. Alaro reserved his strongest criticism for another category of scholars which he personally described as “malicious,” arguing that some make authoritative pronouncements on Islamic finance despite lacking the specialised expertise required in the discipline.
“The malicious one — and it’s also unfortunate. Because you are a scholar, you are a Sharia expert, with due respect, that does not necessarily qualify you to be an Islamic finance expert. We must call a spade a spade.
“You are a scholar, yes. You are a Shaykh, yes. But that does not necessarily make you an expert in Islamic banking and finance.”
According to him, several respected clerics have issued what he described as “unguided” and “uninformed” opinions on Islamic banking operations without adequate knowledge of Islamic finance, thereby misleading the public and undermining confidence in the industry.
“We have seen our colleagues, we have seen our sheikhs, our senior sheikhs, making unguided, uninformed pronouncements about operations of Islamic banking and finance that are not evidence-based, that are not supported by any evidence. And this is creating confusion.”
Prof. Alaro argued that Islamic banking and finance has evolved into a specialised discipline requiring expertise in both Islamic commercial jurisprudence and modern financial systems to ensure accurate religious guidance and public confidence.
Sukuk are Sharia-compliant investment certificates, often described as the Islamic alternative to conventional bonds, and have become one of Nigeria’s flagship Islamic finance instruments for funding infrastructure projects.
As an example, Alaro cited the controversy surrounding Nigeria’s first Federal Government Sukuk, which he said one scholar publicly declared haram simply because it offered a predetermined rate of return.
According to him, the scholar assumed that anything with a predetermined return could not comply with Islamic law.
He explained that under Islamic commercial jurisprudence, predetermined returns are prohibited only in equity-based contracts such as musharakah and mudarabah, where profits depend on the actual performance of a venture.
However, he noted that predetermined returns are permissible in sale-based and lease-based (ijarah) contracts and remain fully compliant with Sharia principles.
“Those ones, we just have to engage them. We just have to engage them in an academic way to let them realise that what they are saying is wrong.”
Alaro also underscored the importance of Sharia governance, describing it as the lifeline of Islamic finance. According to him, removing Sharia governance from Islamic financial institutions would erase the distinction between Islamic and conventional finance. He argued that responsibility for ensuring Sharia compliance rests not only with Sharia scholars but also with boards of directors, bank executives and shareholders, calling for greater collaboration among all stakeholders to preserve the integrity of the industry.
Prof. Alaro stressed that addressing the trust deficit requires sustained dialogue between scholars, regulators and practitioners, as well as greater public education on the principles governing Islamic finance.
He maintained that expertise in Islamic finance demands not only sound knowledge of Sharia but also a firm understanding of modern financial systems and Islamic commercial jurisprudence.
“The truth of the matter is that you have come to a unique market. The two principles are money and religion. If you want a market where the only player is money, there are conventional licences for that. But when you come to this unique market, you must see both.”
He urged both scholars and practitioners to appreciate the relationship between Shari’ah principles and commercial realities, concluding:
“When we look at Shari’ah, we shouldn’t close our eyes to business realities.”
Earlier, in his welcome address, Convener of AIFF and Managing Director of Ifing Media Limited, Mudathir Adesanya, said the forum was established to move Islamic finance “from conversation to practical adoption” by bringing together regulators, financial institutions, investors, scholars, policymakers and entrepreneurs. He said the initiative seeks to bridge knowledge gaps, strengthen public confidence and accelerate the responsible adoption of Islamic finance as a tool for financial inclusion and economic development.
“Our goal is not simply to promote Islamic finance because it is Islamic. We want to demonstrate that its principles and instruments can provide practical solutions to real economic problems,” Adesanya said.
He added that AIFF aims to deepen awareness of Shariah-compliant financial solutions across sectors while fostering partnerships capable of expanding access to ethical financing. Stressing that education remains central to the forum’s mission, he said: “Awareness must lead to understanding. Understanding must lead to trust. Trust must lead to adoption. And adoption must ultimately lead to measurable economic impact.”