Role of Islamic Law in the Efficient Management of Debt in Nigeria

Aishat Abdul-Qadir Zubair, Ahmed Abiodun Muhammed-Mikaaeel


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.

Paper Type: Research Article


Economic Crisis; Islamic Law; Debt Profile; Efficient Management, Nigeria

Full Text:



Adamu, M. M. (2020). Economic Development amidst Oil Shocks and Budget Deficits: Analyzing Nigeria’s External Debt Structure. Kaduna Journal of Humanities, 4(1).

Adegboyega, R. R. (2021). Debt Service Payments and Economic Growth in Nigeria. Journal of Business, 10(2).

Adekunle, S. S., & Masih, M. (2017). Assessing the Viability of Sukuk for

Portfolio Diversification using MS-DCC-GARCH. MPRA Paper No. 79443.

Alloh, F. T., & Regmi, P. R. (2017). Effect of Economic and Security Challenges

on The Nigerian Health Sector. African Health Sciences, 17(2), 591.

Anachedo, C. K., Echekoba, F. N., Egbunike, F. C., & Ubesie, C. M. (2021). Lessons and Policy Implications of Nigeria’s Economic Recession: 2016-2017. Journal of Contemporary Issues in Accounting, 2(1), 65-77.

Aslam, M., & Jaafar, R. (2020). Budget Deficit and the Federal Government Debt in Malaysia. In Perspectives on Economic Development - Public Policy, Culture, and Economic Development. IntechOpen. 10.5772/intechopen.91457

Bala, S. A., Kaoje, N. A., & Olarewaju, B. T. (2022). SUKUK as a Viable Option Instrument of Financing Infrastructural Development in Nigeria 63. Gusau International Journal of Management and Social Sciences, 5(2).

Bukhari, S. (n.d). Sahih Bukhari: Book of "Loans, Bankruptcy", Vol. 3, BOOK 41, No. 581. Sahih-Bukhari. Retrieved December 26, 2023, from

Chidubem, B. C. (2023). Impact of Public Debt on Growth of the Nigeria Economy.

Daud, S. N. M. (2016). The Real Effect of Government Debt: Evidence from the Malaysian Economy. Journal of Economic Cooperation and Development, 37(3), 57-86.

Ebrahim, M. S., & Sheikh, M. (2016). Debt Instruments in Islamic Finance: A Critique. Arab Law Quarterly, 30(2), 185-198.

Ekong, C. N., Effiong, U., Ekong, C. N., Effiong, U. E., & Inyang, N. F. (2021). Public Debt and the Real Sector of the Nigerian Economy. International Journal of Economics, Commerce and Management, IX(7).

Fasoye, K. (2018). Nigeria’s Domestic Debt Profile (1980-2017). Historical Research Letter, 47. 9-13.

Gylych, J., Ahmad Jibrin, A., Celik, B., & Isik, A. (2020). Impact of Oil Price Fluctuation on the Economy of Nigeria, the Core Analysis for Energy Producing Countries. In Global Trade in the Emerging Business Environment. IntechOpen.

Halaskova, M., Gavurova, B., & Kocisova, K. (2020). Research and Development Efficiency in Public and Private Sectors: An Empirical Analysis of EU Countries by Using DEA Methodology. Sustainability (Switzerland), 12(17).

Hassan, H., & Masih, M. (2017). Public Debt and GDP Growth in The Malaysian

Islamic Economy. MPRA Paper No. 107999.

Henry, J. T., Hope, E., & Ali Hamisu. (2022). IJBMASE_22010201 (1).

Hulsewig, O., & Steinbach, A. (2021). Monetary Financing and Fiscal

Discipline. International Review of Law and Economics, 68, 106004.

Hussain, H. I., Shamsudin, M. F., Anwar, N. A. M., Salem, M. A., & Jabarullah, N. H.

(2018). The Impact of Sharia Compliance on the Adjustment to Target Debt Maturity of Malaysian Firms. European Research Studies Journal, XXI(2).

Ideh, T. O., & Uzonwanne, M. C. (2021). Impact of External Debt on Economic Growth in Nigeria. European Journal of Economic and Financial Research, 5(2).

Ilemona, A., & Nwite, S. (2021). Public Debt Burden and Issues of Economic Growth in Nigeria: Are there Solutions? Accounting & Taxation Review, 5(2).

Inyang, N., & Effiong, U. (2020). Nigeria"s Public External Debt and Economic Growth: Reconsidering the Empirics. World Journal of Innovative Research, 9(3).

Jiang, W., Sargent, T. J., Wang, N., & Yang, J. (2022). A P Theory of Government

Debt and Taxes. Nber Working Paper Series Number 29931.

Kareem, I. A. A., Mahmud, Mohd. S. Bin, & Ganiyy, A. F. A. (2020). Thematic Review of Sukuk Ijarah Issued in Nigeria: An Opportunity for Economic Development. Jurnal Iqtisaduna, 1(1), 61.

Kazak, H., & Alim, H. B. (2022). Qard Al-Hassan Model as an Institutionalised

Method of Islamic Finance. Islamiyyat, 44(1), 203-220.

Kur, K. K., Abugwu, C. O., Abbah, C. S., & Anyanwu, O. (2021). Public Debt and Economic Growth: What We Know Today about The Nigerian Economy Tomorrow.

African Social Science and Humanities Journal, 2(4), 192-206.

Malati, F., Radiany, M. A., Harjanti, W., Farhan, A., & Puspitasari, E. (2021). Debt in a Business and Islamic Perspective. International Journal of Scientific and Research Publications, 11(10).

Mawardi, I., Widiastuti, T., Anova, D. F., Al Mustofa, M. U., Ardiantono, D. S., & Insani, T. D. (2019). Public Debt as a Source of Financing for Government Expenditures in the Perspective of Islamic Scholars. Humanities & Social Sciences Reviews, 7(4), 285-290.

Morris, R., Ozigbu, J.C., & Ezekwe, C.I. (2018). External Debt and Inclusive Growth in Nigeria. 8(7).

Nwamaka, I. M., Chukwunulu, I. J., & Werigbelegha, A. P. (2016). Domestic Debt and the Performance of Nigerian Economy (1987-2014): An Empirical Investigation. European Journal of Research and Reflection in Management Sciences, 4(3).

Okoye, E. I., Ikechuku, O., Ndum, M., & Blessing, N. (2016). Nigerian Fiscal Federalism: Economic Growth and Public Debt Management Paradigm. Chapter 42 in Managing Diversification for Sustainable Development in Sub-Saharan Africa: Proceedings of 2016 International Conference of the Faculty of Management Sciences, Nnamdi Azikiwe University, Awka, 8th-10th November, 2016, Available at SSRN:

Onyele, K.O. & Nwokoacha, E.B. (2016). Sources of Funds and Economic Prosperity: The Nigerian Case. Journal of Business and Financial Affairs, 5(4).

Organisation of Economic Cooperation for Development (2017). Enhancing The Contributions of SMES in a Global and Digital Economy. Retrieved from

Oti, P. A., Odigbo, B. E., & Odey, F. I. (2016). Nigeria’s Debt Burden and Development Tangle: The Socio-Economic and Political Implications. Journal of Economics and Sustainable Development, 7(20).

Pieloch-Babiarz, A., Misztal, A., & Kowalska, M. (2021). An Impact of Macroeconomic Stabilization on the Sustainable Development of Manufacturing Enterprises: The Case of Central and Eastern European Countries. Environment, Development and Sustainability, 23(6), 8669-8698.

Rafindadi, A. A., & Musa, A. (2019). International Journal of Economics and Financial Issues an Empirical Analysis of the Impact of Public Debt Management Strategies on Nigeria’s Debt Profile. International Journal of Economics and Financial Issues, 9(2), 125–137.

Shaikh, S. (2014). Islam and Human Development. MPRA Paper No. 53800.

Tawfik, O. I., & Elmaasrawy, H. E. (2023). Effect of Shariah Compliance on Financing Decisions: Empirical Evidence from GCC. Journal of Islamic Accounting and Business Research.

Uddin, M. (2017). Inheritance of Hermaphrodite (Khuntha) under the

Muslim Law: An Overview. Beijing Law Review, 08(02), 226–237.

Victoria, O. I., Mbadike, N. S., & Ikechi, K. S. (2021). Nigeria’s Domestic Public Debts and Economic Development. The International Journal of Management Science and Business Administration, 7(5), 7 22.

Vincent, H., Mairafi, L. S., & Abdul H. Zainab. (2021). Domestic Debt Servicing, Inflation rate and Domestic Debt Stock in Nigeria: An Empirical Analysis. Social and Administrative Sciences Review, 7(1), 209-227.

Yusuf, A., & Mohd, S. (2021). The impact of government debt on economic growth in Nigeria. Cogent Economics & Finance, 9(1).



  • There are currently no refbacks.

Copyright (c) 2023 Jurnal Hukum Novelty

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Jurnal Hukum Novelty

ISSN 1412-6834 (Print)

ISSN 2550-0090 (Online)

This journal is licensed under a Creative Commons Attribution 4.0 International License.

Jurnal Hukum Novelty Stats



Jurnal Hukum Novelty has been covered by the following indexing sites:




Jurnal Hukum Novelty is member of: