SHARIAH SCREENING OF COMPANIES IN NIGERIA: LESSONS FROM OTHER JURISDICTIONS

This paper analyses criteria that can be used to screen Shariah compliant status of companies.There have been numerous studies on the need to adopt certain screening methodologies as well as call for new methods in screening companies for Shariah compliance to suit the investment needs of Muslims in other jurisdictions.It is however unclear how suitable these methodologies will be to Nigeria.This paper therefore seeks to address this gap to consider an appropriate screening methodology to be employed in Nigeria drawing from the experience of other jurisdictions.This study employs a triangulation of both quantitative and qualitative methods to analyse the need for Shari'ah screening of companies in Nigeria.The qualitative method is used by way of ijtihad through the application of principles of Maqasid Al-Shari'ah and Qawaid Al-Fiqhiyyah to analyse the activities of companies to ensure that they are Shari'ah compliant.In addition, using the quantitative data gathered from the interview survey, the perspective of the investors about the need for Shari'ah screening of companies in Nigeria is further analysed.The result of the study shows that there is a lack of awareness from the Muslim population in Nigeria on the need for Shari'ah screening of companies in Nigeria.The result further shows that there is the need to take into cognizance the peculiar nature of business activities in Nigeria before any particular Shari'ah screening methodology and necessary benchmarks will be adopted.The study concludes that there is a need to ensure that the Muslims in Nigeria screen companies for Shari'ah compliance so that they can easily identify Shariah compliant companies for investment purposes.The paper, therefore, recommends that business regulators in Nigeria need to come up with a screening methodology that will suit the peculiar nature of companies in Nigeria.