Establishing the Relationship between Islamic Finance and Political Stability of Nigeria

Abstract

This study examines the dynamic relationship between Islamic finance and political stability in Nigeria, analysing how one influences the other. Using a mixed-method approach, the research demonstrates that Islamic finance contributes positively to political stability by fostering financial inclusion, reducing poverty, and driving economic growth. However, persistent political instability and weak governance structures significantly hinder the advancement of Islamic finance in Nigeria. The study also highlights the critical role of political factors, such as government support, robust regulatory frameworks, and strict adherence to Shari’ah principles in the sustainable growth of Islamic finance. Findings show that Islamic finance rooted in principles of social justice, equality, and fairness, has the potential to serve as a catalyst for political stability. To realize these benefits, the paper recommends that Nigerian policy makers and regulators prioritize the development of Islamic financial services. It also recommends the  Strengthening of governance and the integration of Islamic financial products into the broader economy to enhance financial inclusion, alleviate poverty, and secure both economic and political stability.