Nigeria out of $2.3tr market for lack of Halal certification agency

Muhammad Zubair Mughal is the Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics (CIBE), Islamic Microfinance Network (IMFN) and Halal Research Council. He has been serving the Islamic banking and finance industry for over 10 years. He was recently in Abuja, Nigeria, to set up a Halal certification agency in collaboration with Jaiz Foundation. Daily Trust Business Editor, Hamisu Muhammad, interacted with him on his mission and other issues related to the Halal industry. Read excerpt:

What is AlHuda Centre of Islamic Banking and Economics all about?

AlHuda Centre for Islamic Banking and Economics, is working globally on Halal certification, education, trainings and publications in order to create awareness of the Halal industry in Muslim and non-Muslim communities evenly. We have our headquarters in Dubai but our services are available in different countries including Africa, Europe, America, Far East and Asia. The centre in Pakistan has a dedicated company with the name Halal Research Council, which provides advisory services, consulting and capacity building to different parts of the world. We believe that Halal certification will bring a very good role to providing hygienic and Halal foods to about 1.8 billion Muslim consumers around the world.

At the centre we provide different services such as advisory services to government, Halal services agencies and food manufacturing companies on how they produce Halal foods and then we provide certification for them. We also provide advisory and consultancy services for non-food items. For example, Halal Banking and Finance Services, Halal Tourism – on how to attract Muslim tourists to countries – and we have online dedicated programme that provides Halal and interest free products for one year.

In the international market, we are working with different stakeholders to provide them with technical assistance to provide Halal food certifications and Halal food management etc.

I am very much happy here in Nigeria, such a very big country, with about 200 million population among them about 50 percent Muslims. There is huge need for Halal certification. Unfortunately, right now, there is no proper Halal certification agency working in Nigeria, therefore we are compromising this huge number of Muslims on their religious rights.

Why are you here in Nigeria?

While addressing to the audience, Amb. Adamu Babangida Ibrahim, Director General/CEO Jaiz Charity & Development Foundation said, The need for the establishment of a Halal Certification Agency in Nigeria has been felt since a long while and it is pleasure for us to start this new journey in co-ordination with Halal Research Council.

We are partnering with Jaiz Foundation on Halal Certification to establish the first Halal certification agency in Nigeria. With this partnership, Nigeria will be benefiting in four key areas. Number one; more than 100 million Muslim will find the halal foods from a properly certified agency. The government of Nigeria will be exposed to other markets in the Muslim countries. Right now, Nigeria doesn’t have big volume export to Muslim countries because most of the food items produced here are not Halal certified and one of the major conditions for the market in those Muslim countries is that they will not import any product which is not Halal. So, the Nigerian companies will have a proper Halal certificate so that they can export to the Middle East, Malaysia, Pakistan, Indonesia and the rest. The third is that Nigeria will enter into the Islamic economic system. There are different components of the Islamic economic system; there is Islamic finance, Islamic banking, insurance and the major component in the system is the Halal among others. So Nigeria will enter into a trillion dollar size market. Right now the total size of the market is $2.3 trillion, if Nigeria will take two to three percent share of this figure, it will be up to a billion dollars.

I appreciate the vision of the Nigerian government to promote agriculture but in doing so, they need to promote the agric sector with Halal certification so that they will find a very big market. Halal has link with diary and livestock products, vegetables and fruits; there is also link with the raw materials which have been used to produce other Halal food products. So by having Halal concept, it will boost agricultural activities as well.

What is the procedure of Halal certification in other countries? Is it done by government agencies or the private sector? 

Most of them are private initiatives. About 90 percent belong to private industry. But government accredits them and will regulate the Halal certification agencies. In your own case, you have the Nigeria National Accreditation Services.

How is the partnership with Jai’z Foundation going to work?

The Halal Research Center will provide technical assistance to establish the Halal certification agency in Nigeria. It will be for the Nigerian market, and other African markets as well and later we will widen the scope to become the Halal certification agency for West African countries. We provide the technical assistance in designing the concept, the processes of how to conduct audit of the Halal products in the food and non-food industry. Our centre will provide capacity building for that team.

What exactly will be the role of the proposed agency?

We will be providing certification on Halal products. After evaluating their systems: there are different standards of labeling in the world. We will be utilizing international standards, especially OIC (Organization for Islamic Cooperation) standards. We have to follow those standards to certify food and non-food items in Nigeria.

Our long term vision is that we can provide support to the government to design import laws, to identify what is being imported into the country is either Halal or Haram.  Because a lot of ingredients used in such imported products are not Halal. For instance, Gluten is a very popular ingredient in the food industry; it’s from the bones of animals. Gluten is being utilized in the confectionary industry, diary, bakery and in almost all packaged food items, and if that Gluten is haram, and it is used in producing food items, it automatically contaminates such products and a lot of them are imported into this country.

Do we already have products with Halal label on them, but which are not?

What I observed in Nigeria is that the country has no labeling law. In many countries, they have labeling laws, but here if anybody wants to manufacture something, he/she will just stamp Halal without any certification; that is one of the issues. For the market, I do not want to make any categorical statement but you need to do a lot of things to have Halal foods and products for the Nigerian Muslims.

In the financial sector, how do you view the progress Nigeria is making in the Islamic financial products market, especially vis-a-vis the awareness issue?

Awareness will take a lot of time. For example, I come from Pakistan where we have about 98 to 99 percent Muslim population but even with that in the country, we don’t have full awareness of Islamic finance. The total size of Islamic banking in the financial sector is just about 17 percent, still about 83 percent of the public utilizes conventional banking products because they do not have awareness.

Awareness will take time. But what I will recommend is that you have to start awareness from the scratch; from the masses. You have to include some chapters of Islamic banking and finance or non-interest banking in your education syllabus in schools so that pupils will learn about what is Islamic banking from the basics. You think by organizing conferences or workshops you will create awareness? Not at all! Awareness should be from the grassroots, so that they can understand.

We also need to present Islamic banking and insurance as a solution for all not only Muslims. Islamic banking products should be banking products not religious products. If you link it with religion, you will divide the society; Islamic finance is a solution for all but for Muslim, it’s an extra benefit that it’s in line with their Shari’a but for non-Muslims, it’s a banking product. So it is a solution for all, not for a specific segment of religion. This is a recommendation for all.

The second recommendation is for the Halal industry. In Nigeria Alhamdullahi, I am very much happy to see that you people have very much Shari’a knowledge; you have very good Shari’a scholars and on the other hand, you also have very good bankers, food technologists among others. But unfortunately, Shari’a people don’t know what banking is all about and the bankers don’t know what Shari’a is all about. So we need to bridge that gap so that we can produce competent people who can lead the Islamic banking and finance industry.

I am very much optimistic that Nigeria has very big future for Islamic finance. Yes, they are going slowly, slowly but they are on very good track. Now you have full-fledged Islamic banking, you have been very patient, you have more than five Islamic micro finance banks and you have two full-fledged Takaful companies and you have Islamic capital market where some states issue Sukuk and the Jaiz Bank has recently enlisted on the stock  market. So you have complete component of Halal industry but one thing that is missing is the Halal certification, so insha’llah ta ala, Jaiz Foundation will fulfill this part by becoming the first Halal certification agency in the country.

 

ARTICLE TWO

Halal Research Council will provide Technical expertise to Establish First Halal Certification Agency in Nigeria.

According to the agreement, a pioneer Halal Certificate Company will be established in Nigeria as per Int’l standards.

Abuja (Press Release): For the establishment of First Halal Certification Agency in Nigeria, Halal Research Council will provide Technical Expertise, Capacity building, Training, System and other Recourses that will promote and expand Halal Industry in the country. In this case Mr. Muhammad Zubair Mughal, CEO of Halal Research Council has signed an agreement at Abuja, Nigeria. As per the Agreement, the establishment of the company requires a period of the 3 months including entire Certification Procedures, Audit System, Standard Operating Procedures (SOPs), Manuals, different Forms, Halal Testing Labs, Business Plan, Training as well as Co-ordination with International Institutions. Halal Research Council will be Shareholder of this Institution as well.

While addressing on the event, Mr. Muhammad Zubair said, “It is an honor for Halal Research Council to provide its services for the establishment of the First Halal Certification Agency in Nigeria that will result an availability of Halal Products in the country. The establishment of Halal Industry will increase the exports of the country. This will gain expansion in Halal Tourism as well as attain Foreign Direct Investment from Nigeria Muslim World.” He said: “Nigeria has a very strong Agricultural Industry and vast resources of manpower that can further expand the Halal Industry.”

While addressing to the audience, Amb. Adamu Babangida Ibrahim, Director General/CEO Jaiz Charity & Development Foundation said, The need for the establishment of a Halal Certification Agency in Nigeria has been felt since a long while and it is pleasure for us to start this new journey in co-ordination with Halal Research Council.

Halal Research Council is a Pakistan-based institution that has been providing Research, Training and Awareness services on the topic of Halal since last 10 years. For further details please visit our website; www.halalrc.org