Exploring the potential of Islamic banking in Ghana: A systematic literature review

Over the past decades, Islamic banking has emerged as a viable alternative to conventional banking, gaining recognition in both Muslim-majority and non-Muslim countries. continues to face persistent challenges including liquidity pressures, rising non-performing loans, fiscal instability and regulatory concerns that constrain credit expansion, weaken investor confidence and impede sectoral growth. These systemic weaknesses have prompted policymakers and financial institutions to consider Islamic finance as a complementary model to strengthen the country's financial architecture. This study therefore explores the potential adoption of Islamic banking in Ghana and identifies its opportunities, challenges and relevant policy considerations. A systematic literature review was undertaken using a content analysis approach. Out of seventy-five (75) initial publications, thirty (30) were selected based on methodological rigor and thematic relevance. Findings indicate that Islamic banking could enhance financial inclusion, provide alternative financing mechanisms, support economic growth, attract foreign direct investment, promote infrastructure development and contribute to a more diversified financial market. However, barriers such as limited public awareness, regulatory gaps, misconceptions about Islamic financial principles, competition from conventional banks and inadequate professional expertise may hinder its successful adoption. The study also recommends that, if implemented, Islamic banking should be strategically aligned with Ghana's macroeconomic and fiscal objectives. Specifically, it should be leveraged to finance large-scale infrastructure projects including roads, industrial facilities, agricultural ventures, housing and other capital-intensive initiatives, thereby complementing fiscal policy and supporting long term national development.