Role of Islamic Finance in Supporting Economic Recovery in Nigeria Post-Covid-19 Pandemic

Ibraheem Alani Abdulkareem, AbdulFattah AbdulGaniyy, Mohd Sadad Mahmud


Since the deadly infection pandemic episode toward the end of 2019, more than 200 countries have been impacted. One of the most significant impacts of the pandemic that is undeniable is the increase in the intensity of poverty around the world. It is a health sector crisis, and the virus is also causing an economic meltdown. Various nations fall into recession, and more people live beneath the poverty level. The pandemic is causing both health and economic crises. This study examines the potential of Islamic finance in supporting economic recovery in the post-Covid-19 pandemic. The method reviews previous studies, including journal articles, research papers, policy documents, and reports in related fields to support this study. Based on past studies, the study document that Islamic finance via Mudarabah, Sukuk, Musharakah, Qard al-Hasan, Sadaqat, waqf, and Islamic Microfinance has essential to support economic recovery in a post-Covid-19 pandemic in society. In particular, the study found that Islamic finance is positively associated with a reduction in the impact of the pandemic on the people and the whole world economy. The study has added to the body of knowledge by looking at the role of Islamic finance in terms of the effect of the Covid-19 pandemic on the economy and society. The study has implications for the financial institutions, policymakers, and government in terms of adopting Islamic finance products and principles to address the effect of the Covid-19 pandemic crisis on the economy, thereby improving the social well-being of the people and improving the global economy.


Nigeria; Covid-19 pandemic; economic recovery; Islamic finance


Abdal, A., & Ferreira, D. M. (2021). Deglobalization, globalization, and the pandemic: Current impasses of the capitalist world-economy. Journal of World-Systems Research, 27(1), 202-230.

AbdulGaniyy, A., AbdulKareem, I. A., & AbdulRaheem, A. (2021). Financing Entrepreneurship in Post-Covid-19 Era: the Islamic Banking and Finance Option. Journal of Islamic Economic and Business Research, 1(2), 193-201.

AbdulKareem, I. A., & Mahmud, M. S. B. (2019). Infrastructure Project Financing Through Sukuk as an Alternative to Conventional Bond Financing. Journal of management and operation research, 1(19), 1-11.

AbdulKareem, I. A., AbdulGaniyy, A., Mahmud, M. S., & Yazid, A. S. (2020). Alternative Way to Reducing Poverty and Inequality in Nigeria from Islamic Perspective. Journal of Islamic Banking and Finance, 37(2), 73-83.

Adnan, A. (2020). Nigeria ramps up response efforts to smash coronavirus. Retrieved from coronavirus/1771922

Adzimatinur, F., & Manalu, V. G. (2021). The Effect of Islamic Financial Inclusion on Economic Growth: A Case Study of Islamic Banking in Indonesia. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 4(1), 976-985.

Ajibo, H. (2020). Effect of Covid-19 on Nigerian Socio-economic Well-being, Health Sector Pandemic Preparedness and the Role of Nigerian Social Workers in the War Against Covid-19. Social Work in Public Health, 35(7), 511-522, DOI: 10.1080/19371918.2020.1806168

Alozie, C. E., Ideh, A. O., & Ifelunini, I. (2020). Coronavirus (COVID-19) pandemic, economic consequences and strategies for ameliorting macroeconomic shocks in Nigeria’s economy. Economic Consequences and Strategies for Ameliorting Macroeconomic Shocks in Nigeria’s Economy (September 21, 2020).

Anyanwu, J. C., & Salami, A. O. (2021). The impact of COVID‐19 on African economies: An introduction. African Development Review, 33(Suppl 1), S1.

Arimoro, A. E. (2019). Persons with Intellectual Disability and Access to Justice in Nigeria: Challenges and the Way Forward. Hasanuddin Law Review, 5(2): 180-198 DOI: 10.20956/halrev.v5i2.1561

Asagunla, T. M., & Agbede, M. O. (2018). Oil revenue and output growth in Nigeria. International Journal of Economics and Business Management, 4(6), 65-74.

Ashraf, M. A. (2021). Overcoming the Economic Crisis due to a Pandemic through Islamic Finance. Journal of Islamic Economics Lariba, 6(1), 77-91.

Ayub, M. (2020). Islamic Financial Institutions Financing the Terrorism? Regulators Role in Evidencing it a Fallacy. Journal of Islamic Business and Management, 10(2), 278-283.

Barbieri, T., Basso, G., & Scicchitano, S. (2022). Italian workers at risk during the Covid-19 epidemic. Italian Economic Journal, 8(1), 175-195.

Bedford, J., Enria, D., Giesecke, J., Heymann, D. L., Ihekweazu, C., Kobinger, G., ... & Wieler, L. H. (2020). COVID-19: towards controlling of a pandemic. The lancet, 395(10229), 1015-1018.

Ebuka, O. V., Chidiebere, A. H., & Vanessa, A. A. U. (2022). Impact of Covid-19 Pandemic on Government Capital Expenditure towards Construction and Maintenance of Educational Facilities in Enugu State, Nigeria. International Journal of Research and Innovation in Social Science (IJRISS) |Volume VI, Issue II, 352-356.

Ejiogu, A., Ejiogu, C., & Ambituuni, A. (2019). The dark side of transparency: Does the Nigeria extractive industries transparency initiative help or hinder accountability and corruption control?. The British Accounting Review, 51(5), 100811.

Ejiogu, A., Okechukwu, O. and Ejiogu, C. (2020). Nigerian budgetary response to the COVID-19 pandemic and its shrinking fiscal space: financial sustainability, employment, social inequality and business implications. Journal of Public Budgeting, Accounting & Financial Management. Vol. ahead-of-print No. ahead-of-print.

Ewang, A. (2021). " Between hunger and the virus": the impact of the Covid-19 pandemic on people living in poverty in Lagos, Nigeria. Retrieved on 13 April 2020 from

Fagbemi, F. (2021). COVID-19 and sustainable development goals (SDGs): An appraisal of the emanating effects in Nigeria. Research in Globalization, 3, 100047.

Farzanegan, M. R., Feizi, M., & Gholipour, H. F. (2020). Globalization and the Outbreak of COVID-19: An Empirical Analysis. Journal of Risk and Financial Management, 14(3), 1-10,

Hamed, M, M. (2020). The Role of Islamic Social Finance in Mitigating Humanitarian Crises. European Journal of Islamic Finance, (16).

Hassan, M. K., Rabbani, M. R., & Abdulla, Y. (2021). Socioeconomic Impact of COVID-19 in MENA region and the Role of Islamic Finance. International Journal of Islamic Economics and Finance (IJIEF), 4(1), 51-78.

Hassan, M. K., Rabbani, M. R., & Abdulla, Y. (2021). Socioeconomic Impact of COVID-19 in MENA region and the Role of Islamic Finance. International Journal of Islamic Economics and Finance (IJIEF), 4(1), 51-78.

Hassan, M. K., Rabbani, M. R., & Ali, M. A. (2020). Challenges for the Islamic Finance and banking in post COVID era and the role of Fintech. Journal of Economic Cooperation and Development, 43(3).

Hassan, M. K., Rabbani, M. R., & Ali, M. A. (2020). Challenges for the Islamic Finance and banking in post COVID era and the role of Fintech. Journal of Economic Cooperation and Development, 43(3).

Hydara, M. (2020). An Integrated Model of Waqf, Sadaqah and Takaful for Poverty Alleviation through Empowering Women Farmers in the rural Gambia. Journal of Islamic Finance, 9(2), 1-12.

Inegbedion, H. (2021). Impact of COVID-19 on economic growth in Nigeria: opinions and attitudes. Heliyon, 7(5), e06943.

Karabag, S. F. (2020). An unprecedented global crisis! the global, regional, national, political, economic and commercial impact of the coronavirus pandemic. Journal of Applied Economics and Business Research, 10(1), 1-6.

Kenny, S., Lennard, J., & Turner, J. D. (2021). The macroeconomic effects of banking crises: Evidence from the United Kingdom, 1750–1938. Explorations in Economic History, 79(101357), 1-18. 101357.

Khan, R. M. N., Shafique, O., Siddique, N., Razzaq, R., & Hafeez, r. M. Z. (2021a). A Qualitative Study on the Socio-Economic Impact of Participation in Akhuwat Islamic Microfinance on Poverty Eradication and Women Empowerment. Bulletin of Business and Economics (BBE), 10(4), 176-185.

Khan, S., Hassan, M. K., Rabbani, M. R., & Atif, M. (2021b). An artificial intelligence-based Islamic FinTech model on Qardh-Al-Hasan for COVID 19 affected SMEs. Islamic Perspective for Sustainable Financial System, 234-249.

Kharas, H., Hamel, K. and Hofer, M. (2018). The start of a new poverty narrative.

Marcu, M. R. (2021). The impact of the covid-19 pandemic on the banking sector. Management Dynamics in the Knowledge Economy, 9(2), 205-223.

Mas-Coma, S., Jones, M. K., & Marty, A. M. (2020). COVID-19 and globalization. One health, 9 (100132). 1-4.

McKibben, W., & Fernando, R. (2020). Centre for Applied Macroeconomic Analysis The Global Macroeconomic Impacts of COVID-19: Seven Scenarios. Centre for Applied Macroeconomic Analysis.

Nakaduna, Y., Ahmad, A. A., & Mohammed, M. O. (2021). Economic and Political Implications of Covid-19 Pandemic: A case of Nigeria. Asian People Journal (APJ), 4(1), 34-49.

Obiezu, T. (2020). Nigeria shuts down Lagos and Abuja to control coronavirus spread. Retrieved from

Okeke, C. C. (2021). COVID-19 and Effects of Foreign Donors’ Response on Poverty Reduction Efforts in Nigeriat. Indiana Journal of Humanities and Social Sciences, 2(12), 45-55.

Olurounbi, R., & Bala-Gbogbo, E. (2020). Nigeria intensifies efforts to prevent spread of coronavirus. Retrieved from com/news/articles/2020-03-02/nigeria-intensifies-efforts-to-prevent-spread-of-coronavirus

Onwunyi, U. M., & Ostar, C. (2020). The Global Oil Price And The New Normal (Covid 19): Implications On The Nigerian Economy. Socialscientia: Journal of Social Sciences and Humanities, 5(4), 122-133.

Ozili, P.K. (2021). COVID-19 pandemic and economic crisis: the Nigerian experience and structural causes. Journal of Economic and Administrative Sciences, 37(4), 401-418.

Palomino, J. C., Rodrí guez, J. G., & Sebastian, R. (2020). Wage inequality and poverty effects of lockdown and social distancing in Europe. European Economic Review, 129, 103564.

Pinzaru, F., Zbuchea, A., & Anghel, L. (2020). The Impact of the COVID-19 Pandemic on Business. A preliminary overview. Strategica. Preparing for Tomorrow, Today, 721-730.

Salami, V. U., Okoduwa, S. I., Chris, A. O., Ayilara, S. I., & Okoduwa, U. J. (2021). Opinion Review of Socioeconomic Impact of COVID-2019 on Women's Health. Frontiers in Global Women's Health, 2, 16.

Shah, S.M.A.R., Raza, K., Shaherbano (2020). The Role of Islamic Finance in Achieving Economic Growth: An Econometric Analysis of Pakistan. In: Elzahi Saaid Ali, A., Ali, K., Hassan Azrag, M. (eds) Enhancing Financial Inclusion through Islamic Finance, Volume II. Palgrave Studies in Islamic Banking, Finance, and Economics. Palgrave Macmillan, Cham.

Sharif, A., Aloui, C., & Yarovaya, L. (2020). COVID-19 pandemic, oil prices, stock market, geopolitical risk and policy uncertainty nexus in the US economy: Fresh evidence from the wavelet-based approach. International Review of Financial Analysis.

Shibu, a. A., & Chachi, a. (2021). Development of Islamic Banking and Finance: the Contribution of Ahmed Abdul Aziz Al Najjar. Eurasian Journal of Researches in Social and Economics (EJRSE), 8(4), 223-235.

Shrestha, N., Yousaf Shad, M., Ulvi, O., Hossain Khan, M., …., & Haque. U. (2020). The impact of COVID-19 on globalization. One Health, 11(100180), 1-9.

Sun, Huidong;, Rabbani, M. R., Naveed, A., Sial, M. S., Guping, C., Zia-ud-din, M., & Fu, Q. (2020). CSR, Co-Creation and Green Consumer Loyalty: Are Green Banking Initiatives Important? A Moderated Mediation Approach from an Emerging Economy. Sustainability (Switzerland), 12(24), 10688.

Trimulato, T., Bin Sapa., N & Umar. S.H (2021). The Role of Islamic Economic Institutions to Recover Real Sector of SMEs During COVID-19 Pandemic. Li Falah: Jurnal Studi Ekonomi dan Bisnis Islam, 6(1), 78-91.

Umar, U. H., & Danlami, M. R. (2021, September). The Need for Revitalization of Islamic Social Finance Instruments in the COVID-19 Period in Nigeria: The Role of Digitalization. In The International Conference On Global Economic Revolutions (pp. 177-187). Springer, Cham.

Umar, U.H., AbuBakar, M., Baita, A.J., Kademi, T.T. and Haron, M.H. (2021), "Do academic and professional institutions promote the awareness and knowledge of Islamic banking and finance in Nigeria?", Journal of Islamic Accounting and Business Research, Vol. 12 No. 3, pp. 401-417.

Ventriglio, A., Watson, C., & Bhugra, D. (2020). Pandemics, panic and prevention: Stages in the life of COVID-19 pandemic. International Journal of Social Psychiatry, 66(8), 733-734.

Wanjala, R. E. (2020). Establishing employee engagement for organizational commitment-a case of Dubai Islamic Bank Kenya Limited (Doctoral dissertation).

Wheeler, C. M., Baffes, J., Kabundi, A., Kindberg-Hanlon, G., Nagle, P. S., & Ohnsorge, F. (2020). Adding fuel to the fire: cheap oil during the COVID-19 pandemic. The World Bank. Policy Research Working Paper 9320

Widia T. (2021). Radical Candor as A Business Ethics Strategy to Survive in The Global Financial Crisis of Covid-19 Pandemic and Islamic Finance. International Journal of Scientific & Engineering Research 12(8), 364-375.

World Bank (2020). Nigeria releases new report on poverty and inequality in country. retrieved on 21 April 2021 from

World Health Organization (2020). Mental health and psychological resilience during the COVID-19 pandemic. healthemergencies/coronavirus-COVID-19/news/news/2020/3/mental healthandpsychological- resilience-during-the-COVID-19-pandemic

Wu, Y. C., Chen, C. S., & Chan, Y. J. (2020). The outbreak of COVID-19: An overview. Journal of the Chinese medical association, 83(3), 217.

Zauro, N.A., Saad, R.A.J., Ahmi, A. and Mohd Hussin, M.Y. (2020). Integration of Waqf towards enhancing financial inclusion and socio-economic justice in Nigeria. International Journal of Ethics and Systems, Vol. 36 No. 4, pp. 491-505.

Zimmermann, K. F., Karabulut, G., Bilgin, M.H., & Doker A. C., (2020). Inter-country distancing, globalisation and the coronavirus pandemic. The World Economy, 43(6), 1484-1498.


Copyright (c) 2022 Ibraheem Alani Abdulkareem, AbdulFattah AbdulGaniyy, Mohd Sadad Mahmud

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

Li Falah : Jurnal Studi Ekonomi dan Bisnis Islam, Indexed In

Accredited By

free hit
View My Stats

Organized by : Fakultas Ekonomi dan Bisnis Islam
Published by : Institut Agama Islam Negeri Kendari
Jl. Sultan Qaimuddin No. 17 Baruga Kota Kendari Provinsi Sulawesi Tenggara
phone. +62401-3193710
Fax. +62401-3193710