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March 19, 2011

The National Health Insurance Scheme or the NHIS is a nationwide health insurance system that seeks to provide primary health services to Ghanaians or persons resident in Ghana, especially the poor and the less privileged. Under Section 11 of the National Health Insurance Act, Act 650 only three types of national health insurance schemes can be established and registered in Ghana. These are the District Mutual Health Insurance Scheme, the Private Mutual Health Insurance Scheme, and the Private Commercial Health Insurance Scheme. So far the District Mutual Health Insurance Scheme is the most well known of the three, due to the fact that the Act made it mandatory under Section 29 (1) that “there shall be established in every district in the country a mutual health insurance scheme for the residents of the districts.” I want to assume, therefore, that there is a District Mutual Health Insurance Scheme in every district (including the Metropolitan and Municipal Assemblies) of the country. Again the Act, under Section 31 made it mandatory for “a person resident in Ghana other than a member of the Armed Forces of Ghana and the Police Service shall belong to a health insurance scheme licensed under this Act.” In other words, national health insurance is compulsory for persons resident in Ghana other than the Army and the Police.

The purpose of this article is to scrutinize the various types of health insurance schemes we have in Ghana, and whether or not they conform to the teachings and practices of the Islamic faith. Another purpose is to provoke debate on the issue among Muslims and non-Muslims alike.

At this stage it is important to state that it is widely agreed among Muslim scholars that Insurance or more appropriately Commercial Insurance is not acceptable in Islam. In other words insurance as we know it today is haraam (unlawful) in Islam. And it is unlawful due to the involvement of Riba (interest), Maisir (gambling) and Gharar (uncertainty), and consuming people’s wealth unlawfully. However, Takaful, the Islamic alternative to insurance, is based on the concept of social solidarity, cooperation and mutual indemnification of losses of members. It is a pact among a group of persons who agree to jointly indemnify the loss or damage that may inflict upon any of them, out of the fund they donate collectively. This form of insurance is the islamically accepted form of insurance – insurance not for commercial purposes but rather for the social solidarity and mutual benefit of policy holders.

Now let us take a careful look at the various types of health insurance schemes we have, and whether or not they fit into our understanding of Takaful (Islamic Insurance). It is important to note that health insurance is a form of insurance, and it could be for-profit or not-for-profit. In fact under Act 650, A person does not qualify to apply to operate a health insurance scheme in this country unless, (a) in the case of a district mutual or private mutual health insurance scheme, it is registered as a company limited by guarantee, or (b) in the case of a private commercial health insurance scheme, it is registered as a limited liability company, under the Companies Act, 1963 (Act 179).”

First of all, District Mutual Health Insurance Schemes are registered in Ghana as companies limited by guarantee, and therefore operates “exclusively for the benefits of the members.” This, on the face of it satisfies our definition of Takaful. However, the problem with this type of scheme is Section 33 (2) of the Act which states that “A district mutual health insurance scheme shall be provided with subsidy from the National Health Insurance Fund.” The problem I have with that particular provision is the source of funding. The Act (Section 35) gives the Governing Council of the scheme the powers to authorize any investment of the funds, and these investments could be in any form, which may not necessarily be Islamic. And Islam does not permit un-Islamic modes of investments in the name of national health insurance. Every form of investment must conform to the teachings of the Holy Qur’an and the Sunnah. And unless this problem is corrected, this form of health insurance scheme will fail the Takaful test.

The second type of health insurance is the Private Mutual Health Insurance Scheme. Under Section 50 of Act 650, “A private mutual health insurance scheme shall be operated exclusively for the benefit of the members and shall provide the members with the health benefits that the governing body of the scheme shall determine.” This type of health insurance is almost similar to the District Mutual Health Insurance Scheme. However there is still a difference between the two and for me that difference is significant. The major difference in my opinion is the fact that this type, the Private Mutual Health Insurance Scheme does not receive subsidies from the National Health Insurance Fund! What this means is that Muslims can manage their own Private Mutual Health Insurance Scheme with a 100% halal funds. And in such a scheme, the Governing Council which shall be made up of Muslims will ensure that any investments of the scheme’s funds will be halal.

The last type of health insurance under Act 650 is the Private Commercial Health Insurance Scheme. This type of health insurance can only be registered as a profit making businesses entity, and therefore does not fit into our definition of Takaful.

Now back to the question; is the National Health Insurance Scheme Islamic? Base on the above analyses, one cannot give a categorical answer. However, it is my humble opinion, base on the facts available, that the only health insurance scheme that will be islamically acceptable in Ghana will be the Private Mutual Health Insurance Scheme. Unfortunately, however, majority of Muslims in Ghana are rather registered with the various District Mutual Health Insurance Schemes. We don’t know the type of investments that are made with our premiums and the funds from the National Health Insurance Fund. But we can be sure of the type of investments when Muslims in Ghana establish their own Private Mutual Health Insurance Scheme, then we can manage our investments in halal ways that will be in line with our faith. I wish to throw the challenge to the Office of the National Chief Imam and the Ahlu-Sunnah Wal-Jammah to start exploring the possibility of establishing an Islamically Acceptable Private Mutual Health Insurance in Ghana – a health insurance scheme that will be in conformity with both the Sunnah and the laws of Ghana. And Allah knows best.


From → Islam

  1. Mahmud Michael permalink

    I would like to commend you for your intellectual analysis of health insurance scheme base on the fact gathered in Ghana. keep up the good work on other issues as well.
    I its my hope that the institutions you called upon, will take the challenge and come up with an acceptable model for muslims and non muslims alike.

    The question is where were they when these legislations were being being drafted?

  2. The problem with Muslim leadership in Ghana is that our leaders are not proactive and to some an extent ineffective. It is suprising that the Muslim marriage law in Ghana is still called ‘The Mohammedan Marriage Ordinance”. Muslims are not Mohammedans! So, that is the problem we are facing in Ghana. But insha Allah some of us have decided to take up the challenge, with your support.

  3. Good work done Mr Mahmoud, i think is high time we the Muslim youth rise up to problems we are encountering in these country. For all we know Ghana is considered a secular state but we are being made to follow whatever the majority in the country are following and doing all because we have refused to abide by our religious rules and regulation. You have just started a good initiative and you will be soley supported in this. This is not the only problem we are facing as muslims in this country. The issue of the veil of the muslim women is another important factor which need to be addressed seriously. Most muslim women can not work in some sectors of the economy because they are will not be allowed to veil as prescribed and even or educational institutions are also a major hindrance to the problem. I think our leaders must rise up and fight for the cause of Islam in Ghana. BRAVO.

  4. Rashid Hafis permalink

    Salam Mahmoud,
    This debate you have provoked is quite a challenge within the Ghanaian muslim context owing to the persistent economic pressures vis-a-vis the health needs of the large poor among which a greater number are muslims.
    I believe the right question should be:”Is the average Ghanaian muslim economically empowered enough to face his or her educational,health and socio-economic needs within the Islamic context?”
    In trying to find answers to this question,we can only continue to pray for Allah’s mercies.
    But I think the last part of your argument sounds good,the fact that we have to take up the challenge.

  5. I just read this post and it is indeed thought provoking. Muslims in Nigeria are faced with a similar fate and you would be amazed at the level of ignorance amongst the ‘educated and enlightened’ muslims about Islam, who by the way are well off (wealth, position, education) yet are unable to deliver the much desired change. I pray insha Allah that we can unite our forces under the banner of Islam some day soon to improve the lot of Africans.

  6. Abubakar Mohammed Dantakhati permalink

    Alhamdulillah bros for such a wonderful piece. But to me, our communities do not develop nexus between government policy and the teachings of Islam hence the need to put all hands on deck to make sure that the right thing is done in our islamic communities.

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