The Digital Economy in Somalia

: A Theoretical and Empirical Study through Fiqh and Islamic Political/Moral Economy

Abstract

The rapid expansion of digital financial systems across the Muslim world presents both urgent challenges and significant opportunities for Islamic economic thought. While the literature on Islamic finance has grown substantially in recent decades, much of it remains dominated by legalist formalism or replicative models derived from conventional finance. As a result, Islamic economics remains under-theorised in relation to its foundational moral and political economy commitments, particularly in the context of emerging digital infrastructures.

In response, this thesis offers a theoretical and empirical investigation of the digital economy through the lenses of Islamic Political Economy (IPE), Islamic Moral Economy (IME), and contemporary fiqh, with particular reference to the Somali context. It examines how digital economic practices, such as mobile money systems, blockchain-based finance, smart contracts, and fintech entrepreneurship, can be evaluated, governed, and reimagined within an Islamic normative framework grounded in maqāṣid al-sharīʿah (the higher objectives of Islamic law), tawḥīd (unity), ʿadālah (justice), and amānah (trust).

The thesis is structured around three interlinked essays. The first reconceptualises fiqh not as a static body of legal rulings, but as a dynamic mediating tradition capable of engaging emerging digital financial realities through renewed ijtihād and interdisciplinary dialogue. It demonstrates that while fiqh provides essential normative boundaries, particularly regarding ribā, gharar, and maysir, it requires epistemic enrichment to meaningfully engage technologies such as algorithmic trading, decentralised finance, and automated contractual systems.

The second essay situates the digital economy within Islamic moral and political economy, arguing that digital infrastructures are normatively embedded and shape power, behaviour, and distribution. Islamic Political Economy informs the analysis of institutional design and governance, while Islamic Moral Economy provides criteria for justice, inclusion, transparency, and trust. The argument is supported by qualitative interviews analysed using grounded theory to generate empirically grounded insights.

The third essay presents the quantitative component of the study, drawing on a structured survey analysed using descriptive and inferential non-parametric tests, as well as Partial Least Squares Structural Equation Modelling (PLS-SEM). It empirically examines how Islamic values are negotiated within a digital economy characterised by weak state regulation, fragmented Sharīʿah governance, and limited ethical accountability. The findings indicate a tension between perceived gains in efficiency and financial inclusion, and concerns regarding emerging forms of dependency, exclusion, and moral ambiguity associated with digital platforms.

By triangulating normative theory with empirical realities, this thesis makes an original contribution to Islamic economics by developing a framework that is simultaneously moral, institutional, and community-anchored. It argues that Islamic economics must move beyond a defensive jurisprudence of permissibility and instead operate as a constructive and visionary project capable of shaping ethically informed digital infrastructures. The study proposes practical mechanisms, including digital maqāṣid-based evaluative tools, interdisciplinary governance councils, and scholar-technologist collaboration models, to embed ethical reasoning into code, policy, and platform design. In doing so, it advances Islamic political and moral economy as a living intellectual tradition capable of guiding digital economic transformation toward justice, dignity, and moral responsibility.

Date of Award	2026
Original language	English
Awarding Institution	University of Dundee
Supervisor	Alija Avdukic (Supervisor) & Lukman Hakim (Supervisor)