Museveni inaugurates Uganda's first Islamic banking institution

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Museveni inaugurates Uganda's first Islamic banking institution
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President Museveni has officially launched Salaam Bank, Uganda's first licensed Islamic banking institution.

Islamic banking follows principles based on Islamic law, which prohibit the payment and receipt of interest. Instead, it operates on profit-sharing arrangements and investment tools that comply with Sharia principles.

The President inaugurated the bank during the Ramathan dua prayers held at Kololo Ceremonial Grounds, organized by the Office of the National Chairman-NRM.

Addressing the attendees, Museveni extended his wishes for a fruitful Ramathan and offered prayers for the protection of Muslims. He also emphasized the importance of engaging in income-generating activities to improve livelihoods.

"In my hometown of Ntungamo, laziness is not tolerated. It is customary for every individual to be involved in activities such as animal rearing, crop cultivation, fishing, manufacturing, and craftsmanship. When I assumed leadership of Uganda, I encouraged you to fight poverty and create wealth," he stated.

He outlined four sectors through which poverty can be alleviated, including commercial agriculture, manufacturing, service industries like transportation and hospitality, and information and communication technology (ICT).

The President acknowledged that these sectors require capital, and thus the government has implemented various interventions such as Entandikwa, NAADS, Operation Wealth Creation, Emyooga, and the Parish Development Model (PDM) to provide startup capital to Ugandans.

"These interventions have taken the form of grants, avoiding any involvement with riba (interest). The issue of riba only came up recently when we launched the Parish Development Model," he explained.

Museveni assured the Muslim community that he would hold a meeting with their leaders to discuss the PDM and riba, exploring ways for Muslims to benefit from the program without any conflicts with Islamic teachings.

"If you can convince me that the PDM and Emyooga funds have contradictions with Islamic teachings, I will find a way to directly channel your money to this bank."

Museveni emphasized the NRM's commitment to nondiscrimination and equal service provision to all Ugandans, regardless of their religion or tribe. He highlighted how this approach has contributed to the country's social and economic development.

"When Amin left, the Lule administration removed Uganda from the Organization of Islamic Cooperation (OIC), arguing that the majority of Ugandans were not Muslims," he said.

"However, when we took over, we readmitted Uganda to the OIC. I made it clear that some of my people are Muslims, and they should be part of such an organization.

"Belonging to the OIC is not limited to Muslims; we believe in the politics of interest, not identity."

Museveni recalled the initial opposition to the establishment of the Islamic University in Uganda but expressed his support for its operations.

Likewise, he endorsed the establishment of Islamic banking, leading to the creation of Salaam Bank.

He warmly welcomed Salaam Bank to Uganda, assuring them of government support to ensure the smooth operation of their services in the country.

"I welcome Salaam Bank to Uganda. This is a significant market with a current population of 48 million, which is projected to reach 106 million in the next 27 years. You can begin serving the people of Uganda immediately," he stated.

Mahmoud Ali Youssouf, the Minister of Foreign Affairs and International Cooperation of Djibouti, who led the Djiboutian delegation to Uganda, conveyed greetings from President Ismaïl Omar Guelleh to President Museveni.

Youssouf emphasized the ambitious goals of the Salaam Group to expand its activities across the continent, including Uganda, which he described as having a secure and robust financial industry.

Hadijah Uzeiye Namyalo, the ONC Manager, expressed gratitude to President Museveni for his love and unwavering support for Muslims in the country.

She thanked him for empowering Muslims economically by granting them an Islamic bank.

"Your Excellency, you are a true leader sent by God, showing empathy towards us, the poor. We have gathered here because you love us, and we love you too. You are ready to empower us for a specific purpose," Namyalo said.

On behalf of the Muslim community, Sheikh Erias Kigozi, the Wakiso District kadhi, commended President Museveni as a hero, patriot, parent, and visionary leader with a mission and ambition.

He expressed gratitude for the President's efforts in establishing an Islamic bank in accordance with Sharia law and for protecting the property of Muslims in the country.

"We also thank you for reappointing our fellow Muslims, such as Hajjat Rukia Nakadama and Hajjat Minsa Kabanda, to the Cabinet," Kigozi added.

The Board Chairman of Salaam Bank, Ibrahim Abdirahman, informed the President that he signed the Islamicbanking regulations into law at a time when the Islamic community greatly needed it.

"Indeed, you have been a true friend to this community. Salaam Bank received its license on September 8, 2023, which happened to be your birthday month, Mr. President," he said.

"We sincerely thank you for wholeheartedly supporting us. The establishment of an Islamic Bank signifies a significant milestone in Uganda's journey towards economic empowerment and inclusive financial growth."

He highlighted that Islamic finance offers Sharia-compliant bonds, which the government can utilize to raise capital for infrastructure and other projects. He expressed hope that the government of Uganda would embrace this opportunity due to its immense benefits.

In September of the previous year, the Bank of Uganda granted its first Islamic banking license to Salaam Bank Uganda Ltd, a subsidiary of a Djibouti-based bank, following the passage of legislation authorizing Islamic banking by Parliament.

President Museveni subsequently signed this legislation into law in August 2023.

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