President Yoweri Kaguta Museveni has officially opened Salaam Bank, the first licensed Islamic banking institution in Uganda.
Islamic banking operates according to principles derived from Islamic teachings, where interest-based transactions are prohibited, and profit sharing is emphasized. Islamic banks employ investment tools that adhere to “Sharia” guidelines in order to generate returns on investments.
The bank was launched by President Museveni during the Ramathan dua prayers, organized by the Office of the National Chairman-NRM at Kololo Ceremonial Grounds.
In his address, President Museveni extended his wishes for a fruitful Ramathan to the Muslim community and prayed for their protection. He reiterated his call for believers to engage in income-generating activities to enhance their livelihoods.
“In my hometown of Ntungamo, we value hard work. Each person is expected to have a productive occupation, such as animal husbandry, farming, fishing, manufacturing, or craftsmanship. When I assumed leadership of Uganda, I encouraged you to fight poverty and create wealth,” he stated.
The President outlined four sectors through which poverty can be combated: commercial agriculture, manufacturing, service industries (such as transportation and hospitality), and information and communication technology (ICT).
Recognizing that these avenues require capital, President Museveni highlighted various government interventions, including Entandikwa, NAADS, Operation Wealth Creation, Emyooga, and the Parish Development Model (PDM), aimed at providing start-up capital to Ugandans.
“These initiatives take the form of grants and are free from riba (interest). The issue of riba arose recently with the launch of the Parish Development Model. However, I assure you that I will hold a meeting with Muslim leaders in the near future to discuss PDM and riba, ensuring that Muslims can benefit from the program without limitations,” he assured.
President Museveni emphasized the National Resistance Movement’s commitment to equality and serving all Ugandans, regardless of their religion or tribe. He highlighted how this approach has fostered social and economic development in the country.
“When Amin left, the Lule administration withdrew Uganda from the Organization of Islamic Cooperation (OIC), arguing that the majority of Ugandans were not Muslims. However, after we assumed power, we readmitted the country to the OIC. I insisted that some of my people are Muslims, and they must belong to such an organization. It is not taboo to be a member of the OIC, even if you are not a Muslim. We believe in politics driven by interests, not identity,” he explained.
President Museveni recalled instances where objections were raised against the establishment of the Islamic University in Uganda, but he advocated for its operation. The university has since produced numerous graduates from diverse backgrounds, including non-Muslims. His support for Islamic banking followed the same principle, allowing the establishment of Salaam Bank.
Expressing his welcome to the bank, President Museveni assured them of government support in achieving a smooth operation in Uganda.
“I extend a warm welcome to Salaam Bank in Uganda. This is a significant market with a population of 48 million, and in the next 27 years, Uganda’s population will reach 106 million. You should commence your services immediately to serve the people of Uganda,” he stated.
Mr. 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 of Djibouti to President Museveni.
The ONC Manager, Hajjat Hadijah Uzeiye Namyalo, expressed gratitude to President Museveni for his love and continuous support of the Muslim community in the country. She also thanked him for empowering Muslims economically by granting them an Islamic bank.
“Your Excellency, you are a true leader sent by God, who empathizes with us, the poor. We are gathered here because of your love for us, and we reciprocate that love. You are ready to empower us for a specific purpose,” Hajjat Namyalo expressed.
Sheikh Erias Kigozi, the Wakiso District Kadhi, representing the Muslim community, praised President Museveni as a hero, patriot, parent, and visionary leader with a mission and ambition.
“We thank you for being a good leader who thought of us Muslims and made it possible for us to have our own bank in line with Sharia law,” he acknowledged. Sheikh Kigozi also commended President Museveni for safeguarding Muslim properties in the country.
“We also appreciate your reappointment of fellow Muslims, such as Hajjat Rukia Nakadama and Hajjat Minsa Kabanda, to the Cabinet.”
Mr. Ibrahim M. Abdirahman, the Board Chairman of Salaam Bank, informed President Museveni that he signed the Islamic bank regulations into law at a time when the Islamic community greatly needed them.
“Indeed, you have been a true friend to this community. The license for Salaam Bank was granted to us on September 8, 2023, coinciding with Your Excellency’s birthday month. We sincerely thank you for your wholehearted support. The establishment of an Islamic Bank marks a significant milestone in Uganda’s journey towards economic empowerment and inclusive financial growth,” he expressed.
“Islamic finance offers, among other things, Sharia-compliant bonds that can help the government raise capital for various infrastructure and projects. We hope that the government of Uganda will seize 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 by Parliament authorizing Islamic banking. President Museveni signed the law into effect in August 2023.