President Museveni launches Salaam Bank, The Uganda’s first-ever Islamic banking institution

On Wednesday witnessed a significant milestone in the country’s banking sector as President Yoweri Museveni officially launched Salaam Bank Ltd, the first-ever licensed Islamic Banking institution compliant with Islamic religious teachings and principles.

Salaam Bank Uganda, a subsidiary of a Djibouti-based Salaam Group obtained the license in September last year after Uganda’s parliament passed legislation to authorize Islamic banking, which the President later signed into law.

Now, while speaking at the launch of the bank at Kololo Ceremonial Grounds in Kampala, Mr Museveni said Muslims, who constitute about 14% of Uganda’s population, have long complained that Ugandan banks lacked products compliant with Islamic sharia law and this new development comes as an answer to their needs.

“I welcome you Salaam Bank to Uganda. This is a big market. The population of Uganda is 48 million now,” the President said during the national launch held at Kololo Independence Grounds on Wednesday. In the next 26 years, the population of Uganda will be 106 million, so allow more Islamic banks to come here,” Mr Museveni said during the launch.

The President further encouraged the Muslim community to be involved in various wealth creation programmes from the government and re-echoed the four core principles he said stand firm in the fight against poverty and thus urged the Bazzukulu to adopt, thanks to the new bank launched to their needs.

“I encourage you to fight poverty and create wealth. There are four ways through which a person can fight poverty. The first sector is commercial agriculture, then manufacturing, the third sector is services like transport, hotels, among others and finally ICT,” Mr Museveni.

The President however noted that other government programmes like Entandikwa, NAADS, Operation Wealth Creation, and Emyooga all had no interest (Riba) like the Parish Development Model (PDM), but promised to sit with the Muslim cleric and leaders to forge a way forward so that the Muslims can access PDM funds through the launched Salaam Bank.

“These were in the form of grants and it had nothing to do with riba (interest). The riba issue came into place recently when we launched the Parish Development Model. But, if you convince me that the PDM and Emyooga money have some contradictions as per the Islamic teachings, then I will find a way to send your money directly to this Salaam Bank,” Mr Museveni said.

“When they told me about Islamic banking, I told them I had no problem with it. I said we should let them operate and that is why we have Salaam Bank now,” he added, before assuring the bank of support to smoothly run their operations in Uganda.

Namyalo hailed for mobilizing Bazzukulu

The President in a special way applauded Hajjat Hadijah Namyalo, the manager of his Office of the National Chairman (ONC) and her team for doing an incredible job of mobilizing and uniting Bazzukulu who turned up in tens of thousands to fill up Kololo at the Ramadan Dua Prayers on the afternoon.

President Museveni and Hajjat Namyalo at Kololo Ceremonial grounds during the launch of Salaam Bank Uganda Ltd on March 27, 2024. Photos | PPU

”Hajjat Namyalo and your team you are doing an incredible job, I am very happy. Thank you for bringing together all these masses of bazzukulu,” Museveni said.

Meanwhile, Hajjat Namyalo, who is also Museveni’s Senior Presidential Advisor on Political Affairs thanked the President for loving and always supporting Muslims in the country.

”Mr President sir, you answered the key prayer of Muslims in Uganda the day you signed a law backing Islamic Banking in Uganda, all these thousands of bazzukulu gathering here today have come to thank you. They have since joined other bazzukulu across the country to order you, sir, to stand again in 2026, Omalako Jajja Sigala Ku Ballot,” Ms Namyalo said amid ululations from the Bazzukulu.

Namyalo also welcomed Salaam Bank’s operations in Uganda saying it is an answered prayer for Muslims who she said had no financial system that doesn’t contradict their religion’s principles.

Hajjat Namyalo speaking before President Museveni at Kololo Ceremonial grounds during the launch of Salaam Bank Uganda Ltd on March 27, 2024. Photo/PPU

Now with Salaam Bank and others yet to come In Uganda, Namyalo said that there is absolutely no doubt that all Muslims will prosper and can only give back to Museveni by rallying behind him in the 2026 general elections.

The Wakiso District Kadhi, Sheikh Erias Kigozi who spoke on behalf of Muslims, thanked President Museveni for being a hero, a patriot, a parent and a visionary leader with a mission and an 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 the Sharia law,” he said, underscoring the inspiring ambition of the Salaam Group to broaden the scope of its activities all over the continent including Uganda which he said has a safe and solid financial institution.

President Museveni with officials from Salaam Bank Group at Kololo Ceremonial grounds during the launch of the Islamic Bank on March 27, 2024. Photos | PPU

Salaam Bank ready to grow Uganda’s economy

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

“The licence for Salaam Bank was handed over to us on September 8, 2023. We sincerely thank you for supporting us wholeheartedly. The establishment of an Islamic Bank marks a significant milestone in Uganda’s journey towards economic empowerment and inclusive financial growth,” he said, adding that “the new bank will offer sharia-compliant bonds that the Ugandan government can tap to raise capital for infrastructure projects.”

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

Wednesday’s event was also attended by various Salaam Bank officials, both from Uganda and Djibouti, officials from the Ugandan and Djibouti Governments, and religious leaders among others.

About Islamic Banking

Islamic banking is a form of banking based on Islamic principles. Basically, in Islamic banking, it is not allowed to pay and receive interest but rather on profit sharing. Islamic banks focus on generating returns on investments through investment tools that are “Sharia” compliant.

Islamic finance follows Islamic religious principles such as bans on interest payments and also eschews investments in some activities like gambling.