Islamic Banking System can’t convert Ugandans to Islam- Muslim MPs

By Francis Lubega

30^th June 2023

Members of Parliament under the Muslim Parliamentary Caucus have dispelled fears that the operationalization of Islamic Banking services in the country is intended to convert Ugandans to Islam.

Their response follows the passing of the Income Tax Amendment Bill 2023 by the House during a plenary sitting chaired by Speaker Anita Among on Thursday with clauses meant to operationalize Islamic Banking products.

Asuman Basalirwa, the Caucus’s Chairperson explained that constitutionally, Uganda is a secular country, and thus, such fears among the citizens relating to the alleged Islamization of the country through Islamic financing products are misplaced.

Basalirwa, also the Bugiri Municipality Member of Parliament explained that sustainable development of Islamic finance offers benefits for economic growth, reducing poverty, and fostering shared prosperity amid threats of aid cuts by Europeans following the recent enactment of the Anti- Homosexuality law.

Butambala County Member of Parliament, Muhammad Muwanga Kivumbi said that Islamic financing will address the current high-interest rates on loans being offered by conventional banks and financial institutions in the country that are stifling economic growth.

Contentions emerged during the debate in the House over the definition of ‘interest’ as presented by the Government in comparison with what the holy Quran book stipulates. Under Islamic Financing, Muslim lawmakers insisted that interest on the loan is not allowed.

But Speaker Anita Among addressed their concerns that Parliament will organize an orientation about Islamic financing so that in turn, they can ably explain the same to their constituents across the country.

The Income Tax Amendment Bill 2023 under the Financial Institutions Act will be transmitted by Parliament to the President for the second time for assent. Once the President assents to it, it becomes an Act to operationalize the long-awaited Islamic Financing in Uganda.

Currently, Kenya, Tanzania, and Rwanda in the East African Community – EAC bloc are among the 50 nations across the world that have already rolled out Islamic Banking and financial services.