Uganda, Qatar Explore Opportunities in Islamic Banking and Technology

A high-level business delegation from the State of Qatar has expressed interest in expanding cooperation with Uganda, with a focus on Islamic banking and emerging technologies such as blockchain.

The delegation, led by Mr. Khalid Ahmed Al-Sowaidi and Dr. Rashid Yahya Ssemuddu, Special Presidential Envoy of the State of Qatar, paid a courtesy call on Bank of Uganda Governor, Michael Atingi-Ego, earlier today. Discussions centered on strengthening economic ties between the two countries and identifying investment opportunities in Uganda’s financial sector.

Islamic Banking in Uganda

Uganda has in recent years taken steps to open its financial system to Islamic banking, which operates in compliance with Sharia law. Unlike conventional banking, Islamic banking prohibits interest (riba) and instead emphasizes profit-sharing, risk-sharing, and asset-backed financing.

In September 2023, the Bank of Uganda officially licensed its first Islamic banking institution after Parliament passed amendments to the Financial Institutions Act to provide a legal framework for Sharia-compliant products. This move has positioned Uganda as one of the few countries in the region offering Islamic financial services, with the potential to attract both domestic and international investors, including those from the Gulf states.

Opportunities for Cooperation

The Qatari delegation’s interest signals a new chapter in Uganda-Qatar relations. Qatar’s strong financial base and global experience in Islamic finance can help Uganda grow its Islamic banking sector, providing alternative financing models for businesses, farmers, and entrepreneurs who may not easily access conventional loans.

Additionally, the discussions on blockchain technology highlight Uganda’s ambition to modernize its financial systems. Blockchain can enhance transparency, improve payment systems, and support innovations such as digital currencies and secure financial transactions.

Strengthening Bilateral Ties

Uganda and Qatar have enjoyed growing relations in recent years, particularly in trade and investment. With Islamic banking gaining a foothold in Uganda, cooperation with Qatar could boost financial inclusion, attract foreign direct investment, and create new opportunities for Ugandan businesses to access Gulf markets.

As Governor Atingi-Ego emphasized, partnerships like these align with Uganda’s goal of building a diversified and resilient financial sector. For Qatar, the engagement offers a gateway into East Africa’s emerging markets.