BANK OF UGANDA OFFICIALS AND MEMBERS OF PARLIAMENTS GIVEN INSIGHTS ON ISLAMIC FINANCE.

On 2nd of December, Bank of Uganda officials and some of Uganda Members of Parliament visited Gulf African Bank to get some insights on Islamic banking and regulatory as well as legal issues facing the industry and Kenyan Expierience.

Uganda has for some time shown great interest towards reforming it is banking and financial laws and regulatory framework to create a level playing field for Islamic Banking in the country. If Uganda succeeds to reform its law will be the first country in East African Community to have done what other countries like Kenya and Tanzania, despite having Islamic Financial institutions,are yet to do.

The steps taken by Bank of Uganda to involve law makers of the country to understand Islamic banking and the need to reform its laws and regulatory approach is the very realistic and systematic approach towards preparing the country through consultative measures towards a common positive goal.

Welcoming the officials at the bank, Managing Director of Gulf African Bank applauded the steps taken by Uganda to learn from the neighbours but ensure Islamic banking gets the polical support and will to develop in a neutral and fair playing grounds. He also appreciated CBK accomodating approach to the needs of the small but very well growing industry in Kenya.

Gulf African Bank explained about Islamic banking, why our economies needs to open up for Islamic Finance and the needs to give Islamic Finance legal and regulatory framework that addresses its unique business and value proposition. Mps were advised that in their pursuits to reform banking laws they should never forget to look into insurance, tax and capital market legislations because Islamic finance needs the support of these other stakeholders to be able to operate efficiently and effictively.

The Ugandan officials were keen to learn and appreciated GAB for hosting them and exposing them to areas that they had not much thought about. Furthermore, they hinted that Uganda will take the insights and suggestions given to ensure the friendly legal and regulatory framework is put in place to attract local and foreign investors to invest in the financial services business.

I think this path taken by Uganda couples with sincere political will is best way forward towards making sure that the required reforms are not the talk but translates into action. I know for example Tanzania, has since 2013 through IMF consultation team they meet key stakeholders from the industry for the same objective of coming up with legal, regulatory and supervisory framework for Islamic banking in Tanzania, however, very little is know on what the IMF had suggested and what is the way forward.

Some reports shows that due to country's religious sensitivity between Muslim and Christians, governement and the rulling party is worrying the displease christians if it perceives governemt actions as a support to Islam and Muslims. To mitigate political and social negative reactions, it is good to start with law makers to expose them on the Islamic Finance industry globally and what needs to be done to keep the country into the Global Islamic Finance world as well as provide confidence and assurity required to Islamic Financial institutions in the country to operate without fear or limitations.

Kenya and Tanzania can learn this initiative from Uganda and move on faster. All the best Uganda and other countries willing to join the 'right path.'