(MENAFN- The Peninsula) The Republic of Uganda, which is working aggressively to attract Qatari investors to all sectors of its booming economy, is ready to welcome Islamic banking and financial service providers from Qatar 'with open arms, said the Finance Minister of the East African nation.
'The Islamic banking and financial services have one big attraction to us—interest-free financing provision. It's a wonderful human-friendly way of financing businesses, Matia Kasaija, Finance Minister of Uganda, told The Peninsula recently. Kasiaja, who was part of the President Yoweri Museveni's recently concluded official visit to Qatar, added: 'Although I am relatively new to the Islamic financial system, but one principle that I was taught about its main principle, which works on ‘profit and loss-sharing' basis… If you make money, you share the profit and if you don't, then you bear the losses together.
Kasiaja noted that conventional banks, unlike their Islamic counterpart, do not care about the success or loss of businesses. If a borrower is not able to repay loans, banks seize assets.
'Interest-free lending is the most beautiful thing about Islamic finance, which Ugandans are waiting to welcome with open arms, said the Minister.
Ugandan government has recently got laws passed from its parliament to make the entry and operation of Islamic banking system. Foreign banks entering the country do not necessarily need to have local partner to begin any kind of businesses in Uganda.
'If you invite local businesses to join its better, but there is no restriction. All sectors are 100 percent open to foreign investors, stressed Kasiaja.
Explaining it's very easy to establish a commercial entity in Uganda, the Minister said: 'Suppose you want to set up a factory for textiles in Uganda, which produce a lot of cotton, you just have to show a minimum amount of $100,000 and a feasibility study. If the investment authority finds it satisfactory, you get all the needful papers, including trading and environment licenses, within three days.
The minister said that Uganda is also inviting Qatari investment to extract its untapped crude oil, which is sitting on a oil reserve of about 350 billion barrels and a significant amount of natural gas.
'We are currently focusing on extracting crude oil, not gas. The first oil in Uganda is expected to come out by 2020. As far as gas is concerned, we intend to use it generating power in the coming years, Kasiaja explained.
Some prominent Qatari businessmen, including Sheikh Hamad bin Faisal Al Thani, Chairman and Managing Director of Al Khaliji Bank, and Vice-Chairman of Qatar Chamber, Mohammed bin Ahmed bin Towar Al Kuwari, who met President Museveni, during his visit to Qatar, expressed their interest to explore investment opportunities in Uganda.
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