PDM does not break Islamic laws - Museveni clarifies

The issue was brought to the forefront by Ms. Hafwa Nalumansi Ssettala, the chairperson of Taqwa Islamic Sacco in Mukono, who in a petition to the president, highlighted the conflict arising from the imposition of a 6% increment on PDM funds, which seemed to contravene the principles of Sharia.

In Islam, riba, the financial interest collected on loans or deposits, is prohibited, being deemed both illegal and unethical—even at minimal rates.

In response, President Museveni clarified in his correspondence with Nalumansi that funds from the PDM should not be viewed as loans but are rather grants from the government.

He equated them to an inheritance a parent passes down to their offspring.

“The Government of Uganda bestows Shs. 100 million upon each Parish annually. This sum is not loaned by the Government to the Parish Sacco but is simply a gift. Is it not permitted in the Quran for a parent to bequeath to their children as they wish?” Museveni articulated in his letter.

The President explained that the 6% is not an interest charge but a safeguard against the erosive effects of inflation on the value of PDM funds within the Saccos and to manage additional transaction-related expenses.

“The challenge we face once the Sacco possesses the funds is inflation. For example, if I purchase my preferred coffee mug for Shs.20,000 this year, the escalating prices might prevent me from affording the same next year. Therefore, if a Sacco applies, let's say, a 5% increment to Shs.1 million after two years for one of its members, it is merely to ensure the Shs.20,000 retains its purchasing power equivalent to this year,” Museveni expounded, questioning why the burden of these costs should fall on the government unjustly.

Museveni reiterated in his missive the importance of guidance from Muslim Sheikhs to their followers concerning the notions of riba and the PDM's workings.

In addition to addressing these concerns, the President confirmed a generous contribution of Shs 200 million to support the Mukono-based Sacco.