Uganda: Is Islamic Banking the Next Gold Mine for Uganda?
Uganda's banking industry performance weakened during the 2011-2014 period due to turbulent economic challenges, and now, due to the COVID-19 pandemic, traders are protesting against high-interest rates.
If both economic growth and lending growth, especially in the private sector, are low, there is no way the government will be able to solve unemployment because the general public will fear seeking loans due to the high interest rates - and the banks will be stuck with the money as there will be no investments coming up - hence leading to the closing down of businesses, which leads to low consumption and purchasing power, static or declining economic growth, high taxes, high prices, demonstrations, strikes, murder, theft, corruption, etc.
It's high time banks diversified their portfolio and embraced Islamic banking, reducing their risk exposure to sensitive sectors like oil and gas since the world is moving towards renewable energy. When oil prices fall, it becomes very risky to hold oil as a financial asset, which is why some countries are becoming less reliant on oil and gas production.
It's no longer in the interest of major oil-producing countries to restrain output as they seek to produce and export as much as they can because, in the near future, we see factors like climate change, new electric car technologies, clean hydrogen energy, solar and wind energy, and shale going to erode long-term demand for crude oil in the next decade as technology makes fossil fuels obsolete.
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