THE ROLE OF ZAKAH AND WAQF IN

POVERTY ALLEVIATION

Professor Ahmad Bello Dogarawa

Department of Accounting, Ahmadu Bello University Zaria Nigeria
08032989042 - abellodogarawa@gmail.com

Presented at Association of Zakat and Waqf Operators in Nigeria (AZAWON) Conference at

Al-Istiqamah University, Sumaila, Kano on Saturday, November 27, 2021 (22.04.1443)

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 1

 Presentation outline
• Introduction
• Conceptualisation
• Zakah and Waqf in light of Maqāsid al-Sharī’ah
• Zakah, Waqf and poverty alleviation
• Zakah, Waqf and global developmental issues
• Assessing socio-economic potentials of Zakah and Waqf
• Challenges and success factors for Zakah and Waqf operators

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 2

 INTRODUCTION

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 3

 Introduction
• Poverty is a concept that has many faces, changing from place to
place and across time, and has been described in many ways.
• At the basic level, it poverty may be defined as a state or condition in
which a person or community lacks the means to provide the
necessities of life - food, clean water, shelter and clothing.
• In today’s world, the definition of poverty has been extended to
include access to health care, education and even transportation.

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 4

 Introduction [cont’d.]
• According to World Bank 2020 estimates, almost half the world’s
population, 3.4 billion live on less than $3.20 per day (in lower-
middle-income countries) and $5.50 a day (upper-middle-income).
• While 24% of total global population is Muslim population, half of
global poverty resides in Muslim world and available statistics have
shown that the situation is worsening by day.
• OPHI-UNDP’s Multidimensional Poverty Index (MPI) report, which
measures poverty by income, and by people's access to health,
education and living standard indicators shows that 83% of all
multidimensionally poor people in the world live in Sub-Saharan
Africa and South Asia.
Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 5
 Introduction [cont’d.]
• In Nigeria:
 A document published by Congregational Research Service in 2020 asserted that out
of Nigeria’s 214 million people; roughly half of the population is living on less than
$1.9 per day, with sparse social safety nets, leaving them especially vulnerable.
 However, based on its 2020 Nigeria Living Standard Survey (NLSS), the Nigerian
National Bureau of Statistics reported that 40% or 83 million Nigerians live in poverty
but using OPHI-UNDP multidimensional poverty index, 47.3% Nigerians, or 98 million
people, live in multidimensional poverty.
 Income poverty in the country was reported at 67% in 2020 though using the World
Bank’s income poverty threshold of $3.20 per day, Nigeria’s poverty rate is 71%.
 As poverty is an amorphous and to some extent a subjective concept that is
influenced by what people consider to be more valuable in life, using ’Happy Planet
Index’ measure of poverty that is based on average subjective life satisfaction, life-
expectancy at birth, and ecological footprint, the number of poor people in Nigeria is
far less than what the above scaring statistics show.
Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 6
 Introduction [cont’d.]
• Poverty is a complex and multidimensional issue.
• Countries use different approaches to respond to the problem of
poverty and employ a variety of strategies and policies to alleviate it
based on the economic system they operate.
• Poverty alleviation (also called poverty reduction and poverty relief) is
a set of measures, both economic and humanitarian, that are
intended to improve the quality of life for those people currently
living in poverty and to permanently lift people out of poverty.

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 7

 Introduction [cont’d.]

• Islam considers poverty (both extreme and relative) as an evil, and a

catastrophe that must be addressed in view of its negative spiritual,
economic, social and moral consequences on individuals and society
in general.
• Islam has developed some positive, preventive and corrective
measures that will help to effectively alleviate poverty in Muslim
communities.

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 8

 Introduction [cont’d.]

Positive measures Preventive measures Corrective measures

Income growth Compulsory transfer

Control of ownership

Functional distribution
Recommended transfer
of income
Prevention of
Equal opportunity malpractice State responsibility

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 9

 Introduction [cont’d.]

• Zakah and Waqf are the two most important mechanisms of Islam’s
corrective measures that provide a social safety net (SSN) to Muslim
ummah through wealth redistribution in line with its social and
economic welfare system to prepare for prosperity both in this world
and the hereafter.
• While Zakah represents an instrument of Islamic social finance that
focuses on compulsory transfer, Waqf represents an instrument of
recommended transfer.

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 10

 CONCEPTUALISATION

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 11

 Concept of Zakah
• Zakah, the third pillar of Islam and the first pillar of its economic
system is a compulsory payment of a specific amount from specific
types of wealth by the wealthy to the economically underprivileged.
[Q2:43] ‫ي‬ ََ ِ‫الراكِع‬ َ
‫ع‬ ‫م‬ َ ‫ا‬
‫و‬ ‫ع‬ ‫ك‬
‫ار‬ ‫و‬ َ َ
‫ة‬ ‫ا‬ ‫ك‬ َّ
‫الز‬ َ ‫ا‬
‫و‬ ‫ت‬‫آ‬‫و‬ َ َ
‫ة‬ ‫َل‬ ‫الص‬ ‫ا‬
‫و‬ ‫يم‬ ِ
َّ َ َ ُ ْ َ َ َ َُ َ َّ ُ ‫• َوأَق‬
َ ،‫ك‬ ِ‫ َفَِإ َْن َى َم َأَطَاعوا َلِ َذل‬،‫اّلل‬ َِّ َ ‫ول‬
َُ ‫س‬ ‫ر‬َ َ
‫َن‬ ِ‫أ‬‫و‬ َ َ
‫اّلل‬
َّ َ َ
‫ل‬ َِّ‫إ‬َ َ
‫و‬ ‫ل‬
َِ‫إ‬َ َ
‫ل‬ َ َ َ
‫ن‬ْ َ
‫أ‬ َ ِ ‫ل َ َشهاد‬
َ
‫ة‬ َ َ ِ
‫إ‬َ َ
‫م‬ ‫ه‬ ‫ع‬ ‫اد‬ ‫ف‬
َ َ ، ‫اب‬ِ ‫ت‬ ِ ْ‫ت َقَوما َ ِم َن َأَى َِل َال‬
‫ك‬ َ ِْ
‫َت‬َ َ َ
‫ك‬ َّ
‫ن‬ ِ
‫• إ‬
َ ُ ُْ َُ َ ُ ّ َ َ َ ُْ ُ ْ َ ْ ْ ًْ َ
ََّ ‫ َفَأ َْعلِ ْم ُه َْم َأ‬،‫ك‬ ِِ ٍ ٍَ ‫صلَ َو‬ ِ‫فَأَعل‬
َ‫ض‬ََ ‫اّللََافْ تَ َر‬
ََّ َ ‫َن‬ َ ‫ َفَِإ َْن َ ُى َْم َأَطَاعُوا َل َذل‬،‫ف ََ ُك َِّل َيَ ْوَم َ َولَْي لَ ٍة‬
َ َِ ‫ات‬ َ َ
‫س‬ ‫َخ‬
َْ
َ َ ْ َْ َ َ َ َ َ
‫م‬ ‫ه‬ِ ‫ي‬ ‫ل‬
َ ‫ع‬ َ َ
‫ض‬ ‫ر‬ ‫ت‬
َ ‫اف‬
ْ َ َ
‫اّلل‬
َّ َ َّ
َ
‫َن‬ ‫أ‬َ َ
‫م‬ ‫ه‬
ُْْ ْ‫م‬
[Muslim] ....‫ف فُ َقَرائِ ِه َْم‬ َ ََِ‫َفَتُ َرد‬،‫َتُ ْؤ َخ َُذَ ِم َْنَأَ ْغنِيَائِ ِه ْم‬،ً‫ص َدقَة‬ َ ْ ‫َعلَْي‬
َ َ
‫م‬ ‫ه‬ِ
• The Qur’an mentions it in about 30 places of which in 27 places it was
joined with Salah, and several Ahādīth also covered its subject matter.

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 12

 ‫]‪Concept of Zakah [cont’d.‬‬
‫‪• Zakah was also ordained during previous Prophets.‬‬
‫الزَك َِاة َ َوَكانُوا َلَنَا َ َعابِ ِد ََ‬
‫ين‬ ‫اءَ َ َّ‬‫الص ََلَِة َ َوإِيتَ َ‬
‫ام َ َّ‬ ‫اْلَْي َر َِ‬
‫ات َ َوإِقَ ََ‬ ‫اى َْم َأَئِ َّم َةً َيَ ْه ُدو َن َ ِِب َْم ِرََن َ َوأ َْو َحْي نَا َإِلَْي ِه َْم َفِ ْع ََل َ ْ‬
‫• َو َج َع ْلنَ ُ‬
‫نتَ‬ ‫ند َ َربَِِّو َ َم ْر ِضيًّا ]‪َ [Q19:55‬و َج َعلَِ َ‬
‫ن َ ُمبَ َارًكا َأَيْ ََن َ َما ََ ُك َُ‬ ‫الزَك َِاة َ َوَكا َن َ ِع ََ‬
‫لص ََلَِة َ َو َّ‬
‫]‪َ َ [Q21:73‬وَكا َن َ ََيْ ُمَُر َأ َْىلََوَُ ِِب َّ‬
‫تَ َحيًّا ]‪[Q19:31‬‬ ‫الزَك َِاةَ َماَ ُد ْم َُ‬ ‫لص ََلَِةَ َو َّ‬
‫انَ ِِب َّ‬‫ص َِ‬‫َوأ َْو َ‬
‫‪• The beneficiaries of Zakah are clearly spelt out in the Qur’an.‬‬
‫ف َ َسبِ َِ‬
‫يل َهللا َ َوابْ َِنَ‬ ‫ي َ َوِ َ‬ ‫اب َ َوالْغَا ِرِم ََ‬
‫الرقَ َِ‬
‫ف َ ِّ‬ ‫ي َ َعلَْي َها َوالْ ُم َؤلََّف َِة َقُلُوبُ ُه َْم َ َوِ َ‬ ‫ات َلِْل ُف َقَر َِاء َ َوالْ َم َساكِ َِ‬
‫ي َ َوالْ َع ِاملِ ََ‬ ‫الص َدقَ َُ‬ ‫• إََِّّنَا َ َّ‬
‫يم ]‪[Q9:60‬‬ ‫يمَ َح ِك ٌَ‬‫يض َةًَ ِم ََنَهللاَ َوهللاَ َعلِ ٌَ‬ ‫السبِ َِ‬
‫يلَفَ ِر َ‬ ‫َّ‬
‫‪• There is also preference for distribution of Zakah proceeds in the‬‬
‫‪location it was earned as stated in the Sunnah.‬‬
‫فَأ َْم َواِلِِ َْمَتُ ْؤ َخ َُذَ ِم َْنَأَ ْغنِيَائِ ِه َْمَ َوتَُردََ َعلَىَفُ َقَرائِ ِه َْم ]‪[Bukhari‬‬
‫ص َدقََةًَِ َ‬ ‫َ‬ ‫َ‬
‫م‬ ‫ِ‬
‫ه‬ ‫ي‬‫ل‬
‫َ‬ ‫ع‬ ‫َ‬
‫َ ََ َ َ ْ ْ َ‬ ‫َ‬
‫ض‬ ‫ر‬ ‫ت‬ ‫اف‬
‫ْ‬ ‫َ‬ ‫َ‬
‫اّلل‬
‫َّ‬ ‫َ‬ ‫َّ‬
‫َ‬
‫َن‬ ‫أ‬‫َ‬ ‫َ‬
‫م‬ ‫ه‬ ‫م‬
‫ْ ُْْ‬
‫• فَأَعلِ‬
‫)‪Saturday, 27.11.2021 (22.04.1443‬‬ ‫‪Prof. A. B. Dogarawa - ABU Zaria‬‬ ‫‪13‬‬
 Concept of Waqf
• Waqf means holding an asset and preventing its consumption for the
purpose of repeatedly extracting its usufruct for the benefit of an
objective representing righteousness and/or philanthropy for as long
as its principal is preserved by its own nature or from arrangements
and conditions prescribed by the Waqf founder.
• It provides the material infrastructure and creates a source of
revenue for use in, among others, social welfare enhancing activities
at all levels such as education, skills and micro entrepreneurial
development, health care, famine, and water and sanitation facilities
in rural areas.

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 14

 ‫]‪Concept of Waqf [cont’d.‬‬
‫’‪• Its legislation and merit are based on the Qur’an, Sunnah and Ijmā‬‬
‫‪• In the Qur’an, Waqf is based on Q2:92; 2:262; 2:267; 64:15-17.‬‬
‫َوَ َم ْس ِج ًداَ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬ ‫ِ‬
‫ص َح ًفاَ َوَّرثََوَُأ َْ‬ ‫• إِ ََّنَ َ َ ُ ُ ْ َ ْ َ َ َ َ َ َ َ ْ َ َ ْ ً َ َ ُ َ َ َ َ ُ َ َ ً َ ً َ ََ ُ َ ُ ْ‬
‫م‬ ‫و‬ ‫َ‬ ‫َ‬
‫و‬ ‫ك‬‫ر‬ ‫ت‬ ‫َ‬ ‫ا‬ ‫اِل‬ ‫ص‬ ‫َ‬ ‫ا‬‫د‬ ‫ل‬
‫َ‬‫و‬ ‫و‬ ‫َ‬ ‫َ‬
‫ه‬‫ر‬ ‫ش‬ ‫ن‬‫و‬ ‫َ‬ ‫َ‬
‫و‬ ‫م‬ ‫َّ‬
‫ل‬ ‫ع‬ ‫َ‬ ‫ا‬ ‫م‬ ‫ل‬
‫ْ‬ ‫ع‬ ‫َ‬ ‫َ‬
‫و‬ ‫ت‬‫و‬ ‫م‬ ‫َ‬ ‫َ‬
‫د‬ ‫ع‬ ‫ب‬‫َ‬ ‫َ‬
‫و‬ ‫ات‬ ‫ن‬ ‫س‬ ‫ح‬ ‫و‬ ‫َ‬ ‫َ‬
‫و‬ ‫ل‬ ‫م‬ ‫ع‬ ‫َ‬ ‫َ‬
‫ن‬ ‫م‬ ‫َ‬ ‫َ‬
‫ن‬ ‫م‬‫ؤ‬ ‫م‬ ‫ل‬
‫ْ‬ ‫ا‬‫َ‬ ‫َ‬
‫ق‬ ‫ح‬ ‫ل‬
‫ْ‬ ‫ي‬‫َ‬ ‫ا‬‫َّ‬
‫ِم‬
‫فَ ِص َّحتَِِوَ َو َحيَاتَِِوَيَ ْل َح ُق َوَُ ِم َْنَبَ ْع َِدَ َم ْوتَِِو‬‫َخَر َج َهاَ ِم َْنَ َمالَِِوَِ َ‬ ‫أ‬ ‫َ‬ ‫َ‬
‫ة‬ ‫ق‬
‫َ‬ ‫د‬ ‫ص‬ ‫َ‬ ‫َ‬
‫َو‬‫أ‬‫َ‬ ‫َ‬
‫اه‬‫ر‬
‫ََ ُ ْ َ ْ ً ْ َ ُ ْ َ َ ً ْ‬‫َج‬ ‫أ‬ ‫َ‬ ‫ا‬
‫ر‬ ‫ه‬ ‫ن‬‫َ‬ ‫َ‬
‫َو‬ ‫أ‬‫َ‬ ‫َ‬
‫اه‬ ‫ن‬ ‫ب‬‫َ‬ ‫َ‬
‫يل‬‫ِ‬ ‫ِ‬‫ب‬‫الس‬
‫َّ‬ ‫َ‬ ‫ِ‬
‫َ‬
‫ن‬ ‫ِ‬
‫بَنَ َاهَُأ ََْوَبَْي تًاَ ْ‬
‫ب‬ ‫ل‬
‫صالِ ٍَحَ‬ ‫ْ َ َ‬‫َ‬ ‫ث‪َ :‬صدقٍََة َجا ِري ٍة‪َ ،‬أ ََو َ ِع ْل ٍَم َي ْن ت َف َع َبِِو‪َ ،‬أ ََو َولَ ٍ‬
‫َ‬
‫د‬ ‫ُ ُ‬ ‫َ‬ ‫َ َ َ ْ‬ ‫َ‬ ‫َ‬‫ات َالْعب َُد َانْ َقطَ َع َعملَُو َإََِّل َ ِم َن َثَََل ٍ‬
‫ْ‬ ‫َ َُ‬ ‫َ‬ ‫]‪َ [Ibn Mājah‬إ َ َ َْ‬
‫َ‬ ‫م‬ ‫َ‬ ‫ا‬‫ذ‬‫َ‬ ‫ِ‬
‫يَ ْدعُوَلََوُ ]‪[Muslim‬‬
‫• قال َابن َرشد َاجلد َف املقدمات َاملمهدات‪َ :2/407 ،‬األحباس َسنة َقائمة‪َ ،‬عمل َهبا َالنيب ًَملسوىلص َواملسلمون َمنَ‬
‫بعده‬
‫• قالَجابرَ]ههنعيضر‪" :‬ماَأعلمَأحدَاًَذاَمقدرةَمنَأصحابَرسولَهللاًَملسوىلصَمنَاملهاجرينَواألنصارَإلَحبسَما َلًَمنَ‬
‫مالوَصدقوَموقوفةَلَتشرتىَولَتورثَولَتوىب‪َ".‬أخرجوَأبوَبكرَاْلصافَف أحكامَاألوقاف‪15 ،‬‬
‫)‪Saturday, 27.11.2021 (22.04.1443‬‬ ‫‪Prof. A. B. Dogarawa - ABU Zaria‬‬ ‫‪15‬‬
 Concept of Waqf [cont’d.]

• Waqf is classified into three types often based on the intention of its
founders regarding its beneficiaries.

2
Family

1 3
Philanthropic Mixed

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 16


It serves as a means of establishing a natural
and practicable economic system, and helps in
achieving efficiency by transferring surplus
resources to those who lack capital.
َ‫اِلَيَ َِاةَالدنْيَاَ َوَرفَ ْعنَا‬
ْ َ‫ف‬
َ َِ‫يشتَ ُه َْم‬
[Q43:32] ‫ضاَ ُس ْخ ِرًَّّي‬
It helps in avoiding concentration of wealth in
a few hands, and encourages its circulation in
the society as widely as possible to narrow the
gap between the rich and the poor.
َِ َ‫يَ ْاألَ ْغنِي‬
[Q59:7] ‫اءَ ِمن ُك َْم‬
Saturday, 27.11.2021 (22.04.1443)
Why Zakah and Waqf?
It inculcates in a Muslim the fact that man has
created nothing; but he adds to the utilities of
things, thus must give a portion of it as the
right of the poor and needy for Allah’s sake.
َ ِ‫كَ ََْن َُنَقَ َس ْمنَاَبَْي نَ ُهمَ َّمع‬
ََ َ‫أ َُى َْمَيَ ْق ِس ُمو َن َ َر ْْح‬
ََ ِّ‫تَ َرب‬ َ‫َن َ َخلَ ْقنَا َ َِلُم َِِّمَّا‬ َ َ ‫اّلل َالَّ ِذي‬
ََّ ‫[ أ ََوَلْ َيََرْوا َأ‬Q24:33] ‫آَت ُك َْم‬ ََِّ َ ‫ال‬
َِ ‫وىم َ ِّمن َ َّم‬ُ ُ‫َوآت‬
ً ‫ض ُهمَبَ ْع‬
ِ ِ ٍَ ‫ضَدرج‬
ُ ‫اتَلّيَ تَّخ َذَبَ ْع‬ َ َ َ ٍَ ‫قَبَ ْع‬ ََ ‫ض ُه َْمَفَ ْو‬
َ ‫بَ ْع‬ َ‫َنف ُقوا َِِمَّا َ َج َعلَ ُكم‬ ِ ‫[ َوأ‬Q36:71] ‫ت َأَي ِدينا َأَنْعاما َفَه َم َ َِلا َمالِ ُكو َن‬
َ َ َ ْ ُ ً َ َ ْ َْ َ‫َعمل‬
ِ
[Q57:7]ََِ‫يَفِيو‬ ََ ‫م ْستَ ْخلَ ِف‬
It creates an atmosphere of love,
cooperation, goodwill and fellow feeling.
It enables everyone to get what is rightfully
his.
َِ ‫لسائِ َِل َ َوالْ َم ْحُر‬
َ‫[ َوآتُوا‬Q70:24-25] ‫وم‬ َّ ِّ‫ َل‬. ‫وم‬
ٌَ ُ‫ف َأ َْم َواِلِِ َْم َ َحقَ َ َّم ْعل‬ ََ ‫َوالَّ ِذ‬
َ َِ ‫ين‬
[Q6:141] ‫ص ِادَِه‬ َ ‫َح َّق َوَُيَ ْوََمَ َح‬
ََ ْ َ‫َك َْيَََلَيَ ُكو َنَ ُدولََةًَب‬
Prof. A. B. Dogarawa - ABU Zaria 17
ZAKAH AND WAQF IN LIGHT OF MAQĀSID AL-SHARĪ’AH

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 Zakah and Waqf in light of Maqāsid al-Sharī’ah
Religion Life Intellect Lineage Wealth
• Establishing the worship of • Share of the • Freeing the • Debtors (spent • Purification and
Darūriyyāt

Allah and having a deep sense poor and needy captives on family, or use sanctification
of duty towards Allah • Share of the • Some scholars to settle • Wealth
• Share of “Allah’s cause” wayfarer accept ransom disputing preservation,
• Attracting the heart of those payment for parties, preserve growth and
with inclination toward Islam abductees life, etc.) enhancement
Ease and felicitation (taysīr) Removal of difficulty (raf’ul haraj)
Hājiyyāt

• Minimum zakatable amount (nisāb) and zakah due • Providing needs of the Ummah for the realisation of
• Neither the best nor the worst of wealth social cohesion and self-sufficiency
• Realisation of mutual cooperation (at-Takāful al-Ijtimā’iy)

Good conduct (Akhlāq) Key to goodness and barrier to evil

Tahsīniyyāt

• Purification from stinginess • Supporting people and doing good to them

• Beautification of oneself with • Being one of the beloved of people to Allah and the best
the character of giving of people for meeting the need of Muslim

Based on Athar Maqāsid al-Zakah fī Ahkām al-Sharī’ah by Sa’ad bn Muqbil al-Harīriy

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ZAKAH, WAQF AND POVERTY ALLEVIATION

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 Zakah, Waqf and Poverty Alleviation

• Generally, countries apply different policies to alleviate poverty, such

as package of price policies, income and wage policies, and labour
market and production policies.
• These strategies focus on increase of government spending to
support the poor, increase in transfer payments, following the
policies of price discriminations in the health sector and increase in
public investment to enhance economic growth especially in rural
areas.

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 21

 Zakah, Waqf and Poverty Alleviation [cont’d.]
• While Zakah contributes to solving the problems of income inequality
and unemployment by increasing the income level of the poor thus
increasing their chances to invest and grow their wealth through using
their potentials and creating new job opportunities, Waqf takes care of
the education and health care needs of society.
Creating employment
opportunities
Reducing government
Encouraging education
Poverty reduction expenditure
and health care
Inducing economic Motivating saving, investment
growth and development and charity
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ZAKAH, WAQF AND GLOBAL DEVELOPMENTAL ISSUES

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 Zakah, Waqf and Macroprudential Policies
• Macroprudential policies are financial policies aimed at ensuring the
stability of the financial system as a whole to prevent substantial
disruptions in credit and other vital financial services necessary for
stable economic growth.
• In implementing macroprudential policies, a mixture of policies and
institutional reforms such as macroeconomic policies, incentive
policies, and regulatory policies that promote growth.

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 Zakah, Waqf and Macroprudential Policies [cont’d.]
• Zakah and Waqf help to generate a flow of funds to promote stable
economic growth through investments, employment and balanced
consumption.
• Their proceeds are used to influence the income level of poor people,
increase the consumption level in the national income due to increase
in purchasing power, and consequently increase the level of
production in the economy.
• Zakah and Waqf also play a vital role in promoting saving and
investment culture, provision of infrastructure, facilitating
empowerment, and enhancing security for the poor and vulnerable
persons.
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 Zakah, Waqf and Financial Inclusion

• According to United Nations Secretary-General’s Special Advocate for

Inclusive Finance for Development (UNSGSA), financial inclusion aims
to help people and communities meet their basic needs, such as safe
housing and shelter, nutritious food, healthcare facilities, education
and clean water facilities, and to promote financial institutions and
businesses which provide them with these services.

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 Zakah, Waqf and Financial Inclusion [cont’d.]
• As an instrument of wealth redistribution, Zakah guarantees
equitable distribution of income and wealth in society for achieving
social stability and solidarity, and enhancing the circulation of capital
in the economy thus promoting financial inclusion.
• Also, the provision to use Zakah proceeds to attract the heart of
non-Muslims who are inclined to Islam indicates its inclusiveness.
• Historically, proceeds of Waqf have been used to establish and or
administer educational institutions, healthcare services, mosques
and other places of worship, rest houses or inns, huge arable lands
producing fruits and agricultural products for beneficiaries, and
many other poverty alleviation projects and inclusive finance tools.
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 Zakah, Waqf and Sustainable Development Goals
• Six elements are considered essential for delivery of sustainable
development initiatives and programmes and are thus recognised
world-wide:
Element Objective
People To ensure healthy lives, knowledge, and inclusion of women and
children
Dignity To end poverty and fight inequality
Prosperity To grow a strong inclusive and transformative economy
Justice To promote safe and peaceful societies, and strong institutions
Planet To catalyse global solidarity for sustainable development
Partnership To protect our ecosystems for all societies and our children
Source: UNDESA’s Global Sustainability Report 2016
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 Zakah, Waqf and Sustainable Development Goals [cont’d.]
• A total of 17 SDGs were identified:
 Goals 1, 2 and 3 aim at ending poverty in all its forms everywhere and ending hunger
through effort to achieve food security, improved nutrition, promote sustainable
agriculture, and contribute to health and welfare.
 Goals 6, 7 and 13 aim at providing solutions for disaster preparedness through
provision of products and services to help improve disaster resilience.
 Goals 7, 13, 14 and 15 promote the manageability of global environmental issues by
contributing to climate change adaptation and mitigation.
 Goals 4, 9, 12 and 16 aim at empowering community and society through community
outreach and initiatives in culture and the arts, improve the lives of people in local
communities and become their most trusted corporate citizen.
 Goals 5, 8 and 10 support diversity and inclusion in private and public life through
respect for human rights and individuality of all stakeholders, supporting them in the
pursuit of their professional and personal development.
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 Zakah, Waqf and Sustainable Development Goals [cont’d.]
• A quick look at the 17 SDGs, it can be seen that Zakah and Waqf
perfectly address goals 1, 2, 3, 4, 6, 8, 9, 10, 11, 15 & 16 and have the
potential to address the other goals.

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ASSESSING SOCIO-ECONOMIC POTENTIALS OF ZAKAH AND WAQF

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 Assessing Socio-Economic Potentials of Zakah and Waqf
• The objectives of Zakah and Waqf are to set every Muslim free from
the enslavement of fear and hunger; reduce the gap between the
rich and poor; and solve dangerous socio-economic problems such
as poverty, unemployment, catastrophes and indebtedness.
• The history of Zakah and Waqf is very rich with impressive
achievements in serving the poor and enhancing the welfare of the
ummah:
 Umar bn Al-Khattāb and Mu’ādh on Zakah from Yemen
 Umar Ibn Abdil-Azīz and the governor of Egypt who wrote asking for what to
do with Zakah funds as nobody was eligible to collect it.
 Flourishing of Waqf during the Ottoman empire and its all-inclusive use.

Saturday, 27.11.2021 (22.04.1443) Prof. A. B. Dogarawa - ABU Zaria 32

Assessing Socio-Economic Potentials of Zakah and Waqf [cont’d.]
1) Waqf was used to build about 300 elementary schools in the Island of Sicily, and its
revenue was used for payment of teachers and supply of the needs of all the schools.
2) In Jerusalem, not less than 70 schools were funded by Waqf in 5th through to 7th century.
3) Waqf fund was used to establish high schools and general purpose universities in major
cities such as Quds, Damascus, Baghdad, Cairo and Nisapur as well as special purpose
universities like Al-Qarawiyin in Fez, Al-Azhar in Cairo, and Al-Nizamiyah in Al-
Mustansiriya, Baghdad.
4) Fatih Sultan Mehmet Waqf University (FSMWU) in Istanbul, Turkey from the historical
Fatih Sultan Mehmet Waqf established in 1470.
5) In Malaysia, Waqf was used to fully or substantially funded the establishment of
Albukhary International University, Kedah; Universiti Putra; International Islamic
University; Universiti Kebangsaan; Universiti Islam; and Universiti Sains Islam Malaysia .
6) Awqāf based Islamic banks, Islamic microfinance banks, takāful and sukuk have now been
proposed to be established in different parts of the world.
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Assessing Socio-Economic Potentials of Zakah and Waqf [cont’d.]
• The institutions of Zakah and Waqf are unique in their characteristics and
role in poverty alleviation and therefore represent Islam’s mechanism of SSN
Ukhuwwah
Shumūliyyah (togetherness)
(inclusiveness) Kafālah
(mutual support)

Spirits of Zakah
and Waqf
Tawāzun Ri’āyah
(balance) (welfare)
Manfa’ah
(benefit)

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CHALLENGES AND SUCCESS FACTORS FOR ZAKAH AND WAQF

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 Challenges and Success Factors for Zakah and Waqf Operators
 Challenges  Success factors
1. Lack of awareness about the importance and 1. Sincerity and commitment
operations of Waqf among prospective 2. Capacity building for members
contributors. 3. Sensitisation and mobilisation of existing
2. Absence of/inadequate relevant legislations. and prospective Zakah payers and Waqf
3. Unsettled fiqh issues regarding zakatable contributors
wealth and Waqf type and sources. 4. Accountability and feedback
4. Lack of organisational and administrative 5. Sound governance and risk management
competencies among managers. 6. Developing and teaching curriculum
5. Credibility issues and bad impression about Zakah and Waqf at tertiary level.
administrators and managers 7. Research and documentation
6. None payment of Zakah by many wealthy 8. Collaboration and experience sharing
people due to ignorance or love for wealth.
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 Thank you for listening

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