Zakat and Waqf Administration in Nigeria: A Strong Case for Adopting Twelve (12) Global Best Practices!

By Engr. Kabiru el-Hussain Rumah
Jakadan Rumah

No doubt Zakat and Waqf Administration, in Nigeria, especially, if effectively, efficiently and economically reformed and transformed, by adopting the following twelve (12) national and global best practices, can go along way, in ensuring and assuring that, Zakat and Waqf alone, have significantly complimented, if not completely overtaken the financing of education, healthcare and social welfare of the people, from the governments of Nigeria and across all levels of government and governance, especially now that, there is a global political yearnings and aspirations, for both lean government and lean governance, at one hand and Simple, Moral, Accountable, Responsible and Transparent (SMART) government and governance, at another hand!

The following are the twelve (12) suggested Zakat and Waqf Reforms urgently needed in the Zakat and Waqf Institutions of Nigeria:

*1. Reform Number: 1 – the need to make separate and distinct Zakat and Waqf OPERATIONS, from Zakat and Waqf REGULATIONS!*

The above therefore means, there should be a separate organisation, in each applicable State of Nigeria, that REGULATES the administration of both Zakat and Waqf and other aspects and dimensions of the Islamic Social Finance (ISF), in the State and this organisation should be separate and distinct, from other Public and Private Zakat and Waqf Institutions, that actually engage in the actual OPERATIONS of Zakat and Waqf and other aspects ISF in such State!

The current practice whereby Zakat and Waqf Commissions, Boards, Committees and Authorities, in Nigeria are both Zakat and Waqf OPERATORS and at the same time Zakat and Waqf REGULATORS, in almost all the States of Nigeria, had fortunately or unfortunately, contributed, in the poor development of the Zakat and Waqf Sector and hence among the reasons, why the potentials and promises of Zakat and Waqf are little felt, in most of these States of Nigeria!

It may interest some of us to know that, one reason, for the rapid development of Islamic Commercial Finance (ICF), in Nigeria, is the deliberate and strategic separation of the OPERATIONS and REGULATIONS of ICF – the Federal Government of Nigeria (FGN) and its statutory agencies, such as CBN, NDIC, SEC, NAICOM etc being the REGULATORS, while the private sector being the OPERATORS of ICF – I believe if the same approach is adopted to the Islamic Social Finance (ISF), especially the Zakat and Waqf Sector, the Sector would definitely be transformed, from a dirty jewels, to one that glitters and for the benefits of all and sundry, in Nigeria!

*2. Reform Number: 2 – the need to make separate and distinct Zakat and Waqf MANAGEMENT, from the Zakat and Waqf GOVERNANCE, in Nigeria respectively!*

Zakat and Waqf Institutions are undoubtedly a trust based institutions and hence, there is an urgent needs, to ensure another tier or level of accountability, to the administration of Zakat and Waqf, through making a Zakat Management Committee (ZMC) separate and distinct, from the Zakat Governance Board (ZGB) – the former being accountable to the latter – this is with view, not only to improve transparency and accountability – the hallmarks of Zakat and Waqf administration – but equally to counter the Agency Problem associated with Zakat and Waqf administration in Nigeria – Agency Problem occurs, when Zakat Management Committees (ZMC) pursue other personal goals, apart from the goals of the Zakat Payers (Muzakkis) and Waqf Founders (Wakifs) respectively!

The current practices, in most States of Nigeria, whereby the Executives of the Zakat and Waqf Commissions, Boards, Authorities and Commitees, are the REGULATORS and the same time MANAGERS and GOVERNING BOARDS of such Commissions, Boards, Authorities and Commitees, had actually left much to be desired and asked, from such Commissions, Boards, Authorities and Commitees and in terms of such good governance virtues, as accountability, integrity, morality, responsibility and transparency!

*3. Reform Number: 3 – on the need for a dedicated Shari’ah Supervisory Boards (SSBs), for the Zakat and Waqf Commissions, Boards, Authorities and Commitees in Nigeria!*

I always ask whom it may concern, on why do we have a FORMAL Advisory Committees of Experts (ACEs), another name for SSBs, for Islamic Commercial Finance Institutions (ICFIs), but not for Islamic Social Finance Institutions (ISFIs), such as Zakat and Waqf Commissions, Boards, Authorities and Commitees, in Nigeria and with view to ensure that, the Shariah Governance of such Commissions, Boards, Authorities and Commitees and in terms of not only Zakat and Waqf administrations, but equally, in terms of their other corporate activities, such as recruitments, internal controls, promotions, appointments, social responsibilities, cultures, public relations etc that requires Shariah Review!

If ICFIs can have SSBs/ACEs peculiar to their legal form and character, I personally see no reason why ISFIs cannot have a FORMAL and publicly known SSBs/ACEs, for their legal form and character also, especially looking at the strategic roles SSBs/ACEs can significantly play, in not only ensuring the Shari’ah Governance (and hence reducing Shariah Governance Risks of these ISFIs), but equally, in boosting the confidence of the general public, towards such Commissions, Boards, Authorities and Commitees, as the case may be – indeed, Zakat and Waqf Institutions like I said earlier are trust based institutions and hence people must trust and have confidence, in them, for them to function effectively, efficiently and economically!

*4. Reform Number: 4 – the need for Islamic Poverty Line (IPL), for Zakat and Waqf Administration, in Nigeria!*

I always ask whom it may concern, on how do Zakat and Waqf Commissions, Boards, Authorities and Commitees, in Nigeria OBJECTIVELY and certainly not SUBJECTIVELY know, who is actually a Poor and the Needy and as the two (2) among the eight (8) Quranic Beneficiaries of Zakat (Mustahiqs)? And I am yet to get a reliable answer on this!

The above therefore means, it’s high time, Zakat and Waqf Institutions, in Nigeria, both public and private, learn to develop a quantitative Shariah compliant Poverty Line and in light of Islamic conceptions of who is actually a poor and how is poor different from the Needy and with view to guide them, in not only identifying a real poor, but equally, in the distributions of the Zakat and Waqf products and services, to them effectively, efficiently and economically – IPL can be developed just like the Conventional Poverty Line (CPL), using either incomes, expenditures, capabilities, energy intake or other poverty measures or approaches, as the case may be!

The above is where Zakat and Waqf Institutions, in Nigeria, can strategically benchmark or collaborate, with the National Bureau of Statistics (NBS) of Nigeria and State Bureau of Statistics (SBS) of the States of Nigeria, as the case may be – I know reliably NBS and Kaduna State Bureau of Statistics (KSBS), for example, have a robust statistical frameworks and methodologies, for not only measuring poverty and vulnerability, but equally, in computing the National Poverty Line (NPL) for Nigeria and State Poverty Line (SPL), for Kaduna State respectively – Zakat and Waqf Institutions can benchmark all these statistical techniques and tools, with view to develop an Islamic Poverty Line (IPL) and with view to guide their administration of Zakat and Waqf, in their respective States!

*5. Reform Number: 5 – the need to develop Zakat and Waqf Databases, with view to improve Zakat and Waqf Administration, in Nigeria!*

There should be a central Zakat and Waqf Databases, in the applicable States of Nigeria, and for both Zakat Payers (Muzakkis) and Zakat Recipients (Mustahiqs), at one hand and Waqf Founders (Wakifs) and Waqf Beneficiaries (Mauqoof Alaihim), at another hand and with view to avert the ugly trends of both Double Zakat (DZ), at one hand and Double Zakat Beneficiary (DZB), at another hand and as well as with view to improve the economy, effectiveness and efficiency of Zakat and Waqf administration in Nigeria!

The above is where Zakat and Waqf Institutions, in Nigeria, can benchmark such good managerial practices of our contemporary Tax Administration and Administrators respectively, and such as Tax Identification Number (TIN), for both Zakat Identification Number (ZIN) and Waqf Identification Number (WIN), at one hand and Tax Clearance Certificate (TCC), for Zakat Clearance Certificate (ZCC) and Waqf Registration Number (WRN), at another hand and as well as for other good tax terminologies and nomenclatures respectively!

*6. Reform Number: 6 – the need to make separate and distinct Zakat and Waqf Collections, from Zakat and Waqf Distributions, in Nigeria!*

Equally also, because Zakat and Waqf Institutions are trust based institutions, separating Zakat and Waqf Collections, from Zakat and Waqf Distributions, can go along way, in reducing, if not eliminating the financial incentives to mismanage and misappropriate Zakat and Waqf Funds respectively, and while boosting the public confidence, in such Zakat and Waqf Institutions respectively!

It may interest some of us to know that, in the Kingdom of Saudi Arabia, for example, Invisible Zakat, is collected by the Ministry of Finance, through an agency called “Zakat, Tax and Custom Authority (ZATCA)”, while the Zakat is distributed by the Ministry of Social Affairs and Employment, through an agency called “Social Security Office”, while the Visible Zakat, is administered by a Special Committee consisting of both the Ministry of Finance and Ministry of Home Affairs of the Kingdom respectively!

*7. Reform Number: 7 – the need to understand the fact that, Zakat and Waqf, though are religious institutions, but nevertheless are more of economic institutions than religious institutions!*

The above understanding of Zakat and Waqf Institutions is strategically key, especially, in not only recruitment of personnel, in such institutions, but equally, in the political appointments of both the Members of the Zakat Management Committees (ZMC), at one hand and Zakat Governing Boards (ZGBs), at another hand and of such Zakat and Waqf Institutions respectively!

It may interest so many of us, to know that, with proper Shari’ah Supervisory Boards (SSBs) constituted and appointed, for a given Zakat and Waqf Commissions, Boards, Authorities and Commitees, for example, an Economists would likely perform more better, as the Executive Secretary (ES) of either the Zakat and Waqf Management Committee (ZMC) or the Chairman of the Zakat and Waqf Governing Boards (ZGBs) of such Zakat and Waqf Commissions, Boards Authorities and Commitees, than an Islamic Scholar, with little or no knowledge of Economics, especially Economics of Zakat and Waqf respectively – indeed Zakat and Waqf are more of Economics than Islamic Studies and this is one strategic aspects and dimensions of Zakat and Waqf administration that many Politicians, in Nigeria are clueless about and that is why, they always politically failed to put a round peg, in the round hole, in the political appointments of Experts to manage and govern such institutions and no wonder the presence of such Zakat and Waqf Institutions are hardly felt, in Nigeria!

*8. Reform Number: 8 – the best roles and responsibilities of Governments, with regards to Zakat and Waqf administration, in Nigeria!*

As far as I am concerned, the best political role and responsibilities of Governments, especially State Governments of Nigeria and with regards to the administration of Zakat and Waqf in Nigeria are three (3):

a. Government to politically establish and enact a LEGAL FRAMEWORKS, for the administration of Zakat and Waqf, in the State and amend it, from time to time and with view to bring such laws, in tandem with the realities of Zakat and Waqf administration, in the State and global and national best practices – in line with the global conventional trends, this law can be politically consolidated, to be the Islamic Social Protection Law (ISPL) and with view to accommodate other instruments and tools of Islamic Social Finance (ISF) respectively;

b. Government to establish a REGULATORY FRAMEWORKS, for the administration of Zakat and Waqf, in the State – by regulatory frameworks, I mean a dedicated Governmental Agency, that would regulate the operations (and operators), management (and managers), as well as governance (and governing boards) of Zakat and Waqf Institutions, in the State, by setting standards, guidelines, manuals, code of conducts, dispute resolutions, sanctions, etc with regards to the administration of Zakat and Waqf, in the State – *of course there should be a dedicated Shariah Supervisory Boards (SSBs) to ensure the Shari’ah Governance and Reviews of all the regulations of this Zakat and Waqf Regulatory Agency* – again; in line with the global conventional trends, this Governmental Agency can be reffered to as “Islamic Social Protection Regulatory Agency (ISPRA)” and with view to accommodate other instruments and tools of Islamic Social Finance (ISF) respectively; and

c. Government to establish its own separate Department or Unit, for the actual Zakat and Waqf operations or initiatives of the Government and in line with the regulations enforced by the State Zakat and Waqf Regulatory Agency – again; in line with the global conventional trends, this Department can be called “Islamic Social Protection Department (ISPD)” and with view to accommodate other instruments and tools of Islamic Social Finance (ISF) respectively!

Any State Government that does that, had indeed solve most of the political challenges of the Islamic Social Finance (ISF), in the State!

*9. Reform Number: 9 – on the urgent need for the institutionalization of “Zakat on Salary”, at one hand and “Cash Waqf”, at another hand, in Nigeria!*

Instituting both Zakat on the consolidated salaries and wages, that reaches Nisab (Zakat Benchmark) at one hand and Voluntary Cash Waqf (VCW), at another hand and enforcing it, among all the salaried and waged workers, in each State in Nigeria, can go along way, in not only eradicating poverty and vulnerability, in such State, but equally, in reducing the widening gaps between Haves and Have Nots, in such States of Nigeria!

Interestingly, Zakat on Salary and other Incomes, from Professions and Vocations are global best practices, in most of the Muslim majority countries, such as in Asia, Middle East and North Africa!

*10. Reform Number: 10 – the need to transform the Zakat and Waqf Commissions, Boards, Authorities and Commitees, to Simply Islamic Social Protection Commissions, Boards, Authorities and Commitees and in line with the global conventional trends!*

There is a global conventional trends, championed by such Multilateral Institutions, as the International Labour Organisation (ILO), World Bank, UNDP etc, towards the consolidations of all forms and dimensions of supports, interventions, assistances, etc, to both the poor and the vulnerables, into simply “Social Protection”!

In the above regards, harmonizing, integrating and consolidating other tools and instruments of Islamic Social Finance (ISF), apart from only Zakat and Waqf and including the following:

# Islamic Alms Giving (Sadaqah);

# Benevolent Loans (Qard Hassan);

# Islamic Guardianship (Kafalah);

# Islamic Social Feeding (nfaqah);

# Islamic Social Guarantee (Dhumanah);

# Islamic Social Enterprises;

# Islamic Crowd Funding;

Etc

May give rise to “Islamic Social Protection System (ISPS)” and through these integrated systems, I personally doubt, if there is any social problems or challenges of the Muslim Ummah that cannot be tackled and surmounted respectively!

*11. Reform Number: 1 – the need to integrate Islamic Commercial Finance (ICF) with Islamic Social Finance (ISF), in Nigeria!*

If there is one overarching challenge to the realisation of the potentials and promises of Islamic Social Finance (ISF) is the challenge of “DONOR FATIGUE” – only God can give you today, tomorrow and to eternity, but certainly not human, as such integrating ISF with ICF, in such a way and manner that, the former can access the latter, with view to access finance, and to finance its socioeconomic activities is key!

Put differently, Zakat and Waqf Institutions should no longer wait for philanthropic donations and alms, from well meaning individuals, to finance its socioeconomic activities; it’s rather a high time, such Institutions learn to access Islamic Financial Markets (IFMs), at one hand and Islamic Financial Instruments (IFIs), at another hand and with view to access the necessary finances, to impact on people and the society positively!

Zakat and Waqf Institutions can for example access both IFMs and IFIs to get the necessary finances, to establish Awqafs, for example, use the usufructs and other sources of funds to service the loans and when they finish paying, then use the usufructs for a given social causes!

*12. Reform Number: 12 – the need to integrate the theories and practices of Zakat and Waqf administration, in Nigeria!*

The above means, there is need to introduce what is known as “Triple Helix Model” – consisting of the Zakat and Waqf Industry Operators, the Government and the Academia – in the administration of Zakat and Waqf, in Nigeria and with view to ensure basic and applied researches are carried out, financed and with view to solve the Zakat and Waqf administration challenges puzzles and problems, in Nigeria!

In this regards, a “Professorial Chairs” on Zakat and Waqf can be established, for the Zakat and Waqf Institutions, at one hand and a Two-Way Sabbaticals, for the Zakat and Waqf Managers and Academics, can equally be arranged and with view to share knowledge and experiences, at another hand!

Let me conclude by saying that, the above ten (12) Reform Proposals, if religiously and adequately introduced and instituted, can go along way, in the transformation of Zakat and Waqf administration in Nigeria and from a dirty jewels, to one that glitters, not only now and always, but equally to the benefits, rather demerits of all and sundry, in Nigeria! May Almighty Allah guides all the Zakat and Waqf Institutions, in Nigeria to these Reforms and many more and with to help the poor and the needy! Amin summa Amin!

God knows the best!

*©️ Engr. Kabiru el-Hussain Rumah is a Licenced Management Consultant and the Founder/CEO of Jakadan Rumah Foundation (JRF), an Islamic Social Enterprises (ISE), in Katsina State, the Home of Hospitality and can be reached through 08038473713 and elhussainikabiru@gmail.com respectively!*