‘The role of Zakat in the provision of social protection’ webinar took place on 15 January 2019. It aimed to contribute to the debate on state-provided social protection systems based on Zakat, one of the five pillars of Islam. Zakat is considered a religious duty for all Muslims above a minimum wealth threshold to help those in need through financial or in-kind contributions.
The event is part of a series featuring experts on social protection in the Middle East and North Africa (MENA) region, organised by the International Policy Centre for Inclusive Growth (IPC-IG) and the UNICEF MENA Regional Office. The event was moderated by Buthaina Al-Iryani (UNICEF MENA Regional Office) and included the following panelists:
- Mr. Elamin Ali (Sudanese Zakat Chamber), who provided an overview of Zakat in Sudan, where Zakat contributions are mandatory.
- Mr. Zine Barka (Université de Tlemcen), who presented his research on the possibility of using Zakat-funded transfers to alleviate poverty in Algeria.
- Mr. Mohammad Pournik (UNDP), who closed the event, providing insights into the topic, based on his work experience in the region and knowledge on the topic.
The Zakat Chamber in Sudan
The Sudanese Zakat Chamber is considered one of the main institutions providing social protection through cash transfers and other benefits. These services are financed through Zakat contributions from individuals, which are collected from the following resources: gold, silver and other metals, agricultural outputs, animal resources, commercial profits and gained money (from selling and using assets).
In 2017, 71% of the Sudanese Zakat fund was allocated to the poor and the needy, while 4% was transferred to indebted persons, 0.5% to wayfarers (travelers who lost their money), 3% for advocacy, 2% in the cause of Allah, 15% for those who work for Zakat, and 4.5% for administrative costs.
Zakat policies aim to give priority to the poor, orphans, widows, the sick, the disabled, older persons, and university students from poor households. In addition, they support capacity development centers for women and young people. The poor are identified by the Zakat Chamber based on a poverty census conducted in 2011, which identified 2,291,789 poor households, divided into three kind of categories:
- Extreme poor: 330,704
- Very poor: 1,729,449
- Poor: 231,637
The services offered by the Zakat Chamber can be divided into three main axes:
- Social security: Addressing the essential needs of poor and needy persons, by sponsoring students from poor households, providing health insurance and supporting disabled and older persons and those with special needs.
- Social Development: Services and productive projects.
- Small and microenterprise business projects: Technical and administrative trainings.
Between 2015 and 2017, 4,461,739,986 Sudanese Pounds were allocated to the first axis. Mr. Elamin explained how the allocations to each axis change each year based on the needs and problems that these segments face.
Zakat as a complement to cash transfers in Algeria
Mr. Zine Barka began his presentation by providing some background information on Algeria and Zakat. He highlighted that many studies in other Muslim-majority countries have documented the positive link between Zakat and poverty alleviation. Against this background, his research explored Zakat-funded cash transfers as an additional policy to fight poverty in Algeria.
Persons entitled to receive Zakat are mentioned in the Quran and are distributed according to the Ministerial order as follows:
- 50% goes to the Fuqara (the poor) and the Al-Masakin (the needy);
- 37.5% is directed to investments;
- 12.5% is for the management of Zakat Fund expenses.
The graphs below show the number of beneficiary families and the amount of Zakat collected from 2003 to 2013:
Mr. Zine closed his presentation by highlighting that one of the main challenges of Zakat lies with the corruption in the disbursement of Zakat due to nepotism and political interference and the lack of an effective monitoring system. Consequently, some people do not want to pay Zakat through the government due to a lack of trust. Moreover, to amplify the impact of Zakat in alleviating poverty it is necessary to begin creating a database on the local population so that those most in need can be more easily identified.
At the end, Mr. Pournik commented on the two presentations by providing a comparison between the two countries and highlighting some of the main challenges related to the formalization of Zakat. While Algeria and Sudan are similar in terms of population size, their poverty profiles are quite different, with Sudan facing much higher poverty levels than Algeria. As a consequence, the target population of Zakat is significantly larger in Sudan. Regarding corruption, Mr. Pournik highlighted that the perception of injustice is likely to be widespread in Sudan as poverty levels are very high and Zakat only provides a tiny drop compared to what is needed. Finally, the formalisation of Zakat can increase people’s reluctance to pay Zakat. Since Zakat has always been perceived as a religious duty that people used to pay themselves without interference by the state, they might be reluctant to pay it through the State.
This blog post is published as part of a webinar series, which brings together the summaries of webinars organised by socialprotection.org and partners on a variety of themes related to social protection. If you have any thoughts on the topic discussed, we would love to hear them. Please join the Online Community Social Protection in MENA if you are interested in following the most recent discussions on the topic and add your comments below!