Zakat to finance sustainable development in Africa, opportunities and challenges
Shawgei Salah Ahmed
Thinking about financing sustainable development from zakat funds came as a result of the growth of an economy based on ideas and theories derived from the Islamic religion, especially after the economic shock that occurred in the first decade of the twenty-first century.
22% of the world’s population is Muslim, and Islamic finance was estimated at $2 trillion in 2015. The Islamic finance industry has expanded rapidly over the past decade, rising by 10-12% annually. Experts had expected that these assets would exceed 3 trillion dollars by the year 2020, and the value of Zakat alone likely to reach 200 billion to 1 trillion dollars annually.
Therefore, the author tended the term zakat for sustainable development to express the commonality between the eight categories of zakat and the seventeen sustainable development goals that aim to bring about sustainable development in societies, in general, and societies in which Muslims live in with non-Muslims.
There are some commonalities between the sustainable development goals and zakat; what reflects a lot of The Sustainable Development Goals are Islamic values, especially in matters of poverty alleviation, reducing hunger levels, working to distribute money, promoting health, working on cooperation and building partnerships for development.
All of these issues share the values of zakat and the goals of sustainable development.
Good development requires a set of difficult decisions and radical changes, from the nature of people to the age-old fear of the new, to underestimating the new until it proves its usefulness and worthiness, to time and place, and those benefiting from the prevailing conditions, no matter how bad.
Those beneficiaries will use all their strength for the sake of everything remaining as it is, therefore, more research and studies are needed to persuade decision-makers in Africa to change ways of thinking for the sake of social, economic and environmental development stemming from non-Western foundations, which is the next challenge that must be faced.
Zakat and economic development
Economic development from an Islamic concept can define a group of activities aimed at achieving a measure of material prosperity appropriate to open up aspects of the human personality, in a way that qualifies it to fulfill the right of succession on the land.
In general, economic development refers to: investing in new ideas, transferring knowledge, depending on the good performance of economic, political and social institutions, and on cooperation between the public and private sectors.
The African continent is one of the world’s continents with the most wasted wealth.
The value of the money that had left the African continent during the three decades preceding the year 2009 CE, according to the most moderate estimates, is about $ 1.4 trillion, of which between (1.2 and 1.3 trillion) was classified as Illegal money; in total, that amounts to about 29 billion dollars annually during the period between (1970-2008 ).
Zakat and environmental development
Most African countries constitute primary resources as more than 50% of the structure of their exports, but there are countries where this percentage exceeds 90%, such as: Central African Republic, Burundi, Ethiopia, Mauritania, Sudan, Mozambique, Burkina Faso, Guinea Bissau, Niger, and Sierra Leone. These natural resources participate with zakat in their development in the fields of agriculture and livestock.
Zakat and social development
The success of development plans in Africa requires providing social security, and for the African citizen to assume his/her responsibility in building and participation, as well as the urgent need for bold investments to support the infrastructure and accomplish basic projects.
This can be accomplished by mobilizing the self-efforts of the African peoples who pay zakat, because the state of poverty has worsened.
According to the Human Development Report 2013 issued by the United Nations Development Program, the countries that had recorded the highest percentage of poor population – according to the Multidimensional Poverty Index – are: Ethiopia, 87%, Liberia, 84%, Mozambique, 79% and Sierra Leone 77%.
These African countries did not achieve the goals related to reducing poverty by half by the end of 2015, as the percentage of the population in Africa (excluding the North African region) living on less than a dollar and a quarter of a dollar a day was about 56.5% in 1990, though it decreased by 2010 to 48.5%.
Despite the decrease in the poverty rate, the number of poor people in Africa increased to (414 million people) in 2010, compared to 376 million in 1999 and 290 million in 1990, and the continent’s share of the number of poor also increased on a global level from 15% in 1990 to 34% in 2010.
Africa, the only Muslim continent according to the majority of the population among the continents of world, addresses to benefit from zakat financing to combat poverty and hunger through zakat for sustainable development, as one of the many solutions proposed by the United Nations to reduce poverty in the developing world by focusing on two main dimensions.
On the one hand, it focuses on developing sectors in which the poor are concentrated, and on the other hand it works to empower those poor people and develop their capabilities to be able to get out of the cycle of poverty, and these sectors, according to priority, can be developed accordingly by focusing on zakat items.
Future challenges of Zakat and sustainable development
African countries should improve their public financial management in order to help achieve sustainable development goals, but this will require governments and their development partners to rethink their traditional approach in order to deal with complex public finance challenges in Africa.
These traditional patterns include not thinking about conducting surveys on the financial mass of Muslims who are able to pay zakat money in order to estimate the size of the funding that can be done through the financial budgets of those countries; “those countries” referring to either countries with Muslim minorities or countries that do not suppress Islamic practices.
All of this in general, but at a detailed level we must be discussing the challenges that may face the assumption that leads to the introduction of Zakat into practice in financing sustainable development in Africa.
Among these challenges are supporting organizations working in development, and how to build partnerships to work on the common areas between zakat and sustainable development.
Zakat and stimulating economics to finance sustainable development in Africa
At a rapid and effective level, there are no short-term solutions to build effective public administrations or to achieve sustainable development goals.
Strong in terms of production and consumption; this is what Zakat achieves in some of its aspects in terms of increasing zakat consumer spending by raising the qualitative distribution rates within the eight categories, in a way that leads to an increase in aggregate demand and a movement in aggregate consumption in the national economy; in a way that contributes to changing the levels of recession and deflation and returning to normal growth conditions in the national economy.
Zakat and agricultural revitalization to combat poverty and hunger in Africa
Zakat can be an effective tool in combating hunger and poverty by stimulating food-producing agriculture in African countries, and by food we mean the basic sustenance on which the population depends, such as wheat, millet, rice and other foods.
The main reason for the limited agricultural production in Africa is related to the lack of investment demand.
In the field of agriculture – be it at the governmental level or at the level of organizations – if Africa wants to benefit from the new international interest in its agricultural lands and the increasing demand for food, it is necessary for it to establish a modern agricultural industry.
According to World Bank estimates, Africa loses from 1% to 2% of its GDP annually due to its weak infrastructure.
Zakat can be effective if it is properly directed in agricultural development in Africa by adopting policies directed towards specific sectors, with clear management mechanisms distinguished by the development plan to prevent financial and administrative corruption.
In the final outcome, zakat guarantees the achievement of development in the unique Islamic concept, which is not defined by a place or time, as it plays an effective role in raising the level of economic activity through the direct effects exercised on the level of saving, stimulating investment, expanding the market, hoarding to prevent the erosion of wealth, and prioritizing the directing of this wealth into investment spending in order to compensate for what is taken out of it.
Shawgei Salah is a researcher, writer, environmentalist and a member of the Young African Leaders Summit (YALS). He can be contacted at Shwgy2000@gmail.com