UK-based National Zakat Foundation (NZF) will work with the United Nations to develop a sovereign zakat mechanism in Somalia and Somaliland, according to Azim Kidwai, chairperson of NZF UK and director of NZF Worldwide.
The U.N. via the UNDP has mandated NZF to develop the mechanism, according to Kidwai. The NZF will work with local authorities, Islamic scholars and other stakeholders including the central bank of Somalia on how to collect and deploy zakat. The entity will hire a local team as well as work with claimants, scholars, and payees, noted Kidwai.
He said he hopes to sign the contract sometime this week and that it will take another three to six months to get the project going.
“We aim to work on a sovereign zakat foundation,” he said. “We’re looking at the funding, governance, development and transparency of the programme. We look forward to sharing this learning with the zakat bodies across the world.”
Non-Islamic countries, with the notable exception of Singapore, do not have national zakat authorities. The NZF collects and distributes zakat as a registered charitable foundation.
Kidwai said the upcoming sovereign zakat mechanism would seek to take advantage of mobile payment systems which are widely used in Sub-Saharan African countries like Somalia.
Among the more technical challenges is working out how to collect and deploy the funds.
“It will be interesting to facilitate zakat management in a rural context, assessing and facilitating payments in livestock—whether it’s for camels, sheep and cows—will be new to us,” said Kidwai. “In the western context our focus has been more on urbanised wealth classes.”
The project will be financially supported by the Swiss government and the Islamic Development Bank.
Established in 2011, the NZF is operational in the UK, Australia and Canada. It is finalising its website for the Netherlands and Switzerland it hopes will be operational by Ramadhan that starts towards the end of April.
Kidwai also said NZF plans to launch in Spain and Germany in 2021. The NZF is also in discussions with authorities in New Zealand and Trinidad to launch there in the future.
There are no definitive figures for the amount of zakat funds globally, with estimates pointing to anything from $76 billion to $120 billion to $1 trillion annually. In the UK, it is estimated to be around £300 million ($363.4 million).
There is a lack of reporting, and hence data, as to how much zakat is collected in Somalia and Somaliland. However, according to U.N. data in 2015, Al Shabab’s territory collected around $14 million in annual zakat. However, this data is not entirely accurate.
The World Zakat Forum is set to be held in Malaysia in September 2020. The Forum, made up of 29 Islamic and non-Islamic countries as indicated on its website, is scheduled to be held in the UK next year. The NZF works with member countries to develop mechanisms for zakat collection and distribution.
“We also aim to gain a bigger presence in Muslim-majority countries within the next 10 years,” said Kidwai. “The potential shift with Muslims in the way they deal with zakat as a more effective way to pay and deploy is a big area for growth.”
(Reporting by Hassan Jivraj; Editing by Emmy Abdul Alim email@example.com)