Quantitative Economic Evaluation of Zakah-Poverty Nexus in Kano State, Nigeria

Abstract

Nigeria is the largest economy in Africa and yet, a poverty-ridden oil-producing country. Thus, poverty remains a persistent macroeconomic challenge in Nigeria with devastating consequences, especially in the Muslim populated states like Kano. Surprisingly, Kano state, which is the most populated state in Nigeria with more than 15 million people, is one of the 14 most poverty-ridden states in Nigeria, despite the practice of Zakah institution (ZI). Therefore, this study empirically evaluates the revenue base and impacts of ZI on poverty alleviation in Kano state. Hence, 1,230 copies of questionnaires were administered and seven high profile Zakah payers were interviewed. Meanwhile, the data analysis was accomplished using descriptive statistics, correlation, and regression techniques, among others. The major findings indicate that the enormous revenue base of ZI for poverty alleviation exists, because of the significant Zakah payment by high ability Zakah payers. Similarly, ZI positively impacts on poverty alleviation. All in all, the findings lend credence to the Zakah-effectiveness hypothesis. Hence, this study recommends that Kano state government should exemplify more accountability and transparency in Zakah management. Moreover, a Ministry of Zakah and Hubusi Affairs should be established with the mandates of poverty alleviation and economic empowerment in the state.

Why Does Business Zakat Contribute Insignificantly to Achieving “SDG-1: Ending Poverty” in Nigeria? Evidence from Recordkeeping Practices

“…Fortunately, some of them were previous beneficiaries of the zakat. Similarly, Mustafa (2020) found that 707 zakat payers, who represented 78.6% of the respondents, were found to fall into the class of high ability zakat payers between 5,000-₦1 m and above. They believed this is a clear indication of a high level of the potential revenue base of the zakat institution in Kano state.…”

“…Earlier mentioned in Islamic accounting, inventories are measured at their market values for the purpose of zakat with a view to maximizing zakat revenue for the socioeconomic development of the Ummah (Abdul Rahman and Awang 2003, p. 34;Abdul Rahman 2007, p. 97;Awang and Mokhtar 2012, p. 289). In specific, Mustafa et al (2020) established that lack of proper recordkeeping of zakat revenue by the Kano State Zakat and Hubsi Commission is among the major problems of zakat institution in the state. This contributes significantly to low zakat collections.…”

“…Poverty remains a major macroeconomic problem in Nigeria, particularly in Muslim-dominated states (Mustafa et al 2020). Hence, the dethroned Emir of Kano and former Governor of the Central Bank of Nigeria, Muhammad Sanusi II, cautioned the people of Northern Nigeria region to change their culture, otherwise, they would continue to remain backward and in extreme poverty (Gusau 2020).…”

“…Many Nigerian studies, such as Mustafa and Maiyaki (2011), Mustafa and Idris (2015), Mustafa et al (2017Mustafa et al ( , 2018, among others, justified that the potential of zakat were yet to be utilized in such a way as to eradicate poverty in Nigeria. Recently, Mustafa et al (2017Mustafa et al ( , 2020) believed that Kano state has the potential to generate at least ₦25billion per annum as zakat revenues.…”

Optimizing the Use of Zakat, Infaq, and Alms Funds Based on the Empowerment of Pesantren

“…Zakat in the perspective of social interests is managed in two ways, namely consumptive and productive [7], [8]. Management in productive activities aims to improve the welfare and economic independence of the people [9], [10]. Zakat is one of the characteristics of the Islamic economic system which contains the principle of justice [11], [12], namely the transfer of income from muzakki to mustahik [13], [14].…”