SPECIAL

REPORT

Institutionalizing Zakat in Mauritania: Prospects

and challenges
On the 26th December 2022, the Council of Ministers in Mauritania approved a draft law to establish a fund for Zakat.
The institution's name is Beit Zakat which will be a milestone for the Islamic finance industry and Mauritania to
develop. Minister of Finance Isselmou Ould Mohamed M’Badi revealed that: "A working mechanism for the Zakat
institution will be defined and organized in a way that guarantees transparency in its management, builds bridges
of trust, reduces costs and ensures the achievement of the desired goals, religiously and worldly." DR VATIMETOU
MOKHTAR MAOULOUD writes.

Dr Vatimetou Mokhtar financial system (World Bank, 2021), Recommendations

Maouloud is a PhD holder
in Islamic banking and
finance from the
International Islamic
University of Malaysia. She is currently
a lecturer and researcher at the
University of Nouakchott. She can be
contacted at fatismed95@yahoo.fr.
Zakat is one of the five pillars of
Islam, and it is a compulsory charity
that God Almighty imposed on His
rich Muslim servants, which they pay
from their money and property at the
end of each year, to be distributed to
eight specific beneficiaries (Asnafs)
that the Quran has specified. Once the
wealth reaches the Nisab (a legally
determined amount of wealth) and
Hawl (one whole year), Zakat is
indispensable. Zakat's objective is
to purify the wealth and the soul
and increase the Barakah (blessing).
Zakat's main and central goal is to
maintain social equity and reduce
poverty among people because it
prevents wealth accumulation.
In Mauritania, since there is an
absence of a regulatory framework
that organizes the Islamic financial
institutions' operations, the Zakat
institutions will encounter several
obstacles, mainly in the process of
collecting funds, distributing funds to
the beneficiaries, managing the surplus
and administrating the operations.
Indeed, Zakat institutions need good
governance to invest the funds in
optimal ways to meet the beneficiaries'
needs. Any investment launched by the
funds of Zakat should be controlled
by a Shariah committee to ensure its
feasibility and compliance with the
Shariah rules.
Due to the fact that around 78% of
Mauritanians are excluded from the
they will find difficulties to trust Zakat
institutions since they are public
institutions. Also, Mauritanians are
100% Muslims; they prefer to give
their Zakat to their relatives personally
to fulfill the Shariah rules. However,
the state will find difficulties in
determining exactly the amount of
Zakat that everyone should give, since
more than 40% of funds are circulated
in the ‘gray market’, outside the
financial system.
Challenges
The main obstacles and challenges in
Mauritania for Zakat institutions are:
Lack of trust between the people
and the government: This is because
some people feel that public
institutions do not follow the rules
and objectives of their existence.
Social and cultural barriers:
Mauritanians prefer to give
Zakat to their relatives without
intermediaries.
Transparency of the reports of fund
distribution of Zakat institutions:
There is a lack of transparency of
Islamic financial institutions in
general, and Zakat institutions are
not an exception.
Regulatory framework: The absence
of a regulatory framework led to
the absence of Shariah committees
among several Islamic financial
institutions, making compliance to
Shariah rules a questionable matter.
Lack of management in governance:
Since the employees in Islamic
financial institutions are not well
trained in Islamic principles and
practices, their management system
is below expectations.
• In order to succeed in this new
experience, Mauritania needs to focus
on the transparency of the institution.
The collection and distribution of
Zakat should follow international
standards to Asnafs/beneficiaries.
Indeed, the government should pay
attention to this new institution and
specify the regulations to achieve
better administration and governance.
• Zakat funds should also be oriented
to investment on a non-financial
aspect such as capacity-building,
training and schooling of children
to transform them from receiving
from Zakat givers. Therefore, the
collection and distribution methods
should consider the significant effect
on the growth of the microbusiness
and entrepreneurship perspective
of the market to generate
productivity and sufficient turnover
in the income from the receiver.
Zakat institutions must ensure
transparency and accountability by
disclosing all their activities and
distribution methods to gain the
public's trust regarding Zakat fund
management.
• Public campaigns on awareness
should focus on potential Zakat
givers such as university students
and employees. Also, continuous
empirical research should be
conducted to discover better
practices in terms of managing
the distribution and the surplus
of the funds and benefiting from
the successful experiences of other
countries.
• Training for the managers and
employees of the institution on Fiqh
Zakat and its accountancy rules is
indispensable to manage Zakat
funds.

© 19 15th March 2023