The Socio-Economic Role of Zakat – The Case of Annaba Province

Khoualed Aboubaker
Senior Lecturer of Economics, Department of Economic Sciences, Badji Mokhtar University, Annaba, Algeria, e-mail: aboubaker.khoualed@univ-annaba.dz, ORCID ID: https://orcid.org/0009-0004-0042-0184

Almi Hassiba
PhD, Assistant Professor, Department of Economic Sciences, Badji Mokhtar University, Annaba, Algeria, e-mail: hassiba.almi@univ-annaba.dz, ORCID ID: https://orcid.org/0009-0001-7560-754X

Moumen Adel
Zakat Office Manager, Annaba Province, Ministry of Religious Affairs and Waqf, Algeria, e-mail: moumeneadel@gmail.com

Cite this article:

Khoualed, A., Almi, H., & Moumen, A. (2024). The Socio-Economic Role of Zakat – The Case of Annaba Province [Sotsialno-ekonomichna rol zakiatu – pryklad provintsii Annaba], Socio-economic research bulletin, Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 3-4 (90-91), pp. 67-88.

Abstract

The article investigates the role of Zakat as an Islamic financial tool with significant potential for socio-economic development. Zakat is considered an important financial resource and a rich source of income due to its diverse yields, varying rates, and comprehensiveness, covering both traditional and modern assets. Its direct contribution to development in various forms is notable. In this context, this study aims to explore the role of Zakat as an Islamic financial tool in supporting the socio-economic aspects of both Islamic and non-Islamic communities. To achieve this goal, the researchers conducted a field study at the Zakat Office located at the Directorate of Religious Affairs and Endowments in Annaba Province (eastern Algeria). The study employed a descriptive methodology, relying on a variety of tools including interviews, observations, reports, and statistics from the Directorate, in addition to analysing and discussing various previous studies. The study ultimately clarified the significant role of Zakat in supporting socio-economic indicators in Annaba Province through the financial allocations it provides to fund various consumption and investment activities for Zakat recipients in the province. However, the experience of the Zakat Fund in Annaba Province faces several challenges, notably the low collected yield, lack of resource diversification, and weak oversight and digitization. Therefore, this study substantiates the need for better management and strategic implementation of Zakat to enhance its efficiency. The study proposes recommendations to regulate the legal framework governing Zakat in Algeria, adopt new methods to invest Zakat funds, revive the benevolent loan program, and digitize the sector as a whole.

Keywords

Zakat; Islamic financial tools; development; supporting of socio-economic indicators; Ministry of Religious Affairs and Endowments; Annaba Province.

JEL classification: A130; Z120; DOI:https://doi.org/10.33987/vsed.3-4(90-91).2024.67-88

UD classification: 297.27

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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