WAQF AND WAQF SYSTEM IN TANZANIA: CAN ISLAMIC BANKS / WINDOWS PLAY A ROLE?

WAQF (Endowment).

Waqf is a voluntary charity which has unique presence in Islam. Scholars have defined it differently. However, these definitions revolve around three basic elements.

1. Voluntary transfer of ownership of property or real estate, revenue, fruits, crops so that the yield, usufruct and other benefits thereof go to intended beneficiary.
2. The sincere purpose of such transfer is to please and seek Allah’s favor.
3. Neither can the property or assets be sold, inherited nor its usufruct used contrary to will of the owner/donor.

Waqf can be viewed as an institution for provision of public goods. Public goods are defined as goods that are non-excludable (not easily denied to un authorized consumers) as well as non rival (capable of being enjoyed by many consumers at once). Kuran argues that from 750 C.E, Waqf was a popular vehicle for provision of public goods as a pious foundation. He defined Waqf as an incorporated trust established under Islamic law by a living man or woman for the provision of a designated social service in perpetuity. This is an earliest definition given which date from a period after the birth of Islam.

The rules for establishing a Waqf is subject to various scholars opinion, however, there is no question that the preferred endowment should be immovable property. This goes hand in hand with the donor aims to have a long lasting entity which shall benefits the society and earn him rewards in the hereafter.

MOTIVES FOR WAQF.

There are five motives for the Waqf founders or donors to donate their properties. One, earning endless rewards in the hereafter as Waqf property is considered ‘Sadaqatun Jariya.’ Second, ensure greater security of property from confiscation by the state and third, enjoy reduced property tax. Fourth, asset laundering i.e. state officials who took government properties or other individuals would transfer them to waqf as a way of legitimatization of their actions. Fifth, to achieve personal status.

TYPES OF WAQF.

There are three main kinds of waqfs. The first kind is the Waqf Khairy or charitable waqf, which means withholding one's property and directing its revenues towards different philanthropic goals. The second kind of waqf is the Waqf Ahli or the family waqf. It means withholding the property to the benefit of the members of the family like the wife, the children, and the relatives. Finally, Waqf Mushtarak, or the joint waqf, which is targeting part of the withheld property towards philanthropy and the other part to the family.

SOCIAL-ECONOMIC SIGNIFICANCE OF WAQF INSTITUTION.

“The Ottoman society left the financing of health, education and welfare entirely to the Waqf system so much so that the following saying does not exaggerate its central importance: “Thanks to the Waqfs that flourished during the Ottoman Empire, a person would have been born into a Waqf house, slept in a Waqf cradle, eaten and drunk from Waqf properties, read Waqf books, been taught in a Waqf school, received his salary from a Waqf administration, and when he died, placed in a Waqf coffin and buried in a Waqf cemetery.”

The above quote is the best explanation of the role and significance of waqf institution in a country. Ottoman Empire enjoyed exclusive benefits of the institution during its reign. Kuran asserts that “At the end of the eighteenth century, it has been estimated, the combined income of the roughly 20,000 Ottoman awqafs in operation equaled one-third of Ottoman state’s total revenue, including the yield from tax farms in the Balkans, Turkey, and the Arab world.” This is due to the fact that taxes were collected from individuals cultivating Waqf land which constituted one third of all economically productive land in the Ottoman Empire. Furthermore, waqf system came to own and control variety of valuable assets such as commercial and residential buildings, shops and production facilities.

On the social aspect, Kuran says “by the end of the eighteenth century, in Istanbul, whose estimated population of 700,000 made it the largest city in Europe, up to 30,000 people a day were being fed by charitable complexes (imarets) established under the waqf system.” Leave alone those who enjoyed service of mosques, cemeteries, libraries, schools and universities, hospitals, orphanages and shelters including animals welfare centers established under waqf system. Due to its relevance, even non Muslims in Muslim countries established Waqf for the benefit of their communities.

These are remarkable achievements of waqf system in provision of public goods. As a result, Imtiaz rightly said, “today, almost every Muslim country has a Ministry that handles Awqaf and Islamic Affairs while Awqaf properties make up a considerable proportion of the social wealth in several Muslim countries.”

WAQF SYSTEM IN TANZANIA.

Waqf system is recognized in the laws of Tanzania mainland and in Zanzibar respectively. In the mainland, Waqf is governed by the provisions of Part XV of Probate and Administration Act, Cap 352 R.E 2002 which incorporates the Waqf Commissioners ordinance, cap 326. In Zanzibar, Waqf matters are governed by the Waqf Validating Decree, Cap 104 and Waqf Property Decree, Cap 103 as amended by the Waqf Property (Amendment) Decree, No. 12 of 1966.

Section 140 of Probate and Administration Act, defined the term "wakf" as “an endowment or dedication in accordance with Islamic law of any property within Tanzania for religious, charitable or benevolent purposes or for the maintenance and support of any member of the family of the person endowing or dedicating such property.”

Section 142 of the Act established Waqf Commission of Tanzania which must consists not less than eight persons appointed by the President whose majority members must be Muslim. Waqf commission duty is to register all property of a registerable Waqf and all trustees of such property, issue certificate of change of trustees, hold an inquiry and take over administration of Wakf when there is no properly constituted trustee of a Waqf or in case where any of the trustees act in an improper, unauthorized or unlawful manner. In any case, if the inquiry finds out the breach happened, the commission may declare the Wakf to be under it or appoint new trustee(s).

Despite good intentions of provisions to ensure intended purpose is met, this author couldn’t establish who is the chairman and the other members of Waqf commission in Tanzania. With prevailing misuse of Waqf properties in Tanzania over the recent years, no doubt the commission neither exists apart from the law books nor its duty performed in an impartial approach.
Just recently, popular Muslim weekly newspaper, An nuur reported on the successful end of the court case involving conman who wanted to confiscate Waqf properties located at Somali and Mchikichi-Kariakoo. If bold measures aren’t taken, many waqf properties will end up in the hand of conman and deprive people everlasting benefits of this public good.

Waqf institution in the country has taken many forms such as residential and commercial buildings, productive land, Mosques, Cemeteries plot, Books and libraries, Water Wells just to mention but a few. However, to the best of my knowledge no research available which shows the magnitude and value of Waqf properties in the country neither its social role has been systematically
studied.

ISLAMIC BANKS ROLE.

The experience of Malaysia shows that Islamic Banks can play development role of Waqf properties such as funding them in order to build or renovate Waqf properties in order to add more value to them. In Tanzania, where there is significant number of undeveloped Waqf land in prime locations, Islamic Banks/Window can raise funds or use its own funds and invest on the Waqf land turning it into productive entity such as residential/commercial apartments or a modernised agriculture farm land.

In Malaysia, Bank Islam has undertaken and performed development role through Cash Waqaf Deposit, Issuance of Sukuk as well as using financing approach to develop Waqf properties.