Waqf as a Poverty-Alleviating Instrument: Leveraging Shariah Governance Principles for Effective Implementation in Nigeria

Abstract

Despite the propagation of microfinance institutions and several government socio-economic intervention programmes, poverty remains a formidable obstacle to development in numerous communities, largely due to weak and corrupt governance institutions. The informal sector, with its multitude of entrepreneurs, stands as the primary source of employment but lacks financial leverage, compounded by the burden of high interest rates on bank loans. The current study explores the role of Waqf in alleviating poverty in Nigeria by leveraging Shariah Governance principles to ensure effective implementation. This study uses qualitative desk research, collecting data from academic papers and online resources. The critical literature review (CLR) method was utilized to analyze the collected articles and secondary data to unearth groundbreaking insights into the role of Waqf in alleviating poverty through leveraging Shariah Governance principles. The findings indicate that poverty and Waqf are perceived as symbiotic social problems and solutions, with Waqf deeply rooted in Islamic tradition involving the voluntary dedication of assets for societal betterment. Perceptions towards Waqf utilization for poverty alleviation are generally positive, but challenges such as mismanagement of funds and lack of transparency impede effective application. Shariah Governance principles serve as a robust framework for ethical guidance, ensuring that Waqf assets are managed and distributed following Islamic law and ethical guidelines. Despite its potential, Waqf-based poverty alleviation initiatives face several challenges, but Shariah Governance principles can mitigate them, ensuring the effective utilization of Waqf for poverty alleviation. The paper concludes with practical recommendations and discusses the limitations inherent in the study.