Zakat, Aggregate Consumption and Poverty: Evidence from Egypt

This study aims to evaluate the impact of Zakat on aggregate consumption and poverty alleviation in
Egypt. The study introduces the concept of poverty and the strategies of poverty alleviation in a
conventional economy, and then discusses the concepts of poverty in Islam and the ability of Zakat to
eliminate poverty in the Muslim community. the objectives of the research are to show that for the
Muslim community to conduct Zakat as was commanded by God the almighty would put an end to
poverty in the community, which was failed to be done through policies and practices adopted by
governments and nations in the conventional economies. The most important results are the potential
Zakat collection in Egypt cannot eradicate poverty from the Egyptian economy and the other types of
charities may play an important role in eradicating poverty in Egypt. The study recommends the need
to pass legislation that requires the collection of Zakat from different sectors, organizations and
institutions as well as individuals. Finally, the study emphasizes the need to voluntary charities as
complementary tools in poverty eradicating. The study recommends also the Egyptian government to
monitor and control the processes of collecting and distributing Zakat where the more directed to the
poorest eligible (first of the eligible categories), the greater the effect on consumption then on poverty.

Author(s) Details

Hisham H. Abdelbaki
Professor of Economics, Department of Economics and Finance, Bahrain University, Bahrain and Department of Economics, Mansoura University, Egypt.

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