The Limits of Generosity: A Perspective by Isiaq Ajibola

In elite Nigerian circles, it is common to encounter successful Muslims who navigate their lives with careful planning. They budget for education, retirement, household expenses, and religious pilgrimages months in advance. Their savings are intentional, investments diversified, and their generosity spans not only to family and community members but also includes mosque projects and assistance with school fees and medical expenses.

Despite this charitable spirit, a significant number within this demographic fail to grasp, or choose to overlook, the essential requirement of Zakat, one of Islam's core pillars.

My interest in this issue is not merely theoretical or ethical; it stems from my active role as a council member with the NASFAT Agency for Zakat and Sadaqat (NAZAS), which has successfully gathered and distributed nearly ₦1 billion through organized Zakat and Sadaqat efforts across Nigeria since 2014.

Interactions with affluent community members have revealed a stark reality—misconceptions abound regarding who is eligible to pay Zakat, compounded by uncertainty in its calculation and distribution. Despite a considerable Muslim middle and upper class in Nigeria, the number of compliant contributors remains surprisingly low.

In a nation where approximately 56 percent of the populace identifies as Muslim (according to Pew Research Center), the collection of Zakat remains disappointingly low. For instance, in 2024, five leading Zakat organizations in Nigeria distributed around ₦736 million to over 4,200 beneficiaries—a modest sum when compared to the potential of the Muslim demographic.

On a global scale, the trends are similarly concerning. Research indicates that although 85 to 95 percent of Muslims fast during Ramadan and 70 to 85 percent engage in daily prayers, only 20 to 40 percent of those eligible fulfill their Zakat obligations. This metric shows that Zakat is the least practiced of the five pillars of Islam.

This underperformance can be traced back to a significant knowledge deficit among Muslims eligible for Zakat. While Nigerian Muslims display an innate generosity, this goodwill cannot replace the mandated duty of Zakat. At this juncture, we find ourselves asking how much generosity is truly enough. This confusion detracts from Allah's explicit command stating Zakat is the third pillar of Islam, alongside faith (Iman), prayer (Salat), fasting during Ramadan, and pilgrimage (Hajj).

Moreover, the purpose behind Zakat transcends mere charity; it is a comprehensive moral, social, and economic system poised to cleanse wealth, uplift society, and deepen faith.

The Zakat requirement stipulates that a set rate of 2.5 percent of one’s net wealth must be contributed once it surpasses the nisab threshold and has been held for a full lunar year. The nisab, set according to the gold standard advocated by Prophet Muhammad (SAW), is quantified at 87.5 grams of gold, equivalent to around ₦19.1 million at the current exchange rate. Consequently, anyone whose total eligible assets have been sustained for a year and meet or exceed this threshold is obligated to pay Zakat.

Understanding how to calculate Zakat is critical. It does not merely depend on having this amount in a single savings account; rather, one must sum all working assets and deduct immediate liabilities.

Identification of zakatable wealth is essential. Such assets include:

1\. Cash and Cash Equivalents: This encompasses money stored at home, funds in bank accounts, mobile wallets, and holdings in foreign currencies converted to Naira.

2\. Business Assets: Any goods or stock intended for sale and receivables are counted, while fixed assets like buildings and equipment are excluded.

3\. Gold and Silver: Wealth held in gold or silver, including jewelry, is zakatable, applying the current market valuation.

4\. Shares and Investments: This sector creates confusion as it involves ownership stakes in companies, including those listed on the Nigerian Exchange, along with mutual funds, Sukuk, and even digital currencies.

Following this, immediate liabilities such as outstanding rents, utility bills, school fees, and other short-term debts must be deducted. Long-term debts that are not due immediately are generally not factored into this calculation.

Applying the 2.5 percent rate to the resulting net amount or dividing it by 40 gives the necessary Zakat due. Once the net wealth meets or exceeds the nisab (₦19.1 million), Zakat becomes mandatory.

Among Muslim elites, the question is seldom about poverty but often about a casual approach towards fulfilling this obligation.

Many believe they fall below the nisab after glancing at their account balance alone. However, Zakat is assessed based on accumulated wealth—cash reserves, stock holdings, business capital, and receivables are equally considered. Though the nisab appears daunting at approximately ₦19.1 million, a more thorough aggregation of assets often brings individuals over the threshold.

Fragmentation of wealth contributes to misperceptions of eligibility; assets scattered across different channels may seem less than they are when assessed individually.

Reaching the nisab is not an unrealistic ambition for many; the difficulty lies more so in the disciplined effort required to tally what one possesses personally and within the business.

Zakat, when adhered to, could facilitate a structured and equitable redistribution of resources in a society where wealth distribution remains heavily skewed.

It may be time for Muslim elites to employ the same diligence towards Zakat that they exhibit with other Islamic practices.

May Allah grant us the understanding, integrity, and bravery required to fulfill this vital duty. May He accept our compliance and cleanse our wealth. Ameen.