Keynote Speeches

FINANCE MINISTER TREVOR MANUEL'S WAQF CONFERENCE KEYNOTE SPEECH 17 August 2007

(Jointly Organised by: National Awqaf Foundation of South Africa (AWQAF SA), Islamic Research and Training Institute (IRTI, a member of the Islamic Development Bank Group (IDB), and Kuwait Awqaf Public Foundation (KAPF))

I want to thank the organiser's [ie the National Awqaf Foundation of South Africa, the Islamic Development Bank, the Islamic Research & Training Institute, and the Kuwait Awqaf Public Foundation] for inviting me to speak at this conference. I do so because I am aware of the good social objects that underlie WAQF, but I also
express my deepest appreciation for the opportunity to publicly align with the
objectives of WAQF.

Savings and investment is the foundation of sustained economic growth for our
country and our continent. Savings allow us to defer spending, keeping money aside
for a rainy day, smooth our consumption over our lifetimes and keep something aside
for family emergencies or for study or travel opportunities. But the values a society
eschews lie not in the statistics or the amount of money we accumulate. Civilisation
is about much more than just the accumulation of income and wealth- Civilisation is
about how we use our income, our wealth to advance our communities, improve the
lot of the poorest element of our society and contribute towards human development.

Our Budget Speech in February this year emphasised the principle of social
solidarity, where we can act in the interests of all people, and benefit as individuals.
WAQF embodies this principle of social solidarity through recognising that true
wealth creation is about ensuring that everyone benefits from the fruits of success,
that opportunity is broadened to those who have been disadvantaged.

The Millennium Development Goals commit all countries to halve the level of poverty
(at 1990 levels) by 2015. In adopting these goals, the world recognised that the
levels of poverty are a scar on the face of the world, an injustice that will not end
without clear, concerted action by all citizens of the world, acting together. Meeting the Millennium Development Goals in Africa was always going to be the biggest challenge facing the global development community. Over the past decade, Africa
has made significant strides to harness resources, reform systems of governance
and invest in public services.

The past decade has been characterised, by steady improvement in the political and
economic environment in most African countries. Despite these valiant efforts, in
many countries, we are still coming up short. We still lack the wherewithal to make
poverty history. In many countries on our continent, we will not meet the goal of
halving poverty by 2015. For example, on the income poverty reduction objective, we
remain in 2005 where we were in 1990 at 44 percent living in poverty. The has been
some progress in improving gross primary school enrolments in Africa from 71.5
percent in 1991 to 92.5 percent in 2004 and in the prevention and treatment of
malaria and HIV/AIDS, but the big challenges remain. We will only begin to reduce
poverty on our continent if we have more investment and jobs.

The challenge that we face on our continent is that such investments are best funded
through higher savings, as this will reduce our vulnerability to more volatile short-term
capital flows. Now we all know that one of the big problems we have is that in many
countries, saving rates are very low. So I want to start with the point that WAQF and
similar initiatives can play a big role by filling this gap between savings and
investment, by promoting the culture of saving, and by also focusing on long-term
investments. In this way, you will be contributing to the broader growth and
development objectives both locally and in the rest of the continent. Waqf provides
an alternative means of savings and financing that can help meet some of our
broader developmental objectives.

Against this backdrop, the Waqf approach is embedded in the concept of charitable
work, lending itself to the spirit of Islamic principles, a bringing together of the
community, an endowment that yields long-term benefits for the poor, the ill and
those in need. This, combined with responsible savings and investment, makes for
what many term an "ethical investment". This spirit encourages voluntary giving and
establishes a positive environment that will facilitate nation-building and community
upliftment.

Waqf as an institution has a long history. During the days of the Ottoman Empire
waqf provided for the health systems of many cities and indeed in Fez, the capital of
Morocco, the entire sewewage system was built and maintained on the back of
endowments (source Wikipedia). Waqf has made significant contributions in South
Africa already. The maintenance of schools, mosques, clinics and many other
charitable endevours is recognised. This contributes to reducing the incidence of
poverty and simultaneously strengthens our social and cultural bonds.

It is also extremely encouraging to note that there are numerous examples of
successful South African entities managed in accordance with the objectives of the
waqf. The Equal Opportunity Foundation is a case in point. Founded by one of our
Nobel Prize Winners, Archbishop Tutu, it has established two portfolios, the Equal
Opportunity Education Foundation and Equal Opportunity Development Foundation.
For both of these portfolios, they employed a leading global Shari'ah investment
manager based in South Africa to manage its assets. The Education Foundation had
an asset base of R15 million. Over the last 6 ½ years this fund has made charitable
donations of R17 million and despite these withdrawals the capital in the fund has
now grown to R22 million, which allows it to make numerous significant charitable
donations for many years to come. This is a good example of showing the
importance of building capital within the waqf so that it can sustain its commitment to
sustainable giving.

As Salaam in Kwa-Zuiu Natal is another excellent example, using their funds to great
effect in an impoverished and HIV stricken area. Initially it was an orphanage, and it
gradually added further services which it provided to the community. A junior school
was established, and then a high school, and now technical training is being
provided, giving disadvantaged youths an opportunity to acquire skills that will allow
them to build a productive career for themselves.

There is another example close to home here in Cape Town. The Crossroads
community was torn apart in the mid-1980s by violence. As a result the Mustadafin
Foundation was established to provide a range of support activities - food and
clothing, medical support and education. This continues to this day, some 20 years
later. These are wonderful models to follow, promoting development in a sustainable
manner.

SA has some 350 000-400 000 Muslim households creating a potential savings and
investment market of RI.8bn a year. Islamic banking is one of the fastest growing
sectors with estimated global assets at US$230bn and an asset base that is growing
at an average annual rate of 15%. Sharia compliant funds are believed to be about
170 globally and of which 4 are in SA. A number of our retail banks are also offering
Sharia compliant products. Although small in terms of the total global assets
managed by financial intermediaries, the growth rate is impressive by any standards.
If the principles of WAQF are used, it is entirely feasible for the appeal of these
products to transcend religious boundaries. The group of people who seek ethical
investment vehicles that benefit the community at large is much wider than we
imagine.

In South Africa, we appreciate the good work that such institutions are able to
provide, and are committed to developing our financial framework to assist the
building of Sharia development funds. We already have in place laws that allow this,
as for example the law allowing charitable entities to register as Public Benefit
Organisations, which will then allow them to qualify for preferred treatment when it
comes to income tax, capital gains tax, donations tax, estate duties, transfer duties,
stamp duties, and skills development levies.

Islam is the largest religion in Africa, with about 45% of Africans being Muslim,
compared to 40% Christian. North Africa is the region with the highest concentration
of Muslims (89%), followed by West Africa (at least 50%). More particularly, though
lower in the Central and Southern Africa, a number of SADC countries have
substantial Muslim populations - 35% in Tanzania, 20% in Malawi and Mozambique
and 10% in the DRC.

Whilst most aid from the Middle East goes to the Muslim world, and many Middle
East countries share of aid routinely exceeds the 0.7% of GNP target, it is difficult to
obtain more accurate data on the extent of aid to Africa from the Muslim world.
Furthermore, it is worrying that such aid appears to be declining as a proportion of
total global ODA since the 1980s. Such aid has the benefit of being untied and
without conditionality (unlike that of many Western donors), and is provided in the
form of project finance or loan (Islamic banking) form, rather than grant financing.

I also wish to comment on the prejudices that we see towards Islamic financing,
where many like to paint Islam with terrorism, and view WAQF and other forms of
religious-inspired savings as a source for funding terrorism. We know from our own
history that there are many countries that seek to paint struggles for liberation and
freedom with the brush of terrorism, and we must do a!l in our power- not to fall prey
to such pressures from very powerful countries who often act in this way to protect
powerful lobbies within their own countries.

In the battle to win hearts and minds, it is important that we emphasize the important
role that Sharia funds can make towards promoting development and fighting
poverty. In this respect, it would help if we can also be more transparent and
accountable in the management of such funds, and where we show zero-tolerance
for those seeking to hide their criminal acts behind a religious cover.

Our government has always placed a high premium on the integrity, efficiency and
credibility of our financial system as a vehicle to deliver the services upon which a
modern thriving economy is based. Such a system not only instils confidence among
the investment public and encourages savings which funds investment, but more
importantly also promotes a safe, secure and democratic culture of human rights
The South African government has, as a democracy, the right to protect its people
from any potential abuse and misuse, aside from its international obligations, given
the war on terror. Like any other conventional banking product, Sharia products have'
the potential to be abused and misused by criminals. SA has taken a strong stance
on abuse of consumers and on protecting the integrity of the system. There is a well
developed international framework for regulation that can be utilised to encourage
further development of waqf in South Africa. It is important that the collection of
assets is prudently performed and subject to the stringent checks that are
international best practice when identifying the source of funds.

I want to end by emphasing that it is my view that Sharia compliant and waqf funds
have an important role to play in development, and in helping the world alleviate
poverty. Our progress must always be judged not by the speed of the fastest and
fittest, but by the pace at which the vulnerable, the poor and the marginalised are
progressing. WAQF emphasises the value of social solidarity in a financial services
context that is innovative and almost unique in our environment At the same time, those promoting and managing such funds must do so in an accountable and
transparent way, and ensure that they do not fall prey to money laundering and other
criminal motives that undermine the very spirit of Islam.

SPEECH BY HELEN ZILLE, MAYOR OF CAPE TOWN

WELCOMING SPEECH FOR THE INTERNATIONAL WAQF CONFERENCE
COUNCIL CHAMBER – CAPE TOWN CIVIC CENTRE
17 AUGUST 2007 - 09H00

Mr Raaghieb Najjaar, Conference Chair, South African Finance Minister Trevor Manuel, Western Cape Premier Ebrahim Rasool, members of the South African and International Muslim Clergy, your excellencies, international speakers, conference delegates.

As-Salāmu `Alaykum wa Raħmatullāhi wa Barakātuh

On behalf of the City of Cape Town I welcome you to the 2007 International Waqf Conference.

I would like to acknowledge the partners that have made this conference possible – the International Islamic Development Bank, the Kuwait Waqf foundation, and the National Awaqf Foundation of South Africa

In a City that faces daunting developmental challenges, we welcome your choice of theme: ‘Developing Waqf Institutions for Sustainable Community Development and Poverty Eradication’.

Cape Town is a place of great natural beauty, and its economy is developing faster than anywhere else in the country.

However, as you may know, we also have a housing backlog of 400 000 units, and 226 informal settlements around the metropolitan region.

Over 16 000 families come to the City every year, most of whom do not have a job or a place to live.

Tens of thousands of shacks are tightly packed together without proper sanitation, and in dangerous areas such as flood plains and swampy areas.

We also have an unemployment rate of around 26%, and many of our young people are being seduced by drugs, alcoholism and crime.

In government, we are doing all we can to improve living conditions for those without proper homes by providing services on an equitable basis. We are working to increase access to job opportunities by investing in infrastructure and improving the business environment.

But we cannot succeed alone. We rely on the generosity and spirit of those citizens who care for their fellow human beings, and are willing to share what they have accumulated.

Now that we are in the midst of winter, some of the worst flooding in Cape Town’s history has affected nearly 40 000 people.

During this time, I have witnessed first hand the hard work of organisations that are funded by the South African Awaqf Foundation, such as the Mustadafin Foundation.

They worked tirelessly side by side with the City of Cape Town’s disaster management team, the South African National Zakah Fund, the Red Cross and other organisations in an effort to bring food and blankets to those who lost their homes.

And these organisations are there in summer too, when fires raze our informal settlements.

I admire and respect the spirit of zakah [charity] in which they have carried out their work.

And I admire the spirit of zakah in which our Muslim community and organisations donate, manage and disburse funds to assist with education and skills training, and to establish caring institutions such as Waqf SA.

I hope that the presentations in the days ahead will deepen the insight of all delegates into the challenges that you face in driving development.

I hope that the speakers will inspire you and enrich your knowledge.

And I hope that the collaboration between representatives of the different nations participating in this conference will strengthen your resolve to continue the work that you do.

May peace be upon you, Insha-Allah.

WELCOME SPEECH BY ZEINOUL ABEDIEN CAJEE, CEO, AWQAF SA

17 AUGUST 2007 OPENING SESSION

Assalamualaykum, ukuThula, Sanbonani, Vrede and Peace to all.

Bismillahirrahmanirraheem

Hon Minister Trevor Manuel, Madam Mayor and Madam Chair; Muhtaram Ulama, members of the diplomatic corps, scholars, speakers, representatives of the Islamic Development Bank, and the Kuwait Awqaf Public Foundation, guests, students, brothers and sisters…ladies and gentlemen. …

On behalf of the Mutawallees or Trustees, management and members of the Awqaf South Africa, we extend a very warm welcome to all to this first ever International Waqf Conference being held in South Africa. … We are really honored to have you in this august gathering and in our beautiful country and we hope and pray that this conference is going to be breaking new ground in philanthropy and charity in general.

Although the institution of waqf or Islamic charitable endowments have been in existence for centuries, as early as the beginning of Islamic Civilisation in the oases of Arabia and beyond - the concept and its implementation has been gaining unprecedented attention and currency in recent times.

Given the ever increasing levels of poverty, unemployment, and deprivation, the ever widening gaps between the rich and the poor, there seems to be a feeling that governments cannot go it alone and that communities need to partner with governments to tackle these major issues affecting humanity. At the same time, there is a growing realization among Muslims that the institution of Waqf which is inextricably linked to both spirituality and social justice - can and should play a meaningful role in sustainable community development and poverty eradication.

Historically the Waqf institution was very much part of the Islamic Financial System in mobilizing the voluntary charity savings and investing into much needed community infrastructure such as clinics, hospitals, hostels, schools, universities, mosques, and even roads, canals, and bridges for public benefit. Beyond these social assets, the waqf institution was also responsible for fixed direct investment in income generating commercial property such as shopping centres, apartment buildings, commercial farms, and businesses … and the income streams that these waqf investments provided, made it possible for the sustainable funding of social institutions and community needs. Thus the waqf system itself became an asset within the economy and added to its growth. This together with other Islamic systems of redistribution of wealth including Zakah, the prohibition of usury, and the inheritance system added much value to the state. In the long term, the institution of waqf lends itself to social, spiritual, and economic empowerment.

The community infrastructure that is found within the Muslim community has by and large been self funded out of a spirit and ethic of self reliance, cooperation, and generosity. While most our charity is collective, there are a few examples of personal philanthropy. One that is not widely known is the Hajee Ahmed Mahomed Lockhat Wakuff based in Durban. This waqf was founded with an amount GBP 5000. Over the years, 20 schools were built in rural Kwa Zulu Natal, several madressahs are supported, and scholarships granted amongst others. I am certain that this type of effort can be grow exponentially if organized properly with the correct governance and regulatory framework.

Awqaf SA is committed to the development of the institution of Waqf as public endowment fund. I am sure that we are going to hear lots more not only about the benefits but also the constraints in the development of this institution. We would like to encourage dialogue between communities, the South African and regional governments within the SADC, the Islamic Development Bank and the Kuwait Awqaf Public Foundation, and other agencies with a view to investigating the implementation of the waqf charitable endowment system so that it becomes a national imperative and a reality in the struggle towards community development and the fight against poverty.

Over the next two days we are going to hear lots more about country experiences in Africa, the Middle East, and in Asia and several dimensions of the “Development of the Waqf Institution for Sustainable Community and Poverty Eradication” as the theme suggests.. We believe that this conference has come an at opportune time for us to reflect on a number of challenging issues. We are hopeful that this conference will come up with positive recommendations for implementation.

At this juncture I would like to pay special tribute to Dr Ahmed Mohammed Ali, President of the Islamic Development Bank for passionately promoting and supporting the development of Awqaf for over two decades.

We wish our international guests a pleasant stay here and trust you will enjoy the conference and your brief stay with us. Lastly, I say thank you and shukran to the Awqaf SA Local Organising Committee, the Conference Chairperson, Br Raaghieb Najjaar, Mutawallees & Trustees, Management, volunteers, sponsors, and supporters for putting this conference together. I also wish to thank our partners in this conference particularly the IDB and the Kuwait Awqaf Public Foundation for their help and support. We must also thank the scholars and speakers who have taken the time to prepare for this conference. And we say thanks to all of you present here today. Shukran. Walhamdulillahirrabill Aa lameen.

Send mail to info@awqafsa.org.za with questions or comments about this web site.
Copyright © 2005 national awqaf foundation of south africa

Last modified: 02/04/07

Send mail to info@awqafsa.org.za with questions or comments about this web site. Copyright © 2005 national awqaf foundation of south africa

Last modified: 02/04/07

Send mail to info@awqafsa.org.za with questions or comments about this web site.
Copyright © 2005 national awqaf foundation of south africa