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Global - October 31, 2020

Understanding New Hajj Savings Scheme and NAHCON’s Innovation

Murtala Adewale, Kano.

Embarking on a journey to perform the spiritual pilgrimage at the holy cities of Makka and Medina remains a perpetual obligation of Muslims globally. Little wonder, the Kingdom of Saudi Arabia becomes a melting pot of millions of Muslims from across the globe where skin colors, racial differentials and influx of multilingual people converge to complete the sacred act in Islamic ordinance.

Hajj is the last pillars of Islam significantly mandated upon every Muslim enriched with vary conditions, top most the financial strength, to perform at least once in a life time.

Admirable as hajj occupied in the minds, millions of Muslims however are not financially endowed to afford the luxury of the journey simply because of the soaring cost of hajj fare in Nigeria. Although few enjoyed the rare privilege through government and wealthy individuals benevolence, the present fare (2020 cost), which mostly based on foreign exchange rate to naira, is far beyond the reach of an average citizen; mindful of the present economic reality.

This narrative is partly responsible for why Nigeria had consistently struggled and, or still find it difficult to occupy the 95,000 hajj slots being allocated by the Saudi authorities at least in the last four years. For Instance, 166,083 pilgrims performed the 2018 hajj from Africa (9.5 per cent) of the total population of 2.3 million, Saudi Arabia General Authority for

Statistics (GASTAT) reported. Nigeria accounted for 34,978 pilgrims (21.06 per cent) state pilgrims, of the 166,083 from Africa.

Regrettably, the declined percentage is even worse when compared with the percentage of Muslims who are not opportune enough. Available data indicated approximately 109 million (52 percent) population of Muslims in Nigeria. Considering the percentage of Muslims in the country with the number of 2018 pilgrims (34,978) indicated 0.032 percent. In 2019, 44,450 pilgrims performed hajj which indicated 0.032 per cent. By implication, those who performed hajj in 2018 and 2019 are less than one percent of the total population of Muslims in Nigeria.

Finding practicable solution to the challenge, especially making the dreams a reality in spite of social status in the society or occupation, the National Hajj Commission of Nigeria (NAHCON), recently launched Hajj Savings Scheme (HSS), a new contributory platform designed to enable intending Muslims open their saving basket in preparation for hajj.

Essentially, the novel platform is conceived to make hajj fare in Nigeria not only affordable but developing a reliable culture depositor can build thrust that the dream of visiting the holy sites, sooner than later expected will become a reality.

Unveiling of Hajj Savings Scheme

Although the concept was conceived by successive heads, the pragmatic leadership of the fourth board of National Hajj Commission of Nigeria (NAHCON), being chaired by Barrister Zikrullah Kunle Hassan busted the yoke of perceived barriers that impeded the actualization of the scheme in the past.

Upon his inauguration in February 2020, the NAHCON chairman, Barr. Zikrullah declared his focal points and ultimate intention to change the narrative of Hajj operation in the country, especially the escalating fare, making it affordable to a significant number of people. Besides, the chairman also promised to transform the hajj practice through establishment of hajj institute to build requisite professionalism.

Undoubtedly, the unveiling of HSS which took place in the ancient city of Kano marked the beginning of Zikrullah’s aspiration to turn around hajj and umrah operations in line with global best practice.

Speaking at the inauguration, Barr. Zikrullah noted that the Hajj Savings Scheme was pursuance to section 7 (1) of the legal instrument establishing, which empowers NAHCON to, among other things, “establish, supervise and regulate a system of Hajj Savings Scheme to be operated by the Pilgrims Welfare Board of each state and FCT for interested pilgrims”.

According to him, “ the event of today is the fulfilment of our mandate using the Jaiz Bank Plc for the take-off of the HSS. The new system will operate concurrently with what we have known as ‘Pay As You Go’ at transitional period. However, payments made by the 2020 intending pilgrims will remain with the respective State Pilgrims’ Welfare Boards and will be given priority in our preparations for the 2021 Hajj exercise.

“This model was designed and developed as a stop-gap for the full-blown Hajj Savings Scheme pending the conclusion of administrative and organizational structure towards obtaining an operating license from the Central Bank of Nigeria. Since we all believe that the future of Hajj lies in a digital-driven financial system, a functional financial system like the HSS is apt as it will set off a chain of opportunities and nationwide economic activities.

“It must be emphasized here that the Scheme, when fully implemented, will safeguard the intending pilgrims against fraudsters as you know, the traditional savings methods mostly in use especially in rural areas are fraught with lots of risks and hardship caused by marauders, thieves or even natural disasters like fire outbreak. Also, intending pilgrims will no longer need to sell-off or dispose their lives savings or assets, nor would they rely on their well to do relations to be able to pay for Hajj anymore.

“It’s Provide reliable and accurate data for effective and efficient service delivery, enhanced advance planning for accommodation, feeding and airlift operations, offers subsidy and a great opportunity to reduce cost of Hajj, strengthen the economic capacity of contributors, and provide economic power to Muslims to lift them out of poverty. Job creation through pockets of portfolio investments will be provided and aligned Nigeria’s Hajj system to global standard just as it will boost the country’s GDP”.

Also speaking, the chairman of Zamfara state Pilgrims Welfare Board, who also doubled as chairman of Association of state Pilgrims Welfare Chairmen, Alh. Abubakar Sarkin-Pawa expressed commitment of states to success of the new initiative.

Alh. Abubakar said the new scheme would enable seamless preparation of states to conclude all arrangement ahead of time.

Enrolment of Intending Pilgrims on New HSS

Prior to its official launch, NAHCON signed a memorandum of Understanding (MoU) with Jaiz Bank plc, on September 10th, 2020, on module operandi as sole financial vendor of the scheme.

Under the new paradigm shift, pilgrims are afforded the choice to enroll through state pilgrim’s welfare boards, agencies or private tour operators. Enrolment, according to the financial institution, would be made convenient through various platforms besides the HSS Apps and branches of Jaiz Bank nationwide, where subscribers must indicate the state in which they intend to make the journey.

On the contrary, HSS has not outlawed the traditional bulk payment through the state and, or private tour operator. NAHCON had rather allayed the fears and concerns being expressed by some stakeholders insinuating that the new scheme will strip the state and tour operators the traditional function of collecting hajj fare.

“I want to assure them (state and agencies) that, as key players in the scheme, they like the depositors stand to benefit more from the accruable profits with the sharing ratio at 40, 30, 20 and 10 for pilgrims, Jaiz Bank, NAHCON and the States respectively. Therefore, your support and cooperation is very critical and important to the success of the Scheme” Barr. Zikrullah assured.

Also speaking at the inauguration of the scheme, the managing director, Jaiz Bank Plc, Mr. Hassan Usman declared the commitment of the non-interest commercial bank to transform hajj operations in the country with the new Hajj Savings scheme.

Besides, he reminded that the new scheme will ease the financial burden of intending pilgrims, making hajj affordable and added that the financial instrument would improve economic viability.

Advance Global Practice on Hajj Savings Scheme

Malaysia, Indonesia and Maldives, have created a notch of global standard and are reference points in hajj fund management in the world. With independent institutions established to manage hajj deposits, the countries are known for seamless hajj preparation besides making the services affordable to all classes of pilgrims over the years.

For instance, Malaysia is one of the first countries to create “Tabung Haji” , a well-funded hajj bureaucracy, established to educate and subsidize air travel of pilgrims. As far back 1963, Malaysia set up “Tabung Haji” to manage intending pilgrim’s deposits with modern and profitable pilgrimage administration, globally recognized.

The fundamental concept behind the institution is to enable Muslims to save for pilgrimage without fear of the money being tainted by riba (interest). Due to prohibition of interest (riba), Tabung Haji does not lend to people as loans. Instead, they collect savings from the depositors and invest strategically.

With deposits resources, Tabung Haji has established 17 subsidiaries with direct investment and these subsidiaries span across different sectors, including finance, plantation, construction, telecommunications, utilities, property development, oil and gas, and others. The diversified investments in various sectors have enabled Tabung Haji to cover the rising costs of hajj operations as well as continue to subsidize the cost of Hajj for Malaysian pilgrims every year.

In Indonesia, Badan Pengelola Keuangan Haji (BPKH), an independent public legal entity is established by law to manage hajj funds. Although the body is statutorily independent, the laws establishing it compelled the body to account to the president through the Minister of Religious Affairs.

Proceeds on hajj deposits and investments are used to subsidize the fare Indonesians paid annually for hajj. The returns from deposits also cover the operational expenses and lastly certain percentage of the overall proceeds return to prospective pilgrims’ accounts

In Maldives, an Island on Indian Ocean with less than 600,000 populations of about 100 percent Muslims has 50% of the hajj quota being managed by Maleesha Hajj Group scandal (MHCL) and the rest of 50% is managed by private hajj providers.

Moreso, the critical advantage of the scheme, its afford deposits invested in a Shariah compliant investment and proceeds shared among intending pilgrims on percentage

MHCL has the objective of safeguarding resources of Maldivians who plan on performing Hajj and Umrah, providing affordable means to perform the pilgrimage and improve hajj administration. However, the hajj seat will only be allocated to intending pilgrims when the balance reaches 75% of the fare.

Stakeholders Expectation on HSS.

President General, Nigeria Supreme Council of Islamic Affairs (NSCIA) and Sultan of Sokoto, His Eminence, Alhaji Muhammad Sa’ad Abubaka has appealed to Muslims faith to embrace the newly introduced Hajj Savings Scheme (HSS). But Sultan did not throw weight on the new scheme without calling for transparency and accountability in the handling.

Alhaji Sa’ad who spoke during the unveiling of the scheme in Kano expressed confidence on the management of the scheme while assuring intending pilgrims security of their depositors under the custody of Jaiz bank. Notwithstanding the advocacy for the scheme, the Sultan calls for transparency and accountability in handling the new project. That, he said, remains the critical crux to guarantee public confidence and acceptance.

A Kano based hajj tour operator, Alh Mukaila Bilyaminu advocated for more inclusive of other financial institutions in the savings scheme. Although, he applauded the present board of NAHCON for actualizing the novel scheme, the private operator clamors for adequate preparation of the system to accommodate all.

Mukaila who admitted that his company is yet to register with NAHCON said that he, however, has his “reservation as to why NAHCON chooses Jaiz Bank as the sole operator of the scheme.

“I am very happy for the scheme and I actually commend NAHCON and other people involved in the occasion. This scheme will assist poor people to save money gradually before performing hajj. I am not against Jaiz Bank but why will NAHCON restrict the Hajj Saving Scheme to Jaiz Bank alone.

“What will happen to the scheme if Jaiz Bank platform collapses, especially close to Hajj exercise; what happens if the Bank itself has a problem. We acknowledge the fact that Jaiz Bank is an Islamic bank in Nigeria but there are other financial institutions which have products of non interest.

“NAHCON has done well but they should allow and involve other banks that have Islamic facilities to come into the Hajj Saving Scheme. This will make it wider and give pilgrims different options. I am aware that Sterling bank operates iMAL Non-Interest Banking System, Stanbic and First Bank also has something similar. “ Mukail explained


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