Cooperatives and development: How to enhance cooperatives performance in Africa? by Situma Mwichabe
SID Forum Highlights for FoodFIRST
How can cooperatives contribute to increased access to finance and markets for smallholder producers in developing countries? Why are cooperative models, based on trust between economic players, successful in certain countries and contexts and less successful in others? What are recent experiences? These were the questions central to the discussion of FoodFIRST conference 'Cooperatives and Development' held on April 24th (Venlo, The Netherlands) as part of the Floriade Lecture Series, organized by the FoodFIRST coalition in cooperation with Agri Pro-Focus. More information about this event and the full programme of the Floriade Lecture Series are available at FoodFIRST Coalition website.
The Kenyan Minister of Cooperative Development and Marketing - Joseph Nyagah - pointed out that cooperatives can be nowadays a concrete response to the collapsing financial capitalism. Cooperatives empower farmers, enabling them to access the market and financing, as well as services like school and education for younger farmers. Governments therefore need to support the cooperatives by creating a good environment to let them grow and develop. Christiaan Rebergen of the Dutch Ministry of Foreign Affairs stressed that cooperatives originate at the grass roots level, and governments have to audit the movements, but not own the cooperatives. Summary report (Source: FoodFIRST).
As a continuation of the FoodFIRST debate on cooperatives, and in order to better understand strengths and challenges of the role of cooperatives for development, in particular with regards to the African experience, the SID Forum has invited Situma Mwichabe - senior development advisor based in Kenya - to share his point of view on the impact of rural cooperatives on development so far, and to suggest the necessary strategies to enhance their role and performance for African agriculture.
by Situma Mwichabe.
The cooperative movement brings together over 1 billion people around the world. The UN estimated in 1994 that the livelihood of nearly 3 billion people was made secure by co-operative enterprise. These enterprises continue to play significant economic and social roles in their communities. In Kenya 1 in 5 people is a member of a co-operative or 5.9 million and 20 million Kenyans directly or indirectly derive their livelihood from the cooperative movement.
Cooperatives are significant economic actors in national economies in Africa. In Benin, FECECAM, a savings and credit cooperative federation, provided USD 16 million in rural loans in 2002. In Côte d'Ivoire cooperatives invested USD 26 million for setting up schools, building rural roads and establishing maternal clinics. In Kenya, cooperatives are responsible for 45% of the GDP and 31% of national savings and deposits. They have 70% of the coffee market, 76% dairy, 90% pyrethrum, and 95% of cotton.
The cooperatives also create and maintain employment. Globally, cooperatives provide over 100 million jobs around the world, 20% more than multinational enterprises. In Kenya, 250,000 people are employed by co-operatives.
The contrasting context by the introduction of formal institutions whose cooperative content and context are in contrast to traditional cooperative models. Traditional cooperatives have been characterized by mutual help, work solidarity and social responsibility. The contextual mismatch has left the supposed beneficiaries of cooperative programmes feeling excluded.
Given the predominance of agriculture in most African economies, the cooperative phenomenon has come to be subsumed under the logic of rural and agricultural development, so much so that today, the fortunes of the cooperative movement rise and fall with those of the rural and agricultural economy.
The false linkage of agriculture with the cooperative economy has led African states to rely excessively on the cooperative mechanism as the principal tool for rural and agricultural development. This has resulted in the neglect of the cooperative approach in other sectors, where its dynamics can be positively used for development.
Also, the fragmentation and sheer numbers of uncoordinated programmes in the cooperative sector have led to a significant loss of effectiveness and focus, both among those responsible for the extension or facilitation of cooperative skills.
The strategies to enhance cooperative performance in Africa
The strategies to support cooperatives in Africa include:
Focus on the true cooperative identity such that it’s a distinct mutualist association with a democratic practice in its management. It should embrace self-reliance, equality among members and equity in distribution of and access to the benefits.
Enhance the administration and management through democratically elected members, appropriate internal monitoring mechanisms, and use external auditing services to ensure administrative accountability and to maintain high standards of probity and transparency by management.
Investing in cooperative education and training will help to maintain the highest standards of cooperative professionalism and skills. This should be through education, information, dissemination and training of cooperative members and Training and capacity development of professional staff to enhance their technical and operational skills.
Institutional and legal framework should provide for a single official structure in every country which could be decentralized as required and charged with the responsibility for the registration and approval of all cooperatives. Such an agency should also be responsible for maintaining a national data bank on cooperatives which could be put at the disposal of cooperative practitioners, members and any other interested parties.
Fostering inter-cooperative links by capitalizing on the existing diverse and very rich range of cooperative experiences in Africa across the different sectors especially shared knowledge among Africa’s cooperative practitioners.
Foster better relations between the state and the cooperative movement whereby the state by creates a favourable statutory climate, initiate periodic reform of policy and legislation on cooperatives as necessary, ensure that statutory rules and regulations on cooperatives are practically enforced and followed.
Supporting partnership whereby cooperatives strengthen their link with the International Cooperative Alliance and their partnership with the International Labour Office as the specialized UN agency responsible for the promotion of the cooperative movement in developing countries.