Co-operatives in Africa: where do we come from

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Co-operatives in Africa where do we come from

• Develtere P. Pollet I.
• HIVA - KU Leuven

ILO Research Conference, Addis Abeba, 13-15 March
2006
2
Who are we?

• Pollet Ignace and Develtere Patrick, University
  of Leuven, Belgium
• Teigist Lemma, consultant, Ethiopia
• Fredrik Wanyama, Univ. Maseno, Kenya
• Anthony Tsekpo, Univ. of Ghana
• Herment Mrama, consultant, Uganda
• Sanda Maman Sani, consultant, Niger

3
Who are we?

• Joao G. Mendonça, consultant, Cabo Verde
• Mohamed A. Aal, Cairo University, Egypt
• Anselm Enete, Univ. of Nigeria
• Jan Theron, Univ.Cape Town, South Africa
• Jean D. Nyamwasa, consultant, Rwanda
• Abdou Ndao, Institut Fondamental dAfrique noire,
  Senegal

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Overview

• Traditions
• Literature hypotheses
• 15 country-rapid survey

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Why look at co-operative traditions?

• The co-operative sector was introduced by the
  colonial authorities not home grown
• Path dependency legacy
• Export crops
• Co-operative culture
• Co-operative structures and networks
• Position in society and economy.
• Has been modified to some extent

6
The five traditions

• Unified model tradition
• Social economy tradition
• Social movement tradition
• Producers tradition
• other South Africa, Egypt, Ethiopia sui
  generis

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The kick-off

• British colonies
• Protest against middlemen
• Cooperative legislation constructive
  cooperativism (1940s)
• French colonies
• Sociétés indigènes de prévoyance (1910)

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The kick-off

• Belgian colonies
• Co-operatives for colonists
• Indigenous co-operatives from 1921
• public co-operatives
• Portuguese colonies
• Corporatist state rural extension work
• Big export-oriented farmers

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The systems

• British
• Ordinances, Acts,one size fit all
• Registrar register, supervise, audit, arbitrate,
  dissolve
• Not registered protest co-operatives (e.g.
  Uganda African Farmers Union)
• Later national unions
• French
• French liberal legislation
• Different departments animation rurale
• Resistance to national unions

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The systems

• Belgian
• Non-competitive
• Paternalist economic education
• State interventionist e.g. prices
• NGOs en trade unions
• Portuguese
• Metropolitan legislation
• Restrictive and state interventionism

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Post-colonial evolutions

• populist-nationalist strategies
• same pattern
• more state intervention
• integrated in single/dominant party system
• new co-operative models
• co-operatives without co-operators
• co-operatives in patron-client system

12
Effects legislation

• Until 1990s laws inspired by tradition
• Unified model accent on registration/control
• Social Economy model liberal diverse
• Social Movement model liberal diverse
• Producers model agricultural co-operatives
• in addition integration in national development
  strategy

13
Effects co-operative support agencies

• Unified model
• Registrar or Commissioner
• Co-operative Colleges
• Social economy model
• Different ministries
• INADES,...
• Movement NGO (e.g. Iwacu in Rwanda)
• Portuguese Ministry of Agriculture

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Effects co-operative networks

• Unified Model
• Federations
• Apex bodies
• International Co-operative Alliance
• Social Economy Model
• Federations or Unions
• Francophonie

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Effects co-operative networks

• Social Movement Model
• trade unions and farmers unions
• NGOs en associations
• Portuguese
• national unions of farmers
• Organizaçao cooperativista dos Povos de Lingua
  Portuguesas

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Effects international support

• Unified model ICA, WOCCU,..anglophone world
• Social Economy model francophone world
• Social Movement model NGOs, unions
• Producers model CoopAfrica, INSCOOP

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Literature - hypotheses

• Earlier findings
• UNRISD (1969-71)
• Alien models compulsion
• Weak performance limited impact
• Perpetuation of dependencies

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Literature - hypotheses

• Top-down approach (Oakley Marsden, 1984)
• Engineered economic and social change (Cernea,
  1985) methodology of intervention (Verhagen,
  1986)
• Donors weak in institution building (WB, 1986)
• Clientelism and patronage (Holmén, 1990)
• Cooperative sector no cooperative movement
  (Develtere, 1994)

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Literature - hypotheses

• Porvali (1993) Hussi (1994)
• Ghana, Kenya, Niger, Nigeria, Senegal, Uganda
• Significant support, short term project
  objectives
• No viable, self-managed organisations
• Inappropriate policy framework
• Coops as extension of govt ànd projects

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Policy Conclusions Worldbank (1993)

• Reduce role of government agencies
• Simplify legal requirements
• Cooops must be free to determine their own lines
• Sufficient returns for trading
• Not subject to imposed price controls
• Adequate share capital contributions
• Movement-based support organisations

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Hypothesis market environment

• liberalisation increased competition,
  efficiency effectiveness
• But also production increase higher prices for
  farmers
• Coops bring institutional framework for market
  relations

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Hypotheses members

• Members motivation access to money, decent
  income (not training, policy debate)
• Participation of women is weak serves to
  legitimatise and perpetuate inequalities
• Low presence (of credit coops) in rural areas
• Members profile social stratification outside
  the coops
• Cost of participation too high for bottom-poor

23
Hypotheses employment

• Primarily employment supportive role
• Workers coops have as much difficulty to survive
  as SME
• Workers coops work if (a) ideological support and
  (b) market orientation

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Hypotheses poverty reduction

• Coops have welfare-enhancing capability for small
  traders and producers because of (a) market
  information (b) reduction of transaction costs
  (c) pooling risks, (d) more bargaining power
• Coops can shorten the marketing chain and
  eliminate inefficiencies income gains!

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Hypothesis social protection

• High demand for emergency loans
• Coop and mutual insurance strong positive
  effect on health service consumption

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Rapid Survey

• 15 countries
• Burkina Faso, Madagascar, Zimbabwe, Moçambique,
  Tanzania
• Niger, Senegal, Nigeria, Egypt, Ethiopia, Kenya,
  Uganda, Rwanda, South Africa, Cabo Verde

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Legislation

• Changed in the 1990s
• Except Egypt, Moçambique, Senegal, South Africa
• Credit unions in coop legislation in
  english-speaking countries

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Government involvement

• Personnel assigned 10 to 900
• Functions
• Information gathering
• Promotion
• Registration
• Audit and control
• Technical assistance and training

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Number of coops

• gt 50.000 Nigeria
• gt 10.000 Egypt, Kenya, Burkina
• 5.000 10.000 Eth., Uganda, Tanzania
• 1.000 5.000 Sen. , Niger, Zimbabwe
• lt 1.000 Madagascar
• ? Moçambique, South Africa

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Number of coops

• Not all are active
• Not all are part of federation or apex
• Pre-coops?
• Self-help groups?
• Same for members!

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From evidence to support

• Evidence WHAT?
• Success WHEN?
• Support HOW?

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Evidence WHAT?

• From cooperative sector to social economy?
• Liberalisation of laws catering for coops and
  other types of associations
• Also from social economy to coop?
• Cf. task force in Rwanda
• Cf. new law in Ghana caters for farmers groups
• Coop advantage Liability raising money scope
  growth

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WHAT?

• Insurance coops
• Capitalisation problem Uganda
• old insurance coop in South Africa
• Insurance coops as commissioners
• CIC Kenya (owned by coops)

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WHAT?

• The counting question!
• Individuals or households? Depends on system of
  production
• Also burial societies? Edir?

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WHAT?

• Proliferation of primary societies deficient
  apexes
• Aid-lobbying coops (Ghana, Nigeria, Uganda)?
  opportunistic
• Weak primaries split sustain weak federations
• Shift from primary agric. coops to saccos
  imitationeffect
• No organic link with federations
• Deficient apexes not new phenomenon no
  democratic system of formation of sec./tert.
  coops
• Federations union coop functions (Rwanda)

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WHAT?

• Dormancy reasons
• Criteria not holding annual meetings, annual
  audits
• Some never started
• Ownership problem participation deficit
• Leadership Management problems
• Viability problems (e.g. privatisation,
  globalisation)

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Success WHEN and WHY?

• Egypt
• Village Market Coop
• Coop for workers
• Nigeria
• University Women Coop
• Uzondu coop
• Niger Mooriben
• Ghana Kuapa Kokoo
• Senegal housing coop

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Success WHEN and WHY

• Cabo Verde Unicoop Fogo
• Kenya Dairy Coop
• Ethiopia Oromia Coffee coop
• Rwanda Banques Populaires
• Uganda
• Teachers sacco
• Nucafe
• South Africa Rooibos Coop

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Key-factors of success

• Group identity associative life
• Independent leadership
• Well-articulated needs (individual and
  collective)
• Vision result orientation, realise/accept that
  environment has changed
• Organisational model (coop, trust, GIE,..)

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Social elements

• Ownership (no external patronage)
• Local embeddedness social cohesion
• Improvements in genderrelations reflected in
  coops
• Significant social benefits for members

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Governance elements

• Internal accountability
• Organic links between different tiers of
  organisation
• Transparency
• Democratic governance
• Education and training
• Professional qualified management staff

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Economic elements

• Commodity Value - Marketing chain
• Market/demand oriented
• Mixture production, marketing, credit,
  insurance,
• Business-support to members
• Reward of quality
• Growth oriented (asset base, business turnover,
  profit,..)
• Prof. staff acquisition and retention policies
• Significant financial/economic benefits for
  members

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External relations

• Co-operation with other coops
• co-operative/collaborative relationship with
  external partners (horizontal)
• Linkages with research centres, ngos, fair trade
  organisations,..

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Hindrances to overcome

• Infrastructure
• Loan recovery
• Inadequate visibility of the sector as a whole
• Gender
• Lack of business training of members
• Tax law
• How to live with competition
• political/representational deficit of the sector

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Support HOW?

• Support to coops narrow, broad, social economy?
• What role for secondary and tertiary structures?
• Quality or expansion?
• A knowledge-generation, acquisition, sharing
  programme or more?
• The facility as (a) yet another dev. partner or
  (b) coalition of dev. partners or (c) joint
  undertaking?

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The papers the book the net

• Most papers are done
• Except
• Paper Senegal 31th march
• Case study Nigeria
• Small revisions possible 31th march
• To be verified by each
• Bibliography
• Sources (when tables)
• Electronic version of case-studies (full text)

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Editing process

• Translation french english
• HIVA does Editing shorten, subtitles,
  amendments,
• Researchers do last reading of their text
  (approval)

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The book

• Co-operating out of poverty Renaissance of the
  African co-operative movement
• Ch. 1 The co-operative traditions
• Ch. 2 The 1990s
• Ch. 3 11 country-reports
• Ch. 4 Analysis
• Ch. 5 Conclusions

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The book

• Publisher ILO or
• 1000 copies
• End of the year
• Launching

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The net

• ICA Research Committee
• Codesria
• Scientific journals
• The Cooperative Facility for Africa