Co-operative societies play a key role in economic development in Tanzania. Co-operatives have been in Tanzania since the 1920s. Kilimanjaro Native Co-operative Union (KNCU), which was established in 1924, is the oldest coffee co-operative union in Africa.
Research by Moshi University College of Co-operatives and Business Studies (MUCCOBs) shows that in the early 2000s, KNCU produced over 5,000 MT of Arabica coffee, accounting for up to 11 per cent of Tanzania's national production.
Savings Co-operatives (SACCOs) are now a prominent sector in the co-operative movement. According to the Ministry of Agriculture, Food Security and Co-operatives, in 2013, there were over 9,000 registered co-operatives in the country, of which about 56% were Savings Co-operatives, or SACCOs. In 2013, the SACCOS had a total savings of USD 220 Million.
In other countries of the East Africa Community (EAC), co-operative are also a significant player in their respective economies. Co-operatives account for 56% of total coffee output and 40 per cent of milk is marketed through co-operatives in Kenya. Across the East African Community, the statistics are equally impressive.
The African Business magazine (October 2011 edition) ranked the Co-operative Bank of Kenya the third biggest bank in the East African Community and 71st biggest bank in Africa, in 2011. SACCOs hold the majority shareholding in the Bank. The performance of agricultural co-operatives is equally impressive.
The conclusion from these impressive statistics is that the co-operative model is an ideal business model that can drive the development agenda in Tanzania and the East African Community. Against this background, the Eastern Africa Farmers' Federation (EAFF) has been advancing a law for co-operatives at the EAC. EAFF is a regional organization whose members include the Tanzania Federation of Co-operatives (TFC), Agricultural Council of Tanzania (ACT) and MVIWATA in Tanzania.
The objective of the Bill is to create a harmonized legislative framework that will facilitate co-operative societies to exploit their potential in the EAC region. For the most part, the EAC integration agenda has been driven by large private sector players and national governments. This is in contradiction with the EAC Treaty, whose vision is to have a people-centered integration process.
Co-operatives are "people-centered" institutions, and EAFF members firmly believe they these institutions should play a key role in the region.
In January this year in Kampala, the East African Community Co-operative Societies Bill, 2014 was read for the first time during the plenary session of the East African Legislative Assembly (EALA). The Bill is being considered under a Private Members' Bill, and is being sponsored by Hon. Mike Ssebalu, an EALA MP from Uganda.
In a recent interview with this paper, on the sidelines of a strategy meeting held with the management of Tanzania Federation of Co-operatives (TFC), EAFF Policy Officer Mainza Mugoya provided an update on the Bill. He noted that the national co-operative organizations in the five EAC partner states have been involved in discussions to have a harmonized regional law for co-operatives in the region.
"There is consensus among the co-operative movements on the justification of the Bill in the region. We are now in the process of critiquing the contents of the Bill. The Bill is before the East African Legislative Assembly (EALA), and we expect to convene public hearings in July or August to receive comments from the stakeholders in each of the EAC partner states.
After receiving these comments, the Bill will go for the 2nd and then the 3rd Readings in parliament, where the comments will be further interrogated. The goal is for the Bill to reach the Heads of States during their Summit in December this year.”
The Bill is intended to improve the respective national co-operative legislations in the five EAC partner states by adopting the good practices from the different country laws. The Bill responds to the recommendations of the Africa Co-operative Ministerial Conference, held in Kigali in 2012, and convened by the International Co-operative Alliance (ICA) Africa. One of the recommendations is to strengthen regional collaboration between co-operatives. In addition, the law places heavy emphasis on the internationally-agreed principals and values of co-operatives.
More specifically, one of the proposals in the new law is a clause that allows for the formation of an East African Co-operative Society. This co-operative would be formed at different levels from at least two East African partner states. This clause is included based on the fact that the EAC is now one market, with no barriers to movement and trade, under the Common Market Protocol. In many respects, the EAC can be considered as one country.
Therefore, this clause would allow for a coffee co-operative union from Tanzania to join with another coffee union from Burundi and Uganda to form an East African coffee union which could jointly market their coffee. The same could apply for housing co-operatives.
A housing union in Kenya, can join with a union in Rwanda and Tanzania to form an East African housing union, which would invest in housing projects across the region for their members. The same applies for SACCOs. The Bill would unlock a lot of resources that exist in the co-operative movement in the region, and would facilitate development across the EAC partner states, using local, instead of foreign resources.
EAFF President Philip Kiriro said that the law will help co-operators develop functional linkages in order to maximize economies of scale.
According to Kiriro consultations on the law started back in 2009 with EAFF member organizations agreeing on the importance to exploit the regional integration process.
“The law will boost regional trade and strengthen cooperative movements in respective countries,” said Kiriro
Currently, all EAC partner states have laws on Co-operatives. The most recent law is the Tanzania Co-operative Societies Act, which was amended in 2013. With the notable exception of Uganda, the other laws are not more than 10 years old. Burundi has a legislation for pre-co-operatives which was enacted in December 2011.
The EAC Co-operative Societies Bill, when enacted into law, will cause the various national laws to be amended to harmonize with the new regional law. The current consultation process, coordinated by EAFF, is intended to ensure that there is sufficient critique of the EAC Bill, such that by the time it reaches the Heads of State Summit, it is very comprehensive and is accepted by the different stakeholders, including national governments.
This "ideal" regional has also borrowed from the good practices in other laws across the world. In the Ethiopian co-operative law, called the Ethiopian proclamation, cooperatives can access land from the government.
One of EAFF's member organizations in Ethiopia, Oromia Coffee Farmers' Co-operative Union (OCFCU), received land from the Ethiopian government to construct a coffee processing facility in Addis Ababa, and is in the process of acquiring an additional 5,000 hectares to expand coffee production in the north of Ethiopia.
No comments:
Post a Comment