Research on African Cooperatives

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Research on African Cooperatives

• Guy Tchami
• October 2006

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What is this?

• This is a study program funded by DFID. It is
  part of the Cooperating out of Poverty Campaign.
  The program has been initiated by ILOs
  Cooperative Branch in collaboration with the ICA
  and is coordinated by HIVA (University of Leuven,
  Belgium).

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Research objective

• This 12-month project aimed at assessing the
  contribution and potential of cooperatives and
  group-based enterprises to create decent
  employment, economic activities, basic social
  protection and voice and representation in
  Africa.

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Research parts

• Historical weight of cooperative traditions in
  Africa
  
• Rapid appraisal of the cooperative sector in 16
  African countries
  
• In-depth studies in 11 countries by professional
  researchers in 2005

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Methodology

• Rapid appraisal by cooperative insiders in 16
  African countries
  
• Burkina Faso, Madagascar, Zimbabwe, Mozambique,
  Tanzania, Rwanda
  
• Niger, Senegal, Nigeria, Egypt, Ethiopia, Kenya,
  Uganda, Rwanda, South Africa, Cape Verde
  

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Rapid appraisal

• Desk-study carried out by apex or govt staff
• Gathering available data on legislation, type of
  governmental involvement, donors, structure and
  extent of the movement (incl. numbers)
  
• Rapid appraisal and at the same time as starting
  point for the country studies

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Methodology

• 11 case study countries carried out by qualified
  local researchers
  

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Elements in the choice of the 11 countries

• Diversity of regions and language groups
• Representative populous countries (and some
  smaller ones)
  
• Easiness of access of data and information
• Continuity with WB study (1993) and our own
  survey (15 countries)

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Countries chosen

• Ghana, Nigeria, Kenya, Uganda
• Senegal, Niger
• Rwanda
• Cape Verde
• Ethiopia, RSA, Egypt
• Representing 52.1 of total African population

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Subject of the country studies

• Strengths, weaknesses and potential of
  cooperatives and the cooperative movement
  
• Role of government and donors
• Significance of coops for employment, poverty
  reduction, social protection and voice
  representation
  
• Common features differences

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Methodological set-up

• Studies subcontracted to 11 researchers in 11
  African countries
  
• Based upon an extensive checklist
• Briefing meeting Nairobi (Sept 2005)
• Research peer-review
• Debriefing, validation consultation meetings
  Addis Abeba (March 2006), Nairobi (April 2006)
  

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The extent of the cooperative sector

• Use of a broad definition of cooperatives
• Group-based, autonomous enterprises with open
  and voluntary membership and democratic
  governance, ILO Rec. 193

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The extent of the cooperative sector
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The extent of the cooperative sector

• Extrapolation for Rwanda and Nigeria
• 150 000 cooperatives or cooperative type of
  businesses
  
• Keep in mind that some are dormant
• Semi cooperatives were not counted
• Average penetration rate is of 7

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The extent of the cooperative sector

• Huge differences between countries
• Egypt, Senegal, Ghana, Kenya and Rwanda 10
• Niger, Uganda and Cape Verde 1-2
• In some countries (i.e. Egypt, Senegal and Ghana)
  average size of coops tends to be large (about
  800 to 1 000 members)
  

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The extent of the cooperative sector

• Country studies reveal that large coops can be
  found in traditional cooperative sectors such
  as agriculture and credit
  
• New generation of coops involved in new crops,
  distribution, tourism, tends to be based on
  smaller groups

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Structure and integration

• The classic movement model does not exist in
  practice (except Egypt and Kenya)
  
• Bottom-up growth, networking and integration take
  place between cooperatives involved in similar
  trades or industries
  

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Basic thrusts of the sector

• Client-owned agricultural cooperatives dominate
  in members
  
• Savings and credit cooperatives dominate in
  financial strenght
  
• In Kenya, Nigeria, Niger and Rwanda, savings and
  credit coops (SACCOs) are the 2nd largest
  cooperative sector
  

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Basic thrusts of the sector

• Most cooperatives are initiated, composed and run
  by men
  
• In Kenya, 75 of the membership of Kenya
  agricultural cooperatives is male
  
• but in other sectors such as SACCOs or consumer
  cooperatives women have more important position
  
• The case of South Africa

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Vibrancy of African cooperatives

• Members of successful coops have a group identity
  and participate in the associative life of the
  cooperative
  
• Most of the vibrant coops had an explicit mission
  statement and a clear vision (e.g. Niger)

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Vibrancy of African cooperatives

• The dynamic cooperatives rely and insist on local
  capital mobilization
  
• They seek market niches and marketable products,
  invest in quality management (e.g. Nucafe in
  Uganda)
  
• The successful coops reveal that governance
  elements play a crucial role in harnessing the
  different associative and business forces in a
  cooperative

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External patrons governments and donors

• Despite the 1995 ICA Statement and the ILO Rec.
  193 many African countries still rely on an
  outdated and dysfunctional or obsolete legal
  framework

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External patrons governments and donors

• Three types of development partners
• Large international or bilateral development
  agencies WB, ILO, FAO, and GTZ
  
• Cooperatives movements from the North CCA, SCC,
  ACDI-VOCA and DGRV
  
• Internation cooperative structures ICA and
  WOCCU
  

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External patrons governments and donors

• Support to the cooperative sector in Africa is
  still mostly channelled through government
  departments (e.g. in Nigeria, Kenya, Niger and
  Egypt) through apex-bodies or secondary
  cooperatives (e.g. in Ghana, SA and Rwanda) or to
  support agencies

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Significance of coops for employment

• Self-employment of the members
• Ghana 209145, Rwanda150000, Uganda6000-15000
• Staff of coop institutions
• 77400 in Kenya, 28000 in Ethiopia, 9500 in Egypt

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Significance of coops for poverty reduction

• Most members qualify as poor
• Saccos loans to overcome seasonal income
  fluctuations (food, school fees)
  
• Coops can not fight against poverty alone

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Significance of coops for social protection

• Saccos risk-mitigating strategy by imposed
  saving
  
• Members and personnel set up ad hoc solidarity
  mechanisms to cater for expenses related to
  wedding ceremonies, illness, death or funerals,
  etc.

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Significance of coops for voice and representation

• No perception of the coop movement as a societal
  representative
  
• Lacking upwards communication within the coop
  sector
  
• Some dynamic federations exist (e.g. Rwanda,
  Senegal and Niger)
  
• Coops not included in stakeholders for poverty
  reduction policies (PRSPs)
  

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• Thank you for your attention!!!