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Cooperatives organizations rotting awayPublish Date: Dec 19, 2013
Cooperatives organizations rotting away
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By Francis Emorut and John Agaba

Many cooperative organizations which in the past helped alleviate poverty among many Ugandans are rotting away and on the brink of extinction
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This is contained in the Cooperative Movement and the Challenges of Development Report launched Wednesday at the Kampala Serena Hotel.

The report indicates that many cooperative organizations have defunct boards, poor leadership, riddled with corruption and poor foundations. Many have their structures rotting away.

It also points out that the only thriving cooperatives are the Bugisu Cooperative, the Lira Cooperative, and the Banyankore Kweterana, because they have strong boards.

Presenting the report, Prof. Josephine Ahikire, the Centre for Basic Research executive director, said it was a shame because “Cooperatives were the place people in rural areas survived on and helped to alleviate poverty and cause economic transformation.”

The study was commissioned through a tripartite arrangement, between Action Aid Uganda (AAU), The Uhuru Institute of Social Development (TUI) and the Centre for Basic Research.

It covered the Kisoro, Ankole, Masaka, Busoga, Bugisu, Teso, Bunyoro and Lango sub-regions.

According to the Trade ministry, there are over 3000 cooperatives in Uganda.

Moses Khisa, a researcher with Northwestern University in the US, said that many cooperatives are focusing on marketing and value addition yet production is key.

Ninsiima, a researcher at Centre for Basic Research, noted that government has left cooperatives only to the hands of powerful private individuals when they are supposed to take the lead in helping alleviate poverty especially among people at the grass root levels.

She said this has left them (private individuals) to determine their own market prices, which is not favorable to the rural poor especially the woman, leaving them in abject poverty.

She proposed that government be the one to determine the interest rates of these cooperatives.

“Cooperatives, especially SACCOS are operating on the market forces of demand and supply and as a result they too charge interest rates as those charged by commercial banks. They are not helping the poor to transform,” she said.

She emphasized the need of government interventions to guide the cooperatives in their operations.

The commissioner in the ministry of trade, Fred Mwesigye, said that despite the challenges the cooperatives are faced with they have played a leading role in providing employment, accessing funds for other investments like real estates and paying of tuition fees.

He also pointed out that it is not true that SACCOS are not relevant because the current savings of all the SACCOS in the country is sh280b compared to sh2.3b in the 1960s.

He said that government is reviewing the Cooperative Act to suit the current environment in relation to global standards.

Arthur Larok, the country director of Action Aid Uganda, noted that in order for cooperatives to thrive, there is need for competent leaders, who are accountable to the members of the cooperatives.He also stressed the need of protecting cooperatives from external influence.

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