Opinion
Promoting of cooperatives has been a mixed bag
Publish Date: Jul 15, 2014
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By Fred Alex Ahimbisibwe

Co-operatives continue to be an important means, often the only one available where by the poor, as well as those better off but at perpetual risk of becoming poor, have been able to achieve economic security, an acceptable standard of living and  good quality of life (ICA, 1996).


Co-operatives provide an organisational framework, which enables a significant proportion of the population in Uganda to take into its own hands the tasks of creating productive employment, achieving social integration and sustainable development.

However, to realise the above, development of co-operatives must be based on universal principles and values requiring putting members at the centre, primarily for the benefit of the members but with a strong Corporate Social Responsibility orientation.

Experience of over a century (1913-2014) demonstrates that some have lived up to the above orientation while others have not due to:

·     Poor selection of committees, especially those who fail to support their co-operatives

·     Members who join but never use their cooperative but instead by pass it for small gains else where.

·     Members who use co-operatives but fail to take responsibility.

·     Members who do not ask questions and let a few persons make policies.

·     Members who do not attend annual meetings and directors who fail to attend board meetings

·     Lack of consistent membership education about the problems co-operatives face and the challenges they must meet.

·     Members not supporting cooperatives with enough risk capital to get the business done.

·     Preference of the low cost management which has turned out as the most expensive item for the co-operative.

·     Failure of the governance to watch the formation of cliques and special interest groups with in the co-operative .This ultimately disintegrates the co-operatives

·     Concealing facts about a co-operative. All facts, both good and bad, should be placed on –not under the table.

·     Errors in financial policy; overextension of credit, over borrowing, too little capital, poor accounting records, lack of financially sound, systematic plan for reimbursement of equity.

·     Errors in educational and social work. This begins by failure to teach cooperative ideals to members unfamiliar with how cooperatives function, failure to develop member loyalty or countering the development of factions with in the cooperative.

·     Management errors, such as inadequate inventory, poor location, neglected image of physical facilities, employee dishonesty, ineffective management, incompetent directors, nepotism, poorly conducted meetings, admittance of disloyal and dissatisfied members.

In spite of the above shortcomings there are prosperous cooperatives in Uganda due to:

·     Providing only goods and services members use

·     They are adequately financed by the members; the greater the financing (risk capital) supplied by the members, the more efficient the co-operative.

·      avoiding excess capacity by using all the major fixed assets at 75% level or more

·     Members do majority of their businesses with the co-operative.

·     Maintaining low and administrative and overhead costs

·     More individualized and specialized services, particularly in the marketing area.

·     Maintaining an open line of communication with members;

·     Selecting and developing quality management team.

·     Placing more emphasis on electing business oriented directors.

·     Developing and implementing a systematic method of co-operative education for members, employees, directors and management.

·     Aggressively positioning for changes in operations, markets and member needs.

Finally, all communities in Uganda need to interest them selves in forming and joining Co-operatives if they are to attain rooted growth, sustainable development for all in line with this years’ theme: “Cooperative Enterprises achieve Sustainable Development for all.”
 

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