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How the Co-operative Movement is very much alive in Uganda

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Added 8th February 2016 04:00 PM

The Cooperative Movement, which has been in Uganda for a century is very much alive with many Ugandans in the different sectors.

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By Khadija Nakakande

As the race for the top most position in the country heightens, many of the presidential candidates are making rosy promises to the electorate in a bid to win their votes.
However, only time will tell whether they would be able to fulfill these promises. Among the many promises that some presidential candidates have made is the revival of co-operative societies, giving an impression that there are actually no functional co-operatives.

The Cooperative Movement, which has been in Uganda for a century is very much alive with many Ugandans in the different sectors, especially farmers benefitting from them.
Co-operatives play an important role in the socioeconomic development through the creation of jobs, improvement of member income, enhancement of agricultural production and productivity, the promotion of value addition and social stability.

Because of their contribution towards improving household incomes and wealth creation, the Government has prioritised the revitalisation and development of co-operatives, which has seen more than 16,500 co-operative societies registered in the country by July 2015. Majority of these are Savings and Credit Cooperative Societies (SACCOs) and Agricultural Marketing cooperatives.

Government has continued to create an enabling environment for cooperatives to thrive by strengthening the policy and legal environment. Government passed the first comprehensive National Cooperative Policy in 2011 which has since informed its interventions in the sector.

This policy seeks to: strengthen the cooperative movement; create a conducive regulatory regime and promote compliance, ensure quality assurance, standards and enhance competitiveness and expand the scope of cooperative enterprises
In order to further improve the regulatory environment, Cabinet passed the Cooperative Societies Act (Amendment Bill 2015).The amendments will strengthen regulation and, improve management and operation of cooperatives in the country. The Bill is due for discussion in Parliament and later passed into law.

Co-operatives are increasingly becoming a popular business model and with government interventions, there is a growing trend in cooperative registration and diversification, with 16,587 cooperative societies registered by the Ministry of Trade, Industry and Cooperatives in 2015.

Out of the 16,587, 3,131 are SACCOs, 944 are engaged in agricultural marketing, and others have ventured into energy and safe water distribution, health services, housing, transport, horticulture, tourism, handcrafts, wine production, irrigation, livestock and diary.

In the energy sector, 17 energy co-operatives have been registered and these are involved in power distribution: Pader- Abim Community Multi Purpose Electric Cooperative operating in Pader, Abim, Agago and Kitgum districts; Bundibugyo Energy Co-operative in Bundibugyo district, Kyamugarura Rural Electricity Co-operative Society in Kyenjojo district.

In addition to power, this cooperative distributes safe water to the community. A number of SACCOS are also engaged in the distribution of off grid power solutions to the members.

With regard to the transport sector, cooperatives are involved in the management of lorry and taxi parks following government directive to allow operators manage the facilities. Similarly, Boda-boda cyclists have formed cooperatives for their empowerment. There are 232 drivers and 88 boda-boda based co-operatives.

Market vendors have also been organised into co-operatives in line with the government policy to have the operators participate in management and revenue collection on behalf of the respective local governments. This has empowered the members and safeguarded them from exploitation by external tenderers. As a result of this policy, 105 market based cooperatives have been formed.

In the Health sector, 5 health Cooperatives have so far been registered to enable the communities plan and manage their health situations. Other new areas of diversification include cage fish farming.

Government has encouraged the formation of Savings and Credit Cooperative Societies (SACCOS) which have enabled increased outreach and access to financial services especially in rural areas. By end of the year 2010, SACCOS had a Net Savings of UGX 208.25 billion and Share Capital of UGX 177.761 billions. The outstanding loans as of 31st December 2010 were UGX 292.135 billion and an income of about UGX 62.4 billion.

Cooperatives and Value Addition

There are number of cooperatives that are engaged in agro-processing and value addition activities at different levels of the value chain. Government has initiated programmes that encourage value addition by cooperatives. Through the One Village One Product (OVOP) programme, government through the Ministry of Trade, Industry and Cooperatives has provided equipment to over 40 cooperative societies in eighteen districts in addition to training their members in business proposal writing and value addition skills development.

The value addition equipment distributed include; maize mills and maize hullers with engines, honey jars and extractors, langstrouth bee hives, rice mills, sealing machines, groundnuts crushers, poultry feed mills and others. Beneficiaries of value addition equipment include; Kyamuhunga bee keepers SACCO in Bushenyi, Labor Progressive Farmers Cooperative Society in Serere, Bee masters Cooperative Society in Mubende, Gunguka Okulakulane Cooperative Society in Kalungu, KITLAM Bee Keepers Cooperative Society in Kitgum, Namungagwe Area Cooperative Enterprise in Mbale, Naluwori Growers Cooperative Society in Kamuli district and many others.

Through Uganda Development Corporation (UDC) government has also promoted the formation of Fruit Growers Cooperatives in the Teso region, in earnest, to utilize the fruit factory under construction. To date, 53 such cooperatives have been established.

Cooperatives and Storage

Government established the Uganda Warehouse Receipt Systems Authority to supervise and regulate warehouses. As a result these have improved the quality of commodities traded, reduce transaction costs and enhanced farmers’ income. Such interventions are also aimed at improving storage facilities to reduce post-harvest losses and encourage bulking.

Cooperatives and Export

There are many cooperative societies exporting to regional and international markets. Among these are; Gumutindo ACE, Ankole Coffee Producers, Masaka Cooperative Union, Banyankole Kweterana and Kibinge Farmers Cooperative Society have exported coffee earning the country foreign exchange. Other cooperative exports include; grains, beans and pulses to the regional markets, horticulture to the EU, handcrafts to the EU and the Americas.

Cooperative Financing
To ease access to finance by cooperatives, Government put in place special fund at the Micro Finance Support Centre, out of which they can borrow at favorable rates. Commercial and agricultural loans attract interest rate of 13% and 9% respectively. A number of cooperatives have benefited from this facility and these include the following:
(a)        Lango Cooperative Union    500Million
(b)        Wamala Growers Cooperative Union    500Million

(c)        Kyamuhunga People’s SACCOS    1.5Billion
(d)        Banyakole Kweterana    1 Billion
(e)        Lyamujungu Cooperative Financial Services    400 Million
(f)        Rukiga SACCOS    350 Million
(g)        Mukono- Kayunga Teachers SACCOS    250 Million
(h)        Luwero Teachers SACCOS    150     million

A special funding amounting to Shs. 4.6B has also been extended to Bugisu Cooperative Union Limited to keep the union afloat.

The writer is the public relations officer of the Ministry of Trade, Industry and Cooperatives

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