"Cooperatives have faced some challenges from way back in the 1980s due to the political and economic instability."
PIC: Minister Of trade, industry and cooperatives Amelia Kyambadde. (Credit: Tony Rujuta)
Uganda is celebrating the 94th International Cooperative Day in Nakaseke district Saturday (today). Samuel Sanya spoke to the trade minister, Amelia Kyambadde about the state of cooperatives in Uganda as well as why the cooperatives day is important.
Below are excerpts of what she said . . .
Q. A lot has been said about the decline of cooperatives in Uganda; how factual is this statement?
Cooperatives have faced some challenges from way back in the 1980s due to the political and economic instability. During that period, they were managed by unskilled managers who took over from Indians.It should also be noted that in the past cooperatives were only engaged in agriculture without any diversification, but now they are engaged in a number of activities.The liberalization of the economy also affected many cooperatives which could not cope with the new system. There was also an old law of the 1980s – but now there’s a new law which Government is even amending.
Q. Which are the key challenges facing cooperatives at the moment?
The coverage for cooperatives in terms of service delivery is quite low. Few are always reached compared to the total number of cooperatives registered. This is due to budgetary constraints at the department level.
Others challenges affecting cooperative development include:
- Weak Governance capacity on the leaders of the cooperatives
- Inadequate knowledge and skills on cooperatives by members and leaders
- War debts owed to Cooperative unions
- Inadequate capitalization
- Weak management information systems
- Lack of modern equipment and tools for value addition
- Inadequate storage facilities and infrastructure
Q. What is government’s strategy to revive cooperatives?
Policy and Legal reforms: The Cooperative Societies Amendment Bill was passed by Cabinet in 2015 and gazetted for tabling before Parliament. The Bill addresses the diversification of Cooperatives by improving the safety and soundness of Savings and Credit Cooperatives (SACCOS), enhancing cooperative identity and solidarity, promoting member empowerment and improving governance within cooperatives for sustainability of cooperative enterprises.
Re-establishment of the Cooperative Bank: Stakeholder consultations are being carried out on re-establishment of the Cooperative Bank to provide agriculture and commodity finance. It has been noted and observed that re-establishment of the cooperative bank will play a pivotal role in the development of vibrant and sustainable cooperative movement. The Ministry has set up a committee to come up with modalities of reestablishing the cooperative bank.
Compensation of unions that lost property and assets during the wars: A number of cooperative unions and societies lost assets, property and business opportunities during the liberation wars and insurgencies that plagued the country especially in the 1970s, 80s and early 90s. The loss of property and assets eroded the economic base of the cooperative movement. The government is working on settling all cooperative union war debt claims. Some unions have received full compensation while a few others received part compensation:
- Bugisu Cooperative Union – sh9.12b as a bail out from financial distress
- Banyankore Kweterana Cooperative Union – partial compensation of sh2b
- East Acholi Cooperative Union – partial compensation of sh400m
- Masaka Cooperative Union – partial compensation of sh350m
A verification committee has been set up to verify outstanding claims so that the claims are paid. In addition, sh5b has been secured in the 2016/17 budget to bailout Masaba Cooperative Union. The government will continue extending such support in as much as the resource envelope can allow.
Skills development and knowledge management: Skills development and knowledge management is a prerequisite to the development of a vibrant and sustainable cooperative movement. The Ministry is advocating for the return of the Uganda Cooperative College, Kigumba to the Ministry responsible for cooperatives. This will facilitate the development of training programmes that meet the skills needs of the cooperative movement. A Cabinet Memoto that effect has been compiled and stakeholder consultations are ongoing.
Government is committed to improving cooperative education at all levels of cooperative set up. The Ministry has proposed the review of the education curriculum to include cooperative education at all levels within the education system in the country.
Conflict resolution and arbitration: The Ministry has successfully resolved disputes in a number of cooperative societies.
Value addition: Government through UDC and in collaboration with the Teso Tropical Fruit Cooperative Union Ltd is constructing a fruit processing factory in Soroti. The fruit farmers in the catchment area of the union have organized themselves into 57 primary cooperatives.
The Ministry through the ‘One Village One Product’ Project has supported 25 cooperative societies with value addition equipment. These cooperatives are now adding value to fruits, honey, maize and simsim to mention but a few. Some of the beneficiaries include:
- Kyamuhunga Bee Keepers Savings and Credit Cooperative Society in Bushenyi district received a Honey Extractor; 20 Langstrouth bee hives; 15 sets of harvesting gear, smokers and harvesting tools and a weighing scale
- Labor Progressive Farmers Cooperative Society in Serere district received a maize mill andengine, maize huller and its engine, weighing scale
- Bee Masters Cooperative Society in Mubende district received 28 Langstrouth Bee hives
- Gunguka Okulakulane Cooperative Society in Kalungu district received a maize mill andengine, maize huller and engine and weighing scale.
- KITLAM Bee Keepers Cooperative Society in Kitgum district received a Honey Jars Sealing Machine.
- Namungagwe Area Cooperative Enterprise in Iganga district received a groundnuts crusher.
- Makindye East SACCO from Makindye division, Kampala received an automatic chick incubator (13000 eggs/week) and a poultry feed mixer (600kg/hr).
- MES AMIS Cooperative Society from Luwero district received a poultry feed mill (600kg/hr) and many others.
- The Uganda Crane Creameries Cooperative Union Limited has mobilized resources from within the cooperative movement and development partners for constructing a milk processing plant in Mbarara. Construction of the factory is so far progressing well.
Economic infrastructure management
Cooperatives have been contracted to manage the distribution of prepaid electricity in Bundibugyo, Kyenjojo, Pader and Abim districts. Examples of such kind of cooperatives are Pader Abim Energy cooperative, Bundibugyo Energy Cooperative, Kyenjojo Energy Cooperative. Capacity is being built for others to begin managing such investments.
Commodity Exchange and the Warehouse Receipt System: Government is promoting the Warehouse Receipt System and the commodity exchange as an intervention to improve and ease market access and streamline commodity financing. A Warehouse Receipt System Authority was established to develop the system and a number of producer cooperatives have become bulking centers.
Cooperatives can benefit in the Warehouse Receipt System and the commodity exchange as depositors of commodities, warehouse operators, and financiers (SACCOS) and brokers on the trading commodity exchange.
Q. Why is the international cooperatives day important?
The purpose of International Day of Cooperatives is to increase awareness on cooperatives and promote the movement's successes and ideals of international solidarity, economic efficiency, equality and world peace.
It brings together cooperatives, civil society, financial institutions, policy makers, regulators, academia and other stakeholders to celebrate and review the current state of the cooperative movement, share challenges/ successful experiences and discuss other pertinent issues affecting Cooperatives.
Q. What activities were carried out in this cooperative week?
The Cooperatives Week features a number of events which were planned with the 7 Co-operative Principles in mind as they relate to Uganda and will take part across the Country.
The week started on Friday 24th June where we joined our Muslim brothers and sisters in National prayers for the revival of the cooperative movement and in celebration of the power of cooperation. Prayers also took place in other places of worship on Saturday 25th and Sunday 26th June.
Monday 27th June was the Annual Cooperatives Blood Donation Drive. This is in support of the 7th International Cooperatives principle – “Concern for Community”. In conjunction with the Uganda Transfusion service, my Ministry, our partners and the larger cooperative fraternity worked with regional cooperative networks, operation wealth creation officers and the community at large to donate blood at the 7 Regional Blood Banks.
Tuesday 28th June – Delivering a Cooperatives 5-year Agenda Petition to the 10th Parliament. Cooperators will petition the Speaker of Parliament on a number of issues that are hampering Ugandans from maximizing the full potential of the cooperative movement.
Wednesday 29th June –The I.K. Musaazi Memorial lecture took place at Makerere University Main Hall. The Lecture was under the theme: “Tracing the cooperative steps towards the struggle for Economic development”. The lecture was free and open to the public.
Thursday 30th June – Launch of a nationwide annual tree planting drive by members of the cooperatives societies. Cooperators planted a cooperative tree at every Sub County as a move to encourage investment in tree planting as a sustainable investment option.
Friday 1st July– Exhibition by cooperators at Butalangu Town Council Grounds.
Saturday 2nd July – International Cooperatives Day celebrations and H.E the President of the Republic of Uganda is expected to be the Guest of Honor.
Q. Why should Ugandans attend the celebrations in Nakaseke?
The President who is the Guest of honour will lay a foundation stone for the construction of a modern animal holding facility and slaughter house. Theabattoir is constructed by Uganda Meat Producers Cooperative Union with support from development partners.
There will be recognition of selected cooperators who have contributed greatly to the cooperative movement in Uganda. These will be given awards/medals by the president.
The celebrations started with an exhibition on Friday 1, July. Cooperative societies are exhibiting what they are doing. The exhibition will go on until Saturday.