By Roy Hezron
As Kenya joins the world in celebrating the International Co-operative Day, locally known as Ushirika Day, the National Co-operative Policy has restructured the co-operative movement in the country as part of sweeping reforms in the sector.
Apart from the policy recognizing co-operatives as private business organizations, it has also proposed a new structure that promotes integration and enhances self-regulation.
While retaining the four-tier system to support the growth of the movement, the policy replaces the tier previously known as National Co-operative Organization (NACO) with ‘Federations’ as a way of enhancing self-regulation within the movement.
To facilitate growth within the movement, sector-specific co-operatives will be promoted at the national level.
The replacement of NACOs with Federations will differentiate them from Unions at county level since the Federations, once established, shall offer services to their affiliates in matters of advocacy, market research and promotion, and formulation of sector-specific standards and regulations.
Such will include ensuring that all affiliate societies keep proper records and books of accounts, provide a platform for the advancement of ICT and innovations for its affiliates, and provide education and training to affiliated societies.
They will also establish and enforce a code of ethics for their affiliates in the counties, work with other local, regional and international bodies for the benefit of its affiliates, develop and enforce such standards that shall be necessary for their advancement, and engage in any business to promote the interests of its county subsidiaries as long as the business is not in competition with them.
The new structure seeks to empower the apex organization, the Co-operative Alliance of Kenya (CAK), to play its rightful role of advocacy for the co-operative movement.
Currently, the co-operative movement in the country operates on a four-tier structure where societies are classified as either primary, Union, national or apex.
At the lowest level of the structure are the primary co-operatives that are formed by individual persons, usually as a single purpose or single product enterprise.
In order to enhance economies of scale, the government encouraged the formation of Unions that operated at district or sector levels.
These Unions have their membership drawn from primary cooperatives, and are instrumental in the provision of either specialized services or goods.
At the third level are the National Co-operative Organizations (NACOs), usually specialized vehicles that offer sector-driven services to affiliated primary co-operative societies and Unions.
At the apex is the Co-operative Alliance of Kenya (CAK) that is meant to be the custodian of the cooperative principles and values in the country.
The structure was meant to provide a viable economic unit capable of providing services to members, exploit the economies of scale to ensure the highest possible returns to members, align each co-operative sub-sector with a national co-operative organization to coordinate activities of its affiliates nationally and internationally, and have a strong apex organization to lobby and articulate the interests and concerns of the co-operative movement at county, national and international levels.
According to the new policy, the structure as it exists today cannot effectively serve the movement in the current economic environment since the second and third tiers have basically collapsed or changed into organizations that are not Co-operative in nature or simply gathered themselves into one single tier.
The policy notes that many district co-operative Unions have since collapsed while the sector-specific Unions like Kenya Union of Savings and Credit Co-operatives (KUSCCO) and National Cooperative Housing Union (NACHU) have moved up the ladder and are now recognized as NACOs.
The Co-operative Bank and Co-operative Insurance Company have since ceased being co-operative organisations and are represented in the co-operative movement by the mother co-operatives that own them.
“Most importantly, the linkages between different levels are no longer discernible. Apart from the primary level where membership is clear, all other levels seem to be competing for affiliation from the primary co-operatives,” reads the policy statement in part.
The policy observes that the competition tends to create friction within the movement, especially where the functions of the different secondary organizations appear to be overlapping.
The NACOs and even the apex organization seem to be engaged in businesses that are in direct competition with each other and sometimes with the affiliate primary cooperatives.
“This has not only created conflict within the movement but also caused fatigue among the different players in the sector, resulting in the weakening of some cooperative organizations that are key to the growth of the movement,” the policy further reads.
In the reorganized structure, the CAK shall remain the apex organization with membership being restricted to the Co-operative Federations.
However, secondary cooperatives that are not sector-specific and cannot therefore affiliate to any federation shall affiliate directly to CAK whether they are county or national-oriented.
The apex may admit any organization or society as an associate member without voting rights for the purposes of promoting the interests of the co-operative movement in the country.
The reorganization now gives CAK full mandate over the co-operative movement in the country with its roles being advocacy, representation and promotion of the movement’s interests. It will also promote cooperation, collaboration and linkages among co-operatives and stakeholders through networks at local, regional and international levels.
Principally, it will promote the development of the co-operative movement and advise the government at national and county levels on co-operative matters, as well as serve as custodian and champion of the co-operative principles and values.
It is also mandated to encourage self-regulation and affiliation with regional and international co-operative organizations for the benefit of the Kenyan movement.
The new structure seeks to empower the Co-operative Alliance of Kenya (CAK), which is the apex body in the Country’s Co-operative Structure, to play its rightful role of advocacy for the co-operative movement.
