By Azael Masese
Cooperatives and SME Cabinet Secretary Nominee Simon Chelugui has promised to streamline the cooperative sector to significantly contribute to improving living standards of Kenyans.
While appearing before the National Assembly’s Committee on Appointments recently, Chelugui identified amending the Cooperative Societies Act, strengthening Sacco Societies Regulatory Authority (Sasra) as top in his agenda.
Chelugui regretted that cooperatives have been hindered by poor governance, leadership and management.
Chair of the interviewing panel and National Assembly Speaker Moses Wetang’ula said the story of cooperatives in Kenya is sweet and sour.
“Out there, many average people are very frightened of the managers of cooperatives. Because every cooperative you go to, except a few that have succeeded, the managers are filthy rich and their members are in abject poverty,” regretted the Speaker.
Chelugui admitted that the issue of cooperatives has been a nightmare as people have invested millions but not getting dividends.
“We plan to establish the Ethics Unit working together with EACC to restore order and dignity in the cooperatives,” he promised.
Through the Hustlers Fund, Chelugui projected increased savings towards Saccos hence the need to guarantee their safety.
With cooperatives and the 361 Saccos in major part of the country, he said they will be intermediaries to improve the penetration of the Hustlers Fund.
The Hustlers Fund was among the key manifestos of President William Ruto’s Government.
“That means we will have to strengthen the governance of the Saccos and Sasra needs to be reformed to have the teeth like Central Bank of Kenya (CBK)”, he said.
Strengthening of Sasra will ensure every day, through single platform we can view and see the performance of each Sacco.
This, he argued, will eliminate instances where there are multiple books of accounts one for the regulator, one for the members and another for the Saccos.
Pokot South MP David Pkosing regretted that some cooperatives and Saccos are conduits of swindling money from people.
Imenti North MP Dawood Abdul said cooperatives are running broke as managers, with the connivance of the cooperative officers on the ground are fleecing members.
“What we need to do is to come back with a strong arm of oversight and need to strengthen Sacco Societies Regulatory Authority (Sasra)”, Chelugui said.
He also called on the need to amend the Cooperative Societies Act to empower the Cooperative Commissioner to oversight the entities.
“I will be coming to this House to amend the Cooperative Societies Act to empower the Commissioner of Cooperatives to help in oversighting cooperatives,” he said.
He said that Kenya was advised or misadvised by the structural adjustment programmes to change and remove the oversight by the Cooperative Commissioner.
This led to failures of giant unions in Kenya, notably the Mount Kenya region and other parts and subsequently the collapse of cooperatives.
To reverse the trend, Chelugui called on the need of inspectors at Saccos and cooperatives to ensure there is transparency and accountability in every transaction.
Besides, he said external borrowing by Saccos should be put under control, saying not every financial institution should be allowed to lend to Saccos, arguing that this has been abused.
“We will need to control external borrowing for not everyone should be allowed to lend to a society for we have seen this abused,” he said.
He regretted that some Saccos borrow more than what their asset base is hence exposing them to collapse.
With a presence in 43 countries except in Wajir, Garissa and Mandera, he said he would help register new societies.
“It is my duty and responsibility to promote cooperative movement because we have seen the power of cooperatives in housing and land settlement, education, transport,” he said.
He said that farm and productive sectors such as coffee, tea, pyrethrum and milk deliver more than 70 per cent of the produce through cooperatives
The outgoing Labour and Social Protection CS said the country cannot underestimate the power of cooperatives.
“We cannot underestimate cooperatives but only do better by empowering, grouping people and harnessing their small resources and creating power using the collective savings that we would have realized”, he added.
Who is Simon Chelugui?
CS Nominee Simon Chelugui was born 51 years ago in Mogotio, Sub County, Baringo County. After finishing primary school, he proceeded to Moi High School Kabarak.
He later on joined the University of Nairobi for a bachelor’s degree, management science.
He completed undergraduate in 1996 before partnering with Edward Kiptanui, bought a factory dealing with coffee machinery. He run it for two years and sold it.
Chelugui has been involved in coffee machinery rehabilitation across the country.
“This is going to give me a lot of background knowledge and understanding about the coffee sector which is largely controlled by the cooperative movement,” he said.
Chelugui disclosed that his net worth is about Sh993 million.
Has investments in dairy farm, beef farming and owns rental houses in Nairobi, besides the farms he has in Mogotio, Baringo County.
Chelugui resigned in 2012 to contest for the position of Governor in Baringo County. Did not make it and came back to his business.
He served as director with Betting Control and Licensing Board.
Towards 2017, he resigned and went to run for the position of senator, Baringo County.
He did not make it and was appointed as the CS Water and Sanitation in 2018.
He was moved to the ministry of Labour and Social Protection in 2020 and is the only CS to transition from the previous Government to the current one.