The cooperative movement scorecard a decade into devolution

On August 27, 2010, Kenya adopted a new Constitution, quickly forming the Transition Authority whose key mandate was to take stock of government assets across the country and oversee their transfer to counties, where applicable.

As the country gears up to mark the 10th anniversary of the devolution, there are so many things to take note of. What are the effects of devolution on the cooperative sector for example?

The cooperative sector was among those devolved to counties as per the Fourth Schedule of the Constitution.

Accordingly, the then cooperative policy, legal and regulatory frameworks had to be ‘aligned’ to the new constitution.

Interestingly, the sector continued to operate as usual completely oblivious of the changed ecosystem until around 2015.

This is evidenced by the fact that while Parliament amended many targeted Acts of Parliament between 2012 and 2016, the amendment of the Cooperative Societies Act, Cap 490, remains work-in-progress 10 years after the sector was devolved.

The Kenya Law Review Commission (KLRC) issued guidelines on the steps to take in formulating appropriate policies and enacting legislations to implement devolution at the county and national level.

According to the KLRC, all Acts of Parliament, including the Cooperative Societies Act, Cap 490 of the Laws of Kenya and the Sacco Societies Act, 2008 (Cap 490B), regulating devolved functions were to be aligned to the new Constitution.

However, it’s worth noting that in ideal circumstances, policy formulation should precede the enactment of legislations.

Some key mandates of the national government include formulation of the national policy and delineation of various functions to be classified as exclusive, concurrent/ shared or residual. 

A good example of a concurrent function in the cooperative sector is the registration of new cooperatives, where the counties do the promotion while the national government does the registration.

After a protracted process, the National Cooperative Policy was finally delivered in 2019 and it thereafter transmuted into ‘Sessional Paper No 4 of 2020’ after undergoing due process.

However, as we speak, the progress is yet to be made public.

The Acts of Parliament that conflicted the spirit of devolution, including the Cooperative Societies Act, were to be aligned to the new constitution through repeal or appropriate amendment.

Counties were required to customize both the National Cooperative Policy as well as the amended Cooperative Societies Act respectively once they were in place.

A few counties like Meru and Makueni moved expeditiously to make their own laws ahead of the formulation of the national policy. However, many counties are still stuck not knowing exactly where to begin. 

Presently, the government is in the process of fine-tuning the Cooperative Bill, 2021 to reflect the emerging trends in the cooperative sector, among them the impact of information technology on the sector and how the sector can be transformed to survive and thrive.

Due to inadequate or lack of proper orientation of counties, including cooperative officers, anyone will vouch for the fact that the sector requires urgent capacity building sessions for various practitioners.

However, the sector can only receive serious attention from the county governments and assemblies if counties pass their own county policies and enact their own county laws.

Cooperative officers need to be properly orientated on their functions in order for them to confidently guide the cooperatives under their jurisdiction.

The government has lately identified cooperatives as suitable financial intermediaries for the Hustler Fund but on the flipside, such a partnership that is not demand-driven will only derail cooperatives from their core objectives.

We’re looking forward to a more vibrant sector like the one we had in the 80s/90s before it was liberalized vide the Sessional Paper No.6 of 1997.

By Fred Sitati

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