Current Status of Co-operatives (1991)

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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
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                         September, 1991

          (Source Report of a Study by the ICA -The Current
          Status and Development Potential of the Co-operative
          Sector in Namibia- pp.13-21)
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            III. Current Status of Co-operatives
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There are 13 co-operatives on the rolls of the Registrar of
Co-operatives. Four co-operatives are active and the remaining
nine are defunct. Of the remaining four co-operatives, two are
South African co-operatives with branches in Namibia. They are
allowed to carry on their operations under Chapter 10 of the
present serving predominantly the white population.

Registered Co-operatives
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Agra (Co-operative) Ltd was established in 1980, as a result
of a merger of different co-operative societies, to serve the
large-scale commercial farmers. The total number of individual
members are about 5,200. Its main activities are to supply
agricultural equipment, farming inputs and related services
and marketing of members' produce. Marketing of meat, and
supply of implements, inputs and related services accounted
for 93 per cent of the total business. The co-op also carries
out agro-processing activities and it currently operates a
maize mill, animal feeds mill and a sugar packing plant. The
turnover in 1990 was R.355 million and it made a surplus of
R.1.2 million.

Alfa Co-op established in 1964, is a consumer co-operative. It
has around 12,600 members. The co-op operates six outlets,
four in Windhoek and one each in Tsumeb and Swakopmund. It had
a turnover of R.54 million in 1990.

Both the above co-ops are very efficiently run and they are
rendering very useful services to their members.

The two co-ops registered in South Africa and operating in
Namibia are Sentraboer Co-op and Orange Co-op. The Sentraboer
Co-op is an insurance co-operative providing insurance
facilities to farmers and co-operative organizations in
respect of their assets. Its total turnover in 1990 was R.119
million, of which R.3.4 million was in Namibia. 1,470
commercial farmers in Namibia insure with Sentraboer. All the
activities of this co-op in Namibia are carried out by Agra,
which is its member as well as an agent.

The Orange Co-op has a membership of 30 farmers covered by the
Hardap Dam Irrigation scheme. The services provided are
similar to those of Agra. The co-op also provides production
credit to members and guarantees loans from the Land Bank. The
members cultivate generally farms whose size varies between 39
and 50 hectares.

Unregistered Co-operatives
---------------------------
During the last three or four years, a number of small groups
have sprung up to serve the ordinary black persons. Some of
them have taken the form of NGOs and some have organized them
as co-operatives. Some NGOs have taken the initiative to
organize unregistered bodies, since the present co-operative
legislation, inherited from South African regime, is found too
complex by small groups, especially since they comprise poor
people with low education levels.

It is not known as to how many such co-ops exist. However,
their number is not large. According to the information
gathered by the Mission from various sources, their number,
both existing and in the formation process, is about 37. Of
these, ten are credit unions and the remaining are other types
of co-operatives. In several co-operatives, the membership is
predominantly women.

The unregistered co-ops visited by the Mission were as
follows:

Mbangura Woodcraft Co-operative:  Established at Rundu,
Kavangoland, in 1984, it is an artisanal co-operative. It
procures wood and other supplies needed by the members for
carrying on production of furniture and articrafts and
arranges the marketing of members' products. Production is
carried on individually by the members, numbering about 200,
in their homes.

Commission of 10% of the sale proceeds is charged to the
member. In addition, the member pays a fee of R.10 per month.
A grant of R.23,000 has been received from Oxfam.

The co-op has been fairly successful in its operations.
Members' loyalty is good and members have demonstrated
considerable initiative in marketing the products by taking
the truck loads to South Africa. However, marketing continues
to be the major problem. The co-op is in need of training in
marketing management, product development, and management
skills.

`Mbangura' means the wood pecker which can become a good Trade
Mark for the co-op.

Saamstaan Building Co-op and a Credit Union:   The co-ops,
established in 1987, have a common membership of about 600
individuals. However, the majority of the members are women
working as domestic helps with a monthly income of about
R.200.

The Saamstaan Building Co-op has built 18 houses up to
January, 1991. The members contribute labour for producing
bricks, which they do in small groups on weekends. Members
save regularly in the credit union.

The average cost of a house is R.7,000. A member can get a
maximum loan of R.5,000 for house construction. The balance is
met from savings. A member must have saved at least R.150 and
have a plot in order to be eligible for a house loan.

The loans are provided by the co-op out of grants received
from Oxfam, U.K. and Canada. The grants have been converted
into a revolving fund.

The Credit Union receives guidance in book keeping and other
matters from the Cape Credit Union League, to which it is
affiliated.

Saamstan has inspired several groups to form credit unions.

Credit Union Movement (CUM):  This is a name given to a group
of 10 credit unions which hopes to establish a Credit Unions'
League in Namibia. At present all the credit unions are
members of the South African Credit Union League.

The CUM is promoting credit unions among poor people in
Namibia. It is also carrying out educational work for this
purpose, and for promoting other group activities such as
setting up creches, clinics, dance, music, etc. Further, it
assists credit union members to start income-earning projects
such as poultry-raising.

Of the 10 credit unions, six are operational. The rest are in
an educational and training phase.

Namibian Community Co-operative Alliance (NCCA):  NCCA was
established as a Trust in May 1987, to facilitate the process
that aims to raise critical social consciousness of grassroots
people as a pre-requisite for "a bottom-up demand for
democracy and true co-operative development". The main
activities of NCCA are: to activate and animate groups; to
provide skills training; and link groups to sources of
assistance.

NCCA is operating in Namaland in Southern Namibia; currently
15 groups are affiliated to it. Seven groups are Farmers'
Leagues who operate savings and credit schemes. Eight groups
have non-farmer members, mainly women. Some operate credit
schemes; others consumer shops or income-generating/awareness-
creating projects.

Secondary level organizations for both the agricultural and
non-agricultural groups were established in 1990 to operate
revolving loan funds and undertake commonly needed activities.

HIVOS, OXFAM and KAF have provided assistance.

Namibia Katemo Agricultural Co-operative:  The co-op was
established in 1990 at Rundu with the aim of improving the
economic situation of the farmer members in the far North-east
Namibia. It has 40 members, each owning between 18 and 50
hectares. The main activities are marketing of members'
Mahango (millet), and small quantities of beans and
vegetables. Members have received higher prices compared to
those paid by private traders. Capital resources, limited as
they are, are contributed by the members. The co-op was unable
to raise a loan from the First National Development
Corporation (FNDC) as it is not a legal entity.

The functioning of the co-op is at an initial and rather
rudimentary stage. It appears to be in need of training in
accounts, record keeping and marketing techniques.

Nyae Nyae Farmers' Co-op:  This co-op is in operation since
1986. It consists of people living in 23 settlements in East
Bushmanland. A committee consisting of two delegates from each
settlement manages the co-op.

Earlier the bushmen were nomadic people, making a living
through hunting and gathering. Basically the co-op is training
the bushmen members to make a transition to settled life by
imparting skills in cattle raising. Members also engage in
group projects such as road building, water installation, etc.

The JU/WA Bushmen Development Foundation assisted in
establishing the co-op and continues to guide it actively.

Non-governmental Organizations:  During the last few years,
Namibia has witnessed a major growth in the number of both
local and international NGOs operating in the country. At
present, there are about 30 local NGOs in operation, of which
about half are either already active in co-operative promotion
and development work or have the potential to do so. The rest
have such broad ranging interests as literacy, health, human
rights, charity, etc. Their specific activities include
mobilizing and activating economic groups; provision of
vocational and leadership training; counselling; research and
financial support.

Most NGOs are based in Windhoek although having the main part
of their activities in the rural communities. Generally they
get most of their financing from external donors.

The Council of Churches in Namibia has the longest experience
in community development work and could be termed as the
mother of many of the NGOs. However, the Namibia Development
Trust (NDT) has recently established itself as the most widely
recognized community development NGO since it has been
promoted by the most prominent NGOs such as the Council of
Churches, National Union of Namibian Workers, National Union
of Namibia Students Organizations, and SWAPO.

The Mission was impressed by the enthusiasm and keen desire on
the part of NGOs to change the situation of the poor in rural
as well as urban areas. The NGOs see the co-op as an
appropriate self-help institution to bring about social and
economic change for the black communities. The examples of
Agra and Alfa also reinforce their conviction in the efficacy
of the co-op.

The Mission visited most NGOs which had something to do with
co-ops. A brief sketch of some of these NGOs is given below.
Details profiles are given in the annex.

Council of Churches in Namibia (CCN): The Council was
established in 1979. It has set up a Co-operative Development
Desk to assist in organizing groups, providing training in
book-keeping, etc., monitoring progress of groups, and
channelling grants. CCN is currently working with 30 to 40
groups spread all over Namibia.

National Development Trust (NDT): The NDT was set up in 1989
as a service organization to stimulate authentic development
programmes. Its principal activities are similar to those of
CCN. It has established a network of local development
agencies and has become a focal point for deliberation of
national issues such as unemployment, co-operatives, health,
education, etc. The organization enjoys a high standing with
the Government Ministries concerned with development, UNDP and
local and foreign NGOs.

NDT played an important role in the promotion of Saamstan.

National Job Creation Service (NJCS): NJCS was established
under the auspices of the NDT in 1990 to initiate and support
job creation opportunities for Namibians. Its activities
include promotion of co-operatives and small enterprises for
this purpose.

The Legal Assistance Centre:  One of the activities of the
centre is to provide free legal advice to those who cannot
afford it. It has been very active in the defence of Human
Rights.

The Centre assisted the Women's Brick-Making Co-operative in
acquiring a legal status under the Trust Law, since the
present Co-operative Law does not provide for registration of
industrial co-operatives. The Entre is prepared to provide
assistance to voluntary groups and co-ops.

Private Sector Foundation: Important activities of the
Foundation include provision of training and business services
to small enterprises and the informal sector entrepreneurs,
operation of a Mini Loan Scheme and a library service for the
above groups.

The Foundation has provided business training to Women's
Brick-Making Co-operative and is prepared to give such
assistance to other co-operative groups.

Institute for Management and Leadership Training (IMLT):  The
Institute provides practical training and consultation to
farmers in communal areas, small businessmen, and small
entrepreneurs. Financial aid and bursaries are also provided
to persons in these groups. Its leadership training would
equip persons to better manage group and co-operative
activities. The Institute is prepared to offer training to co-
op leaders and personnel.

The Institute's work in the rural areas is very promising.

JU/WA Bushmen Development Foundation (JWBDF): The mission of
JWBDF is to support the self-development of bushmen in North-
east Namibia. It has promoted Nye Nye Co-operative as
mentioned earlier.

Parastatals: Two parastatals, viz. the Land and Agricultural
Bank (LAB) and the First National Development Corporation
(FNDC) assist farmers. The Land Bank assists co-operatives as
well.

Land and Agricultural Bank: The Bank was established in 1979
to assist farmers, agricultural co-operatives and certain
agricultural institutions. Farmers are provided finance for
purchase of land, making improvements in land and purchase of
stock and equipment. Agricultural co-operatives and other
specified institutions are given instalment loans and cash
credit facilities.

The Bank does not provide financing in communal areas, as
ownership of land in these areas vests in the State and as
land is not surveyed.

So far the Bank has given 2,500 loans amounting to R.245
million. There has been no default and no write-offs. An
excellent record indeed!


First National Development Corporation (FNDC):  Established in
1979, FNDC aims to create wealth in all sectors of the economy
by mobilizing and deploying internal and external
technological and financial resources. In the field of
agriculture, FNDC provides credit for new and innovative
schemes in which Land Bank is unable to participate, acts as
the managing agent for government projects and carries out
research and experimentation on behalf of the government.

Currently the FNDC operates several projects in four communal
areas. The objects of these projects are to generate
employment, produce certain basic foods and carry out
research.

The FNDC also assists the informal sector through short-term
financing, training, consultation and providing infrastructure
such as market stalls and complexes for small industries. It
also assists in marketing this sector's products and services.
The informal sector comprises small manufacturers, traders,
and suppliers of services.

Role of Government
------------------

Co-operative Policy:
As stated earlier, the Constitution of Namibia states that co-
operatives as one form of business enterprise will be
encouraged. Recently the President of Namibia on a visit to
Ovamboland called upon people to organize co-operatives.
However, these pronouncements need to be translated into a Co-
operative Development Policy, which is yet to be formulated.

Co-operative Law:
At present the Co-operative Legislation in force is the Co-
operative Societies Ordinance, No.15 of 1946, promulgated by
the Administrator on 18th July, 1946. The Ordinance provides
for the registration of agricultural and trading co-operatives
and their central co-operatives only. These co-operatives can
undertake manufacturing and insurance activities. Any seven or
more persons can form an agricultural co-operative. However,
for formation of a trading co-operative, a minimum of 25
persons are needed.

Tax exemptions, licence duty, and such other fiscal benefits
to co-operatives are also specified by the Ordinance. The
Ordinance empowers the Administrator to prescribe model
regulations for the agricultural and trading co-operatives,
which want to register themselves under its provisions.

The Registrar of Co-operative Societies:
As provided in the Ordinance, the government has designated
one of the Directors in the Ministry of Agriculture as the
Registrar of Co-operatives with an office in Windhoek.
Currently, the Director of Planning, Monitoring, Evaluation
and Co-operatives functions as the Registrar. He has
practically no staff to assist him in his functions as the
Registrar.

The powers and duties of the Registrar are as follows:

i.   to prescribe model regulations for co-operative
     societies;

ii.  to register co-operative societies unless vetoed by the
     Administrator, and to maintain the Register of Co-
     operative Societies;

iii. to receive from the co-ops the documents prescribed by
     the Ordinance such as list of members, annual balance
     sheet and profit and loss account; and

iv.  to call for any pool or trading account of a co-
     operative.

The Ordinance provides for the appointment of Inspectors of
Co-operative Societies with powers to inspect books and
accounts and carry out an investigation of a co-operative
society. Such an investigation would be at the request of a
society, company or a member thereof. The inspectors are also
authorized to audit the accounts of the society, if the annual
general meeting elects to have its audit done by the
Inspectors. The Ordinance does not state that the Inspectors
shall be under the jurisdiction or authority of the Registrar.

An examination of the Ordinance reveals that neither the
Administrator, the Registrar nor the Inspectors of Co-
operative Societies have any unusual or excessive powers to
regulate or control the affairs of the co-operatives.

Ministry of Local Government and Housing:
This ministry under the personal initiative of the Minister,
who is a woman, promoted a women's brick-making co-operative
in Windhoek. Although other ministries including the Ministry
of agriculture are interested in co-operative development,
none of them have promoted or assisted any co-operative so
far.