Recommendations (1991) - Part 1

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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.22-40)
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                       IV. Recommendations
                       *******************


The problems and needs identified by the Mission formed the
basis of the recommendations presented below. The Mission has
made its recommendations within the framework of the
development perspectives and the objectives, policies and
priorities embodied in the General Policy Statement of the
Government of Namibia. The Mission had presented its tentative
conclusions and recommendations at a representative meeting
attended by the Deputy Minister, Permanent Secretary and
Registrar of Co-operative Societies from the Ministry of
Agriculture, representatives of co-operatives and NGOs. The
meeting was in general agreement with the views of the Mission
and made some useful suggestions which have been taken into
consideration while making the recommendations which follows.

1. Co-operative Development Policy
----------------------------------
At present, there is no Co-operative Development Policy. The
Mission regards the formulation of a co-operative development
policy as a matter of the highest priority, since such a
policy will give guidelines for the preparation of a new co-
operative legislation and set the goals, priorities, strategy
and plan of co-operative development.

It is important for the future recognition of the Policy that
it is developed jointly by the co-operative sector, including
the various non-registered co-operatives and NGOs which
operate within this sector, and the Government of Namibia.
Such mutual collaboration will ensure a realistic policy based
on the experience and needs of the co-operatives and its
efficient implementation by co-operatives and the NGOs who
will assume the main responsibility for co-operative
development.

It was decided by the Permanent Secretary at the
representative meeting referred above that a working group,
chaired by the Registrar of Co-operative Societies, will be
set up by the middle of March, 1991 to prepare a draft
position paper on Co-operative Policy by the middle of August,
1991. It was further agreed that a Co-operative Policy
Workshop will be held for two days in the latter part of
August under the auspices of the Ministry of Agriculture and
the ICA to prepare a final proposal on Co-operative Policy for
consideration and adoption by the Minister of Agriculture and
the Cabinet of the Government of Namibia. The meeting
recommended that the co-operative policy be adopted and
promulgated by the middle of September, 1991.

The Mission recommends that the proposed Co-operative Policy
comprise the following main elements:

i.   Aims of the policy,
ii.  Target groups,
iii. Women's involvement in co-operative development,
iv.  Economic areas in which co-ops would be encouraged,
v.   Social dimensions,
vi.  Economic viability,
vii. Role of Government in co-operative promotion:
     a.   Enactment of new co-operative law;
     b.   Affirmative actions;
     c.   Infrastructural and fiscal incentives;
     d.   Co-operatives' access to credit and markets,
viii.Role of NGOs in co-operative development,
ix.  Building central co-operative organizations, and
x.   Human Resource Development.


The details regarding implementation which was agreed to by
the meeting are given below under the heading: `Co-operative
Policy Dialogue'.

                    Co-operative Policy Dialogue
                    ****************************

Objective:     To have the co-operative policy adopted by the
               Cabinet of Namibia.

Process:
Step 1.   Preparation of a Discussion Paper on Co-operative
          Policy; Duration: 15th March - 1st May 1991.

     a.   Constitution of a working group and a reference
          group by the Ministry of Agriculture, Fisheries,
          Water and Rural Development by 15th March, 1991.

     b.   Selection of a coordinator for the working group,
          preferably from a research body.

     c.   Deliberations by the above groups for preparation of
          a discussion paper on Co-operative Policy.

     ICA input:     advise on any specific questions the group
                    may refer to the ICA.

     d.   Production of a Discussion Paper on Co-operative
          Policy by 1st May, 1991.

Step 2.   Transmission of the Discussion Paper to the ICA by
          10th May, 1991.

Step 3.   Co-operative Policy Workshop in August 1991 in
          Windhoek.

Step 4.   Adoption of the proposed Co-operative Policy by the
          Cabinet of Namibia by the 15th of September, 1996.


                    Co-operative Policy Workshop
                    ****************************

Objective:     To prepare a final proposal on Co-operative
               Policy.

Participants:
     a.   Representatives of the Ministry of Agriculture,
          Fisheries, Water and Rural Development.

     b.   Representatives of the Co-operatives and NGOs, and

     c.   Representatives of the ICA and SCC.

          (10-15 participants in number)

Dates:    Two days in August 1991.

2.   Co-operative Law
----------------------
The Co-operative Societies Ordinance, No.15 of 1946, which at
present governs the registration and operations of co-
operatives is inadequate from several points of view. (i) The
ordinance does not have provisions for registration of
societies other than agricultural and trading (consumers) co-
operatives. Credit unions, industrial co-operatives, housing
co-operatives and fishery co-operatives which would be needed
in the future cannot obtain legal status under the present co-
operative law. (ii) In the former regime, the administrator
had the ultimate authority also concerning co-operative
matters. The issue who should have this responsibility has
not, as yet, been provided in the Co-operative Law. (iii) The
Ordinance provides special status to co-operatives registered
in South Africa. (iv) Pre-cooperatives need to be recognized.

The Mission, therefore, recommends that the Co-operative
Societies Ordinance be replaced by a new Co-operative Law
which is simple and which would facilitate registration of
small co-operatives of diverse types. The need for granting
special status to co-ops registered in other countries such as
South Africa may also be carefully examined. It is suggested
that the drafting of a new Co-operative Law be taken up
immediately after the adoption of a Co-operative Policy by the
government. For the interim period, some amendments to allow
for registration of different types of co-operatives,
especially small ones, be carried out.

The Mission also recommends that a Manual in simple language
explaining the provisions of the present Co-operative
Ordinance and the Model Regulations be brought out by the
Ministry, if necessary, with the help of indigenous bodies
like the Legal Assistance Centre. The Ministry should also
prepare model bye-laws for various types of co-operatives to
facilitate the easy organization of co-operatives by
relatively less educated people.

It is further recommended that external technical assistance
be obtained for drafting the new co-operative law.

3.  Role of Government
----------------------
It is important that co-operatives function on an autonomous
basis with the minimum regulations which may be needed to
protect the interests of the members and the general public.
Experience all over the world indicates that co-operatives
grow best when individual and group initiatives based on
common needs and democratic decision-making are allowed to
flourish in an atmosphere of freedom with a certain measure of
affirmative support - infrastructural and fiscal - for the
disadvantaged groups. Keeping these considerations in view,
the Mission recommends that the government's role in co-
operative development may be defined as follows:

i)   to promulgate co-operative development policy;

ii.  to enact a new co-operative law;

iii. to establish the office of the Registrar of Co-operative
     Societies with the sole function of registration of co-
     operative societies and administering the Co-operative
     Societies Act; this implies a relatively small office
     with few but competent personnel.

iv.  a.   The Registrar may also facilitate interchange of
          experience among co-operatives through the
          establishment of a Co-operative Forum until a
          Central Co-operative Organization takes over this
          function.

     b.   The Mission recommends further that the office of
          the Registrar may be continued under the authority
          of the Ministry of Agriculture for an interim
          period. However, in view of the fact that there is
          considerable scope for non-agricultural co-
          operatives as well, it would be appropriate to place
          the Registrar under the Prime Minister's office.

     c.   The purely legal functions may be carried out by the
          Registrar. The concerned ministries may give the
          needed technical support to co-operatives in their
          spheres of activities, e.g. Ministry of Local
          Government and Housing to give technical guidance
          and support to housing co-operatives; Ministry of
          Agriculture to agricultural co-operatives, etc.

v.   to allow the private sector to assist in the
     establishment of an autonomous co-operative audit service
     for audit of co-operative societies as per the Co-
     operative Act;

vi.  to provide the needed infrastructural and fiscal support
     to, as well as make arrangements for, co-operatives to
     have access to credit and markets, and to create
     conditions which promote a market-oriented agricultural
     sector;

vii. to provide needed support for development of human
     resources of co-operatives; and

viii.to facilitate the flow of international financial and
     technical support to co-operatives, including movement-
     to-movement collaboration.

4.  Role of Non-Governmental Organizations (NGOs)
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The Mission recommends that the NGOs be encouraged to play an
important part in the promotion and development of co-
operatives. As mentioned earlier, several NGOs are already
playing an important role in this regard. Important tasks in
this regard are:
i.   promotion of co-operatives;
ii.  education of potential members, including women, prior to
     the formation of co-operatives;

iii. education of members and committee members, with special
     emphasis on female members;

iv.  staff training/development, including promotion of women
     as co-operative officers;

v.   management consultancy, including feasibility studies;
     and

vi.  research.

Each of these are specialized tasks. NGOs with experience in
community development and group organization such as the
Council of Churches, NCCA, NDT, and the Credit Union Movement
can concentrate on tasks (i), (ii) and (iii). Organizations
like the Private Sector Foundation and the Institute for
Management and Leadership Training could concentrate on tasks
nos. (iv) and (v).  Research may best be carried&out by
institutions such as Namibia Institute for Social and Economic
Research, University of Namibia.

The two successful co-operatives viz. Agra and Alfa are also
prepared to assist in co-operative development in communal
areas and in urban centres. These co-operative organisations
have a knowledge and experience of Namibia which will be of
great value in the development of an expanded co-operative
sector. (Agra deals with agricultural inputs supply and
marketing and Alfa, with consumer matters.) However, they
would like that the costs of development be borne by the
government and/or external donor agencies.

Since there would be several NGOs working in the field, it may
be useful to establish a mechanism for co-ordination and
information exchange. The Co-operative Forum proposed earlier
could perform these tasks.

The above recommendation is based on the belief that co-
operative organizations would grow better if they emerge on
the basis of felt needs of the people and the efforts of
institutions which, unlike the Government, do not have powers
to command obedience directly or indirectly. Experience in
most developing countries show that close government
association in co-operative promotion and development has led
to a situation where co-operatives have tended to the
parastatal institutions or simply an extension of a government
department dealing with co-operatives. Hence the emphasis by
the Mission on the NGOs.

5.   Co-operative Development Potential
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The Mission identified the following sectors of the Namibian
economy to which co-operatives can make a significant
contribution.

i.   More than 70 per cent of the population lives in communal
     areas. Production and the living standards of people in
     these areas are very low. They live on what is called
     `subsistence agriculture'. This condition needs to be
     changed by raising productivity of both cattle and crops
     so as to generate a marketable surplus.

ii.  Commercial production of crops is at present limited.
     Namibia imports nearly 60% of food grains. Self-
     sufficiency in food is important from the point of view
     of food security. Production of mahango (millet), maize,
     wheat and other cereals needs to be stepped up.

iii. There is a substantial acreage of unutilized land which
     is mostly in communal areas. Nearly one-third of this
     land is suitable for mixed farming, and the rest for
     stock farming only.

iv.  Namibia has the potential of developing irrigation
     facilities mainly in the Northern communal areas. Crop
     production in these areas can be diversified. Vegetables,
     fruits, sunflower, rice, cotton, groundnut, and sorghum
     are some of the crops that can be grown in the Owambo,
     Caprivi and Kavango areas. Several of these products are
     currently imported from South Africa.

v.a. There is considerable scope for development of agro-
     processing in respect of commodities which are exported
     as raw materials and brought back as processed products.
     These products are red meat, Karakul pelts, hides, and
     wool.

  b. Establishment of animal feed mills, and production of
     dairy products such as butter, cheese and powdered milk
     also offer opportunities for import substitution. Animal
     feed mills would help cut production costs and would make
     poultry, pig and dairy farming competitive vis-a-vis
     imports.

The above account shows the need and scope for developing
agriculture as a provider of food, employment and income.
Increased agricultural productivity and a dynamic agricultural
sector can provide, a firm base for successful national
development and coupled with population control can show a way
of development and coupled with population control can show a
way of resolving he African dilemma. However, the small
farmers must get access to credit, agricultural inputs such as
seeds and fertilizers, agricultural implements and be able to
process and market their produce at remunerative prices,
thereby allowing subsistence farming to be transformed into a
market-oriented farming. Agricultural co-operatives and agro-
processing units on a co-operative basis needs.to be
established to provide the small-holders with services and the
bargaining power that can be mobilized only through collective
action.

vi.  Inland fish farming in rivers and dams/ponds can be
     developed as a source of income for people living on the
     river banks and for raising nutritional levels.

vii. There is scope for developing cottage and small scale
     industries, which will also generate employment. The
     Mbangure Woodcraft Co-operative in Rundu and Women's
     Brick-making co-operative are indicative of the
     possibilities in this field.

viii.The development perspectives outlined by the General
Policy    Statement of the Government of Namibia (chapter 2)
          stress the needs for increased domestic savings and
          developing programmes of affordable housing for the
          less advantaged. Institutional mechanisms in the
          form of credit unions need to be established
          especially for fixed income-earning people in mines,
          factories, government services, commercial
          establishments, and the informal sector to promote
          the habits of thrift, mobilize savings and help
          members with low interest loans in times of need.

ix.  Housing co-operatives can make an important contribution
     as shown by Saamstaan co-operatives in encouraging
     members to save and in helping them to build their own
     houses through self-help methods.

6.  Types of Co-operatives
--------------------------
Various types of co-operatives can be formed in communal and
urban areas with a view to making a significant contribution
to improving the economy of persons with moderate and low
incomes. In so doing, co-operatives will develop people and
people's participation in economic development of the country.

The Mission recommends that the following main types of co-
operatives be organized:

a.   Communal Areas:
     -    Agricultural Marketing and Inputs supply;
     -    Fisheries;
     -    Savings and Credit;
     -    Consumer;
     -    Handicraft, cottage and small-scale industries;

b.   Urban Areas:
     -    Savings and Credit;
     -    Housing;
     -    Industrial and artisanal;
     -    Consumer;
     -    Insurance;

c.   Commercial Areas:
     -    Agricultural Marketing and Inputs supply;
     -    Savings and Credit;
     -    Insurance;
     -    Consumer;
     -    Industrial (Food processing)

The organization of separate consumer co-operatives may not be
feasible in rural areas. In such cases, the producer co-
operatives may stock and supply basic consumer goods.

Insurance is an important need. Sentraboer at present provides
insurance to farmers and co-operatives in respect of their
assets. The feasibility in due course of establishing a
Namibian Co-operative Insurance Society of their own to cover
life and general insurance or providing these services to
members even in communal areas through appropriate link-ups
with Sentraboer and other insurance companies should be
investigated.

Keeping in view the experience the world over, the Mission
does not believe in the concept of `Co-operative farming'
which means collectively operated farms. Such experiments in
all countries including developing countries have failed. In
countries where co-operative collective farming was pursued as
a national policy, it brought ruin not only to the
participating farmers but also disaster to food production and
agricultural economy as a whole. Hence the Mission strongly
advises against co-operative collective farms, despite their
ideological appeal.

7. Organization and Structure of the Co-operative Sector
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Experience in numerous African and other developing countries
have shown that a top-down approach for development of co-
operatives - in fact for social and economic development in
any sector - has not been successful. People's participation
is therefore emphasized as a key to development in all
development programmes.

The co-operative sector normally comprises primary or base
level co-operatives which federate themselves into secondary
and tertiary co-operatives to secure economies of scale and
bargaining power as well as to hire appropriate managerial and
technical personnel. Governments have often taken the
initiative in organizing co-operatives at the grass-roots
level as part of development programmes. Co-operatives are
then looked upon more as a tool of development and an
instrument of achieving government objectives rather than as a
people's (members') institution to serve basically members'
needs and interests. Also the speed of organizing co-
operatives has often been fast without adequate educational
preparation of members. Further, national co-operative
organizations are often set up at an early enough stage in the
hope that they will spearhead co-operative development and
take over development functions performed by the government.
These aspirations have generally not materialized. National
organizations have remained weak without adequate reciprocal
relationships of effective services to members and in turn
member support to them. Further co-operatives at all levels
have remained dependent upon governments for a long period of
time and have been construed as government outfits by members,
thereby negating the very concept and spirit of co-operation.
Hence the Mission recommends that a grass-roots First or
Bottom-up approach be adopted in co-operative development.
Secondly, no super structures in the form of secondary and
national co-operative organizations be established unless
sufficient number of local co-operatives are formed and unless
these co-operatives themselves decide to set up higher-tiered
co-operatives.

We envisage that the above recommendations would be
implemented by the NGOs and the grassroots co-operatives.

The Mission recommends that efforts should be made to have one
integrated co-operative sector which would link together co-
operatives in all the three areas mentioned above,
irrespective of whether the co-operatives have predominantly
white or black people as members. A divided co-operative
sector will not be able to achieve the social and economic
goals of co-operatives; nor will it become an effective
countervailing force vis-a-vis the private enterprise. It
should, however, be recognized that this would not be an easy
task in view of the historical reasons and the still prevalent
sharp social and economic divisions. Nevertheless, it is
important to set this as a long-term goal, keeping in view the
national policy of reconciliation and the co-operative values
of harmony, equity and communal amity. Progress towards this
goal would call for far-sighted sagacious leadership on the
part of already well-established co-operatives and the newly
emerging co-operative groups.