The Dilemma of Co-operatives in Africa (1996)

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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
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                         July, 1996

     (Source: Review of International Co-operation,
               Vol.89, No.2/1996, p.18-25)
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               The Dilemma of Co-operatives in Africa
                         by Calvin M. Kangara*
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Introduction
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Co-operatives offer an opportunity for local people to take
development into their own hands and make it a meaningful
concept at the local level. They have arisen too where the
cost of adjustment to economic change has threatened to
destroy communities, where local people needed power to
control the pace and direction of change in order to preserve
what they value.

Many co-operative practitioners and researchers have noted
that "co-operatives in Africa are today more powerful,
diversified sector, not dominant in the economy as a whole but
playing a critical role in smaller communities and in
particular regions and industries than they were decades ago"
(Fairbairn 1991:10). However it must be admitted that large
numbers have been unsuccessful  or at least have had serious
problems. Cases of corruption in co-operatives make very
attractive media stories and this has lead to popular
scepticism about co-operatives in many African countries.


The Dilemma
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Researchers from the United Nations Research Institute for
Social Development on co-operatives as agents of planed change
(UNRISD) have found that on the whole, co-operatives, in
Africa, have played a marginal role and failed to mobilise the
peasantry towards the structural changes as aimed in most of
their declarations. Instead of removing inequalities, co-
operatives have widened the gap between the rich and the poor,
hence the need to rethink their role and if necessary, to
resort to more promising solutions.

Most co-operatives in Africa have failed for a number of
reasons which have acted simultaneously. Most of the major
problems were outlined during an international conference
entitled "African women in co-operatives" held at the
Institute for Africa Alternatives in England in September
1988.

Firstly, there has been an almost universal lack of resources
even in countries which officially promote co-operatives and
where some levels of success have been claimed such as
Mozambique and Ethiopia. The amount of resources devoted to
their development is in fact very low compared to that given
to other types of development, many of which have also not
been overwhelmingly successful. In some countries like Uganda,
Mozambique, and other parts of Southern Africa there have been
problems of war and external aggression which have led to
instability and economic problems which have severely limited
the resources available. The policies of organisations such as
the International Monetary Fund (IMF) and the trend of
Globalization have been opposed to the development of co-
operatives. Many countries in Africa have had to make drastic
measures in reducing their expenditure especially in the
social sector, which is a key resource for co-operative
development.

Secondly, many of the reasons for failure have been because of
short comings in the state or non governmental
administrations, the large scale membership of many co-
operatives especially in East Africa and also in the types of
technology introduced. Neither of these problems have been
unique to co-operative development. Co-operatives seem to be
very problematic where they arise from state or other external
agency advocacy of particular forms of internal organisation
for doctrinal or ideological reasons. This is particularly the
case when the benefits of co-operation are not clear to the
participants, or in fact, do not exist . A major problem with
co-operative development as with much other development
activity, has been the attempt by state and /or non
governmental bureaucracies to impose structures, activities
and technologies on target populations without sufficient
consultation with or knowledge of those populations and
without sufficient knowledge of the specifics of their social,
economic or market situations or their activities being
promoted. There is also a tendency that results are expected
too rapidly. With the current process of deofficialisation of
large scale co-ops initiated by African governments, we are
seeing (under artificial stimulus of the governments) co-ops
growing in number, but often lacking in true and genuine co-
operative spirit.

Levy (1986) echoes some of the sentiments above when he states
that ''Governments have abused co-operatives by having them
serve as a system of control over the production and marketing
of major cash crops . This has been the subject of repeated
criticism of by students of co-operatives and development''.
He further argues that ''the mere fact of marketing through a
common organisation makes little impact on the social and
economic situation of the average member. The weak bonds with
the co-operative society which very soon becomes an affiliate
to a large monopolistic structure lead the member to expect
the co-op to provide him or her with financial benefit without
any obligation on his or her part, apart from the delivery of
produce''. Weak commitment of members to their organisation
and lack of understanding of its objectives have been found in
a survey of East African co-operatives.

A recent study of the performance of cotton co-operatives in
the Longo District of Uganda has shown their poor contribution
to community growth and member welfare. In the words of the
author of the study, ".....this is due to the distortion of
co-op goals as a result of systematic linkage with the
government administrative machinery which has ensured the co-
op monopsony power. Thus, instead of the co-op resources being
devoted to promoting members welfare and community growth, the
alliance with the government bureaucracy has, to some extent,
increased the siphoning off of some of the resources from the
community and resulted in the diminution of the grower-members
knowledge of and control over the co-operative to their
disadvantage''. (Wanyande,1987: 10-12). The marketing of
pyrethrum in the `one million hectare' scheme in Kenya serve
as a similar example. 

Discriminatory Policies
-----------------------
The social and economic inequality between social classes acts
as a damper to people, especially women who have few means to
join in co-operative ventures  due to the fear of dominance,
and even exploitation by the well-to-do. The poor are often
deterred from joining such groups moreover, due to
discriminatory policies and practices which disqualify them
from receiving the necessary inputs such as credit for farming
or business. For instance, landed security forms the basis of
determining the eligibility of the cultivators for loans in
many countries in Africa. This basis not only discourages the
small and poor from enroling in co-ops, but in their absence
tends to make such organisations the hot bed of vested
interests. In rural communities in most parts of South Africa,
the poor are further discouraged from participating in joint
ventures due to the dominance of elitists elements which stem
from the possession of land, money and authority. The
prevalence of illiteracy and ignorance only aggravates this
situation. As a result, this has lead to the formation of a
great many ''pre-co-operative'' organisation all over Africa.
There do not generally have legal co-operative status but
involve various forms of co-operative working and pooling of
resources to meet the various needs of the poor. Many of these
groups are flexible in their organisations and democratically
run. They are mostly small scale and offer a low level of
income or credit.

In Africa, co-operatives' power and wealth continue to flow to
the business elite of the cities. The emphasis on profits and
profitability has resulted in the growth of individualism. As
rightly argued by most researchers and practitioners in co-
operative development, within the profit-oriented model, it is
assumed that individuals choose to invest in one region  or
another solely in order to maximise the direct financial
return. The problem is that a reliance on individual behaviour
can lead to the worsening of the economic well-being of whole
communities. As capital flows out to more profitable
locations, economic activity in the community declines,
resulting in a downward spiral. Profits generated should be
reinvested in order to provide better services, or a wider
range of goods in the future. In Kenya, most coffee owners
have continued to invest profits generated from coffee sales 
in the now most marketable construction industry in major
urban centres in Kenya. This has lead to a high rate of
unemployment amongst coffee growing communities leading to
migration from the rural to urban areas n search of
employment. This migration is threatening the social cohesion
of these rural communities and may finally lead to their total
destruction.

The Way Forward
----------------
In order for co-operatives to be effective, there is need for
them to change their current institutional set ups. This would
enable them to respond to the current socio-economic problems
they currently face as well as constraints caused by
globalization. They need to adopt community-based approaches
and root themselves in communities. Co-operatives detached
from their community base are easy prey to administrative
control and manipulation from within and from without the
community. By this means co-operatives will gain legitimacy in
the eyes of communities as well as attracting external support
from banks and voluntary organisations. In order to strengthen
the capacities of existing and emerging co-operative
institutions, there is a need to develop alternative training
geared towards genuine empowerment of local communities.

An effective response to the critical situation created by
global markets and the changing and effects on the environment
will, for two reasons involve action at the local community.
Firstly, global changes undermine the ability and
effectiveness of central governments to respond to socio-
economic problems. As further argued by Fairbairn (1991:15)
"globalization means that local communities confront the world
more and more directly, with less and less mediation or
protection from higher levels of governments at least for the
time being". "By default, it must be the community that acts",
he concludes.

The second, and deeper reason why the response must come at
the community level is that globalization is a paradigm that
involves the reduction of the power of the communities.
Community power is replaced, on one hand, by concentrations of
power in transnational or powerful lobbies and, on the other
hand, by consumerism, as individuals oct alone in the big
market and split  away from their communities. Any response to
globalization that stays within this paradigm of concentration
and consumerism will fail to address the real problems
Fairbairn (1991), Mustafa (1986:32), and Wanyande (1987). If
people try to respond to globalization by calling on the
government to save them, they are abandoning their own power
and responsibility. They will merely reinforce the causes of
the problem.

Strategies to overcome these external forces include, firstly,
the development of local industries which are more diverse,
more environmentally sustainable, and have the support of the
society. Again, within these limits, they must be efficient
and well supported by infrastructures for education,
information, and marketing. The farms and rural communities
will have to be less agricultural, while urban communities
will have to diversify their local industries. Communities
will have to develop more locally based businesses in any and
every field. For rural communities, it will, be convenient if
the businesses are farming-related industries, if they add
value to agricultural commodities, or if they manufacture
goods for export, in other words, the kinds of endeavour that
people generally think of as diversification. The primary
goal, however, should be to allow people to stay in viable
communities and have a higher quality of life. This goal is
equally well-served by new businesses in local services,
retailing, health care, child care, or in other enterprise
that local people will use.

Training should embrace both co-operative education and
community development which takes in far more than just the
economy. Community development involves processes of education
and empowerment by which local people take control and
responsibility for what used to be done for them. There are a
number of elements of the community development paradigm that
are important to understand and that relate directly to co-
operatives. First, in relation to the definition of
development, community development invariably requires people
to learn to think in new ways, to question their assumptions
and decide what is really essential to leading a meaningful
life. Community development depends fundamentally on the
greatest possible decentralisation of power, knowledge,
control, and wealth. The local autonomy of democratic co-
operatives is one example of this principle. Craig, (1993:15)
observes that ''co-operatives are rooted in communities and
must respond to their members and communities interest''.
Local control over decision-making is a powerful attraction
that draws people to support co-operatives. The participation
of people  in co-operatives can encourage individuals to think
communally rather than in an individualistic manner. As noted
by Craig (1993:28), the co-operative is often a centre where
social activities occur that sustain the life of a community.

It is obvious that the scale of attempts to improve co-
operatives in Africa at any particular time must be at least
partly  contingent on their actual or foreseeable contribution
to the national economy. It is also true that the initial
training and administrative input is high for co-operatives if
one is dealing with underprivileged groups with few resources
and little experience.

However this would be minimised if more of an attempt was made
to build on the skills, technologies and co-operative networks
already existing in societies in Africa and if attention was
initially focused on situations where the benefits to
participants of co-operation are most obvious. There are many
possible organisational forms which would conform to the basic
co-operative ideological principles. Changes in certain
details of management and incentive systems could improve
functioning.

In recent years, increased emphasis has been placed on
procedures designed to expose targeted communities to the
philosophy and practice of co-operation by encouraging them to
combine in loose co-operative organisations. This approach has
two variation. The first is represented by cases where the
promoters have adopted a formal procedure of observing and
testing the motivation of local communities to join in a co-
operative. This approach governs the procedure adopted by the
Kaira District Co-operative Milk Producers' Union Ltd in
Anand, India for setting up primary co-operatives of milk
producers at the village level. The efforts of the Anand dairy
co-operative have organised nearly 140 model farms and
encouraged visits of people from the different parts of the
country to study and learn the Anand model. The demonstration
of the gains and benefits of successful co-operative
enterprises has usually proved influential in stimulating the
formation of other co-ops.

The second variation consist of the adoption of formal and
statutory procedures to encourage the organisation of
communities in pre-co-operatives for a probationary period. As
mentioned earlier a pre-co-operative is an intermediate form
of organisation between a co-operative group and a registered
co-operative society. Illustrative of this approach is the
legislation adopted by the governments of Algeria, Cameroon,
Dahomey, Ivory Coast, Niger, Togo and Mali. Generally, the
legislation has two objectives: To acquaint the group with the
formal and the informal working of a modern corporate
enterprise like a co-operative; and to protect them from
falling into the same mistakes as committed in the past. The
numerous self help groups in East Africa would provide an
excellent opportunity for home grown community co-operatives.

In Mali, since the UDPM rule in 1979, rural co-operatives have
been structured on the basis of the 'Ton villageois', a
village association of a co-operative and mutualist nature
which is freely joined by villagers. These are based on
traditional structures of mutual assistance groups for work
and festivals based on age groups. Among other things they are
expected to ensure the marketing of cash crops, the provision
of production inputs and consumer goods, and the organisation
and administration of agricultural credit. There were 1200
`Ton' and  other village associations in 1986. This number had
almost doubled by 1994. Nearly 15% of the population belong to
co-operatives which handle the supply of foodstuffs and other
consumer goods to the population, the marketing of
agricultural produce, handicrafts, food crops, water supply
and management amongst other things. They have not been
entirely successful but they have  managed to improve the
productivity and income for their community members in the
region.

Through this initiative, a national movement consisting of
grassroots co-operatives has been created (FEDEV). The
movement is based on co-operative principles at all levels
with the village organisations taking most of the decisions .
The mini  assembly is rotated to provide opportunity for all
the groups to participate and become familiar with the
functioning of co-operatives. Financial support in developing
the FEDEV movement is being provided from a number of
international organisations including Christian Aid in the UK
and US and Canadian funding sources.

There is also a need for a lot more research and discussion on
what type of co-operatives structure is likely to be most
successful in what type of situation and on the different type
of worker incentive and management systems which have been
evolved. Discussions should be extended to grassroots
communities and involve every institution and individual
within the domain such as politicians, community
representatives, NGOs, and the private sector. 

Community co-operatives should engage in product exchange
strategies in regions where the economy seems to be failing
such as in Africa. In Uganda, two community based co-
operatives, one urban based and the other rural based are
undertaking such an initiative. The urban based co-operative
`exports' gravel, a raw material used in construction to the
rural community. Gravel is very cheap and abundant in urban
areas than it is in rural areas of Uganda. In exchange the
urban based co-operative takes back banana fibre from the
rural group which  they use as raw material for their hand
craft enterprise. Banana fibre is less available and too
expensive in urban areas. The same truck belonging to the
urban co-operative which transports the gravel to the rural
co-op is used to transport the banana fibre back to the city.
This way the two co-operatives are able to save more money on
transportation as well as conserve energy as only one truck is
used. Both community co-operatives have benefited greatly from
this initiative, which has enabled them to access resources
for which cash is not readily available in their communities.
The rural group is able to construct affordable decent
shelters for its members while the urban group has increased
sales due to attractive prices for their banana fibre
products. Currently a local non governmental agency in Uganda
is assisting the community to develop an appropriate and fair
"community exchange currency". The Ugandan government has
lauded the product exchange strategy being undertaken by the
two co-ops and has expressed an interest in providing advisory
support. 

The economic returns of co-operatives should be reinvested in
developing new businesses and in community development 
programmes such as childcare, primary health care, and
literacy programmes etc. This creates a potential social
infrastructure for viable communities on which successful co-
ops are based. It gives the co-ops legitimation in the eyes of
the communities and authorities and improves their access to
sources of external support. More action oriented research
should be undertaken particularly on motivating factors,
objectives and systems of these ''pre-co-operatives'' in
Africa (Anyanwu:1988), in order to understand indigenous forms
of co-operation. This may help to transform the co-operative
movement in Africa. The problem of having state sponsored,
state partnered and state-controlled co-operative may not end
unless the process of deofficialisation of large scale co-
operatives fully involves the NGO sector and the target
community. The process must sometimes be aggressive and
radical through NGOs and target communities as most
governments in Africa are reluctant to institute appropriate
measures that allows an effective transformation of co-ops
movements. In urban areas, very few community co-ops exist,
the attractive market features of urban areas have attracted
huge multinationals especially in consumer industries. The
establishment of processing and industrial units as well as
housing and co-operative wholesaling and retailing entails
heavy capital investment which the urban community finds
difficult to mobilize. This features of urban areas if tapped
can generate very strong and successful community co-ops given
the concentrated location of population and the huge market
for consumer services.

Conclusion
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I have discussed the dilemma of co-ops in Africa and how they
can improve their approaches in the achievement of meaningful
development for underprivileged communities. It is evident
that the current operations of co-ops organisation in Africa
have not been effective in their attempt to try and  suppress
the widening gap of inequalities between he different social
and economic classes in Africa. Co-operatives in Africa are
failing because they have continued to adopt traditional top-
down bureaucracy state interference and detachment from
communities.

In order to strengthen co-ops in Africa, a conscious effort
must be made to deofficialize large-scale formal co-ops and
link community development and co-ops. There is need for an
increased role for voluntary organisation in support of
community development activities. Community groups should be
organised into co-operatives and provided with leadership
training. Conscious efforts should be made in developing the
transitional growth of co-ops from pre-co-operatives
(informal) to co-operatives ( formal). This provides an
opportunity for community groups to understand the objectives
and working of the co-operative before adopting an official
co-operative structure. More appropriate training and
educational needs to be developed which is responsive to the
current trend of globalization. This way co-operatives in
Africa will be potential instruments for social and economic
change for the under privileged class, the main goals for co-
operatives.


References
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Craig, J.G. (1993), "The Nature of Co-operation". Montreal:
Black Rose Books.

Fairbairn, B. (1991), "Co-operatives and Community
Development". Saskatoon: Centre for the Study of Co-
operatives, Univ. of Saskatchewan.

Levi, Y. (1986), "Community and Co-operatives in Participatory
Development. London:Gower.
Mustafa, K. (1986), "Participatory Grassroots Development in
Africa- Report from a GRIS Workshop in Tanzania." Development:
Seeds of Change, 2(3):91

Wanyande, P. (1987), "Women's Groups in Participatory
Development Experiences Through the Use of Harambee."
Development: Seeds of Change, 2/3:96-100. 
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* Mr. Kangara is currently pursuing a Masters Degree in
Environmental Studies (MES) at York University in Canada,
concentrating on community development and participatory
development.