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The Cooperative Movement in Africa

by Damian Reyes ACE 254 - Economic Systems in Africa University of Ilinois at Urbana-Champaign

Luis Damián Reyes Rodriguez

on 21 April 2010

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Transcript of The Cooperative Movement in Africa

Cooperatives in Africa History Present Impact by Damian Reyes 14 400
2 850
10 640
50 000
5 000
7 476
-- “...an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise”

(International Cooperative Alliance) Social Protection Cooperatives Reinforce Informal Solidarity Mechanisms HIV/AIDS educational agents Kasojetua Youth Group, Namibia financial support to orphans and widows/widowers Kilimanjaro Native Cooperative Union,Tanzania SACCOs have insured
emergency loan schemes
health micro-insurance schemes if creditor dies, unpaid debt is cancelled healthcare cooperatives Soweto Home-Based Care Givers,
South Africa Employment Direct Employment
Related Institutions
Self-Employed Members
Spillover Effect ILO numbers for 1997
(15 countries) category direct employment related institutions spillover effect n of jobs 158,640 5,937 ~500,000 not available ILO numbers for 2005 direct employment self-employment seasonal employment country Kenya Ethiopia Ghana Rwanda Uganda 77,400 28,000 3,130 800 2,823 -- -- 209,145 -- 21,000 (coffee) -- equivalent to 4,476 permanent empl. -- 150,000 [ 6,000 , 15,000 ] Poverty Reduction Operate in rural and urban areas where poverty prevails
Majority of membership relatively poor risk pooling
long-term safe financial relations help the poor to collectively empower themselves
break the exclusion from the rest of society. organized input supply
open up markets
marketing of outputs
reduce transaction costs
Outreach Bonds & Bridges Security Economies Rwandan rice growers Tripled the price in 5 years but still make $0.60/day Cooperation was born in Africa It was present long before the colonizers came Burial Societies are common in many countries since centuries ago Colonialism Independence Liberalization Recent Past Belgian Colonies Portuguese Colonies Not colonized British Colonies French Colonies Social Movement Tradition Producer's Tradition Indigenous Tradition Unified Model Tradition Social Economy Tradition Cash Crops Agriculture Rural Development Strong legal framework Pyramidal Structure apex
regional chapters
basecooperative units holistic approach Coops: a tool among many to satisfy the needs of the communities 1. Coops became very popular in the discourse of African leaders 2. great importance national development strategies and plans 3. Intense government involvement 4. social control: co-optation and patronage. Spectacular expansion Stagnation and Decline Too important to fail Intervention: artificially sustained Dependency on external funding: “share capital or membership fee payments were minimal or completely nonexistent” 5. Autonomous?
Voluntary? Shrinking of the state cooperative departments Legal framework radically modified autonomy end of privileges scarcity of credit funding crisis devaluation of currencies Fierce private competition loss of market share technical, managerial void harmful for all but some big agricultural exporter coops Weakening of the Unified Model Proliferation of the Social Economy Rise of the SACCOs among urban low-middle class Vibrant recovery Cooperatives survived liberalization
Benign unintended effect: purified and revamped sector
New coops are more independent: don't rely on the state as before
Big share of population: 7% Even bigger than some trade unions and religious groups Ethiopia
South Africa
11 African Countries Country Population(million) n of coops n of members 72.4
(52% of Africans) 4 500 000
2 400 000
3 370 000
4 300 000
75 000
323 000
30 136 000
Senegal 1 000
4 000
29 000
2 000 n of coops
1989-1992 2005 2 850
7 000
50 000
6 000 members (million)
1989-1992 2005 n.a.
n.a. 2.4
3.0 "Cooperating Out of Poverty". ILO, 2005 Activities Agricultural coops: still predominant Savings and Credit coops: fastest growing sector Housing, Consumption, Transportation, Arts & Crafts, Tourism, Education, Mining, Health... Women membership management leadership presence decreases as power increases every rule has its exception... South Africa two thirds in of the members of black-owned cooperatives are women black colored cooperatives as opposed to Afrikaneer cooperatives Agriculture SACCOs greater female prominence ...best loan repayment reputation only 25% of members are women In Kenya's Agricultural coops Land ownership patterns

Traditional rural division of labor women own
1% of land

women produce
80% of food Anyway, those who participate enjoy increased producticity
quality of life Cooperatives in Africa have a long history, with ups and downs, highs and lows, but they have managed to survive every adverse situation Cooperatives are now more vibrant than ever in their history. Africa is living a renaissance of the cooperative movement African cooperatives are a powerful economic and social force that must be taken into account in any attempt to understand African reality
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