The co-operative business model’s unique nature in aggregating human and capital resources informed the Kenya Kwanza economic plan – the Bottom-up Economic Transformation Agenda (BETA) – that focuses on uplifting the livelihoods of Kenyans at the bottom of the economic pyramid.
In a speech read on his behalf by the Prime Cabinet Secretary Musalia Mudavadi during the launching of Tower Sacco Plaza in Ol Kalou recently, President William Ruto said the Ministry of Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Development is centrally placed in the implementation of bottom-up economic transformation agenda, which is geared towards ensuring that Kenyans own their economy through self-empowerment, improved incomes, employment and wealth creation.
President Ruto noted that Savings and Credit Co-operatives- Saccos – have witnessed rapid growth in the last few decades, with a savings mobilization of over Ksh1 trillion, equivalent to 30% of the country’s national savings.
“This is why Saccos will play a key role in our financial inclusion agenda by being among key intermediaries in the disbursement of the second and third products of the Hustler Fund. We expect Saccos will help the fund improve liquidity, increase diversity in membership base, enhance savings culture and sustainability through the digitalization of products,” he said.
Dr. Ruto said the government had taken steps to anchor co-operatives as a key pillar in the economic transformation. These measures, he said, include the implementation of Seasonal Paper No. 4 of 2020 on the National Co-operative Policy, whose theme is promoting co-operatives for social and economic transformation.
He noted the Seasonal Paper provides guiding policy in legal, institutional, and capacity building of co-operatives in the devolved system of governance. A draft Co-operative Bill has been developed to guide the implementation that is now in the process of being introduced in Parliament.
“We are also in the process of amending the Sacco Societies Act to establish a Central Liquidity Facility and a shared services platform. This facility will improve co-operative services to members and caution them against financial distress. It will also boost liquidity in the Sacco subsector by providing for short-term inter-Sacco borrowing and access to the National Payment System,” the President said.
Other co-operative reforms being undertaken include revitalizing key production value chains in agriculture to improve farmers’ livelihoods. The value chains targeted are dairy, pyrethrum, and horticulture, including potatoes, cabbages and leather products, textiles, tea, edible oils, fishing, maize, and other cereals.
Ksh6.8 billion to revamp dairy sub-sector
President Ruto said the government had provided a medium-term budget allocation of Ksh3.8 billion to complete the ongoing modernization of the New KCC plant and equipment in Runyejes, Narok, Kiretine, Kabianga, Kitale, Eldoret, and Dandora.
He added that an additional Ksh3 billion had been set aside for mopping up excess milk in the marketing during glut season, promotion of dairy products, and export strategy in the expansive 476 million East African communities market.
“To actualize this, we have allocated NKCC Ksh700million under the supplementary budget to boost the modernization,” he said.
On horticulture, the President said the recently launched Ol Kalou potatoes processing plant would be expanded, increasing its capacity from the current 500 metric tonnes to 1000 metric tonnes to serve more farmers in Oljororok and Ndaragwa areas.
He further directed that another potato cooling plant be established to serve farmers in Kinangop, Kipipiri, and surrounding areas in anticipation of a bumper harvest.
“This should be replicated in other fresh produce growing counties of Uasin Gishu, Baringo, Nakuru, Elegeyo Marakwet, Kisii and Kericho. The ministries of Trade and Co-operatives and MSMEs should also collaborate with Tharaka Nithi county in rehabilitation and expanding the Tharaka Nithi market,” Dr. Ruto said.
The President said co-operatives play a significant role as enablers of the targeted value chains in the aggregation of both members and produce, distribution of subsidized farm inputs, value addition, warehousing, and market access.
“My administration is also exploring ways to maximize leveraging on existing co-operative structures in rolling out affordable housing, universal health care and pension schemes to Kenyans at the bottom of economic of pyramid,” he said.
“Decent housing is a constitutional right which my administration is committed to actualizing and co-operatives are the goose that should lay the golden eggs in the affordable housing program.”
Co-operatives are expected to mobilize finance for housing development and facilitate access to mortgage products through the Kenya Mortgage Refinance Company.
“We encourage MSMEs to transit into co-operatives to provide skills and building material which will complement government programs to provide common basic infrastructure to co-operatives and other real estate developers,” he said.
He urged co-operatives to reinvent and focus on the overall production ecosystem of value chains available at the ward level. He called on the co-operative leaders to continue providing leadership and stewardship to foster business prosperity.
“You must embrace the tenets of good governance and adoption of the best practices in the management of co-operative affairs. You should be guided by prudent business and commercial practices that will always reflect members’ aspirations of growth and better livelihoods,” said President Ruto.
