A sharp ideological divide has emerged between the government and the cooperative movement’s leadership over proposed mandatory term limits, threatening to complicate the final push for the long-awaited Co-operative Bill.
The divergence in opinion took center stage at the 4th Cooperative Leaders Consultative Forum, organized by the Cooperative Alliance of Kenya (CAK). While government officials championed term limits as a necessary pill for accountability, sector leaders warned that legislative interference could destabilize some of the country’s most successful financial institutions.
Cabinet Secretary for Cooperatives and MSMEs Development, Hon. Wycliffe Oparanya, declared the government’s intent to finalize the Co-operative Bill by March 2026. The Bill, currently having passed through the National Assembly and the Senate, is framed as a comprehensive solution to the sector’s “governance weaknesses, mismanagement, and poor oversight.”
“While the bill may not solve all sector challenges, it will provide effective solutions to the majority of them,” Oparanya stated.
The CS defended the government’s aggressive stance, including the recent suspension of new Sacco registrations. He argued that the proliferation of unviable Saccos—often created as vehicles for political expediency during election cycles—undermines the sector’s credibility. Oparanya instead encouraged mergers, pushing for fewer, stronger, and more sustainable entities.
Reinforcing the state’s position, Principal Secretary for Cooperatives Development, Patrick Kilemi, argued that the introduction of term limits within the Bill will foster “fresh leadership.”
“Term limits have been incorporated to promote accountability and better governance,” Kilemi said.
He also called for the Co-operative Alliance of Kenya (CAK) independence through self-sufficiency, regular subscription payments from co-operatives.
However, the government’s prescription met stiff resistance from industry veterans. Macloud Malonza, Chairman, CAK, issued a strong rebuttal regarding the imposition of term limits via national law.
While acknowledging that governance gaps remain the biggest threat to cooperative stability, Malonza argued that the power to determine leadership tenure should remain with the members, not the state. He proposed that term limits be enshrined in individual cooperatives’ bylaws rather than the national law.
“Co-operatives are democratic institutions where members have the constitutional right to elect leaders of their choice,” Malonza argued. “Imposing a uniform term limit from the national level may interfere with members’ freedom to choose and disrupt continuity in institutions that are performing well.”
Malonza pointed to data regarding the sector’s top performers to bolster his case. He noted that the top 10 Saccos in Kenya—institutions characterized by stability and growth—have thrived under consistent leadership without state-imposed term limits.
“Their stability and success were built on strong member confidence, experienced leadership, and continuity in management,” Malonza noted. “If members want change, they will vote for it. If they want continuity, the system should allow it.”
Modernization and Taxation
Beyond the tussle over leadership, the forum highlighted the urgent need for modernization. The new law places a heavy premium on technology adoption, with CS Oparanya championing systems like ‘CoopTech’ to streamline operations.
However, this digital shift brought cybersecurity to the fore as an urgent frontier. With digital fraud attempts rising globally, leaders warned that the migration to mobile platforms and cloud-based systems requires a matching commitment to defense. Discussions underscored the need for sector-wide protocols to mitigate hacks, encrypt sensitive member data, and establish emergency response systems for digital breaches—cementing the view that digital safety is now as critical as financial prudence.
Daniel Marube, CAK CEO, lauded the government’s commitment to transforming the space, acknowledging that the sector has long battled policy gaps and slow reforms.
On the fiscal front, tax expert John Chweya warned leaders about the shifting taxation landscape. Highlighting common compliance gaps, Chweya advocated for specific tax policies that recognize the unique structure of cooperatives.
“These are entities built on mutual benefit rather than profit maximization,” Chweya observed, calling for a tax regime that reflects that distinction.
As the March 2026 deadline for the Co-operative Bill approaches, the friction between the Ministry’s desire for a regulatory cleanup and the cooperative leaders’ plea for democratic autonomy is likely to intensify.
For now, the message from the sector leadership is clear: future-proofing cooperatives requires strong governance, but it must not come at the cost of the democratic principles upon which the movement was founded.
“Imposing a uniform term limit from the national level may interfere with members’ freedom to choose and disrupt continuity in institutions that are performing well. If members want change, they will vote for it. If they want continuity, the system should allow it.”
~ CAK Chairman, Mr Macloud Malonza.
