In an exclusive interview with Co-op News magazine the Co-operative Commissioner talks about new development in the sector, the impact of the National Co-operative Policy, and government sustained efforts to promote growth in Africa’s biggest co-operative movement.
The National Co-operative Policy is now Sessional Paper No. 4 of 2020 after the National Assembly approved it paving way for the implementation in September 2021.
A task force appointed by the Cabinet Secretary for Agriculture, Livestock, Fisheries, and Cooperatives Peter Munya has finalized developing policies that will guide in the implementation process of the Co-operative policy. The task force team is headed by CIC Group Chairman Dr Nelson Kuria and has two representatives from the Council of Governors.
The policy is expected to overhaul the co-operative sector management by strengthening leadership and governance, aiming to promote growth and resilience of the sector.
In an interview with Co-op News in his office, the Cooperative Commission David Obonyo disclosed a draft Bill for the amendment of the Sacco Societies Act to allow seamless implementation of the policy is in the final stage.
“Once the Bill is approved by the Parliament it will be forwarded to the Cabinet Secretary before public participation is conducted next month (November),” said Mr Obonyo.
The Co-operative Policy spells out distinctive roles that the National and County governments will play in the management and regulation of co-operative societies as well as promoting growth in the movement ranked top in the African continent.
“The Intergovernmental Relations Technical Committee (IGRTC) in May this year through Gazette notice No. 85 delineated the mandate of the two levels of governments. This has ironed out some issues in co-operatives management that existed before,” said Mr Obonyo.
The national government work will entail policy and legal formulation, setting standards, technical support, registration of co-operative societies, and conducting investigations and inquires when needed.
On the other hand, county governments will be involved in running the day-to-day administration and supervision of co-operative societies besides conducting training programmes.
The Sacco Societies Regulatory Authority (SASRA) will license and supervise Deposit-Taking Saccos and Non-Withdrawable Deposit-taking Saccos.
In another paradigm shift in the sector, the policy introduces a four-tier co-operative system, according to Mr Obonyo. “These will include primary co-operatives, unions, federations (national co-operative organizations) and Co-operative Alliance of Kenya CAK) as the apex body,” he explained.
The Commissioner noted that this would enable self-regulation and standardization of operations in the movement. He said CAK would be restructured to meet the aspirations of the policy. Its membership will be restricted to the Co-operative Federations, but secondary co-operatives that are not sector-specific and cannot affiliate to any federation can join CAK.
CAK roles will, among others, include advocacy, spokesman of the movement, and promotion of the movement’s interests; promote cooperation, collaboration, and linkages among co-operative and stakeholders through networks at local, regional, and international levels; and promote the development of the co-operative movement and advise the government at national and county levels on co-operative matters.
Anchored on the theme Promoting Co-operatives Socio-Economic Transformation, the national Co-operative Policy places co-operatives at the centre of national development goals.
It introduces a new structure that promotes integration and enhances self-regulation, increasing the visibility of the movement within the region and internationally by strengthening the Federations and the Apex organization.
Mr Obonyo said the National Government should ensure that only economically viable co-operatives are registered and ensure they become vibrant social and commercial entities.
“The Policy encourages shared services within the sector, which will reduce the number of dormant co-operative societies,” he added.
The co-operative movement is expected to act as a strong vehicle for implementing Kenya Vision 2030 on industrialization, particularly value addition in the agricultural sector.
Government reforms in the Co-op Sector
Coffee factories digitization
The national government has implemented two programmes in the Coffee sector that have resulted in increased earnings for farmers.
Mr Obonyo said that establishment of Cherry Fund
which is managed by the New Kenya Planters Co-operative Union (New KPCU), ensures that farmers are able to access affordable credit to buy input or revitalize their coffee farming.
The Ksh 3 billion fund uptake remains low, and Mr Obonyo said they are working extra hard to sensitize farmers in collaboration with New KPCU and other stakeholders.
“We have also digitized all coffee factories having established a digital platform – Coffee MIS. All coffee co-operative members are registered and coffee delivery is updated real-time. This has cleared the problem of “Ghost Kilos,” which was a major challenge before when farmers’ payment was greatly reduced by corrupt individuals,” said the Commissioner.
Coffee MIS also links societies with various stakeholders such as banks.
So far, 25 coffee societies have been fully digitized, with 100 more in the process of digitizing their operations.
“The government has refurbished coffee factories by giving them metallic coffee dry tables. 25 factories have received 10 each and this financial year we plan to give five drying tables to 100 factories each,” said Mr Obonyo.
Revival of Cotton Ginneries
The dormant cotton ginneries are roaring again thanks to government efforts to revive the sector.
“Most cotton co-operatives have remained dormant due to outdated technology. The government is modernizing cotton ginneries in the country, which will play a significant role in the manufacturing sector,” said Mr Obonyo.
One such co-operative is the Luanda Cotton Union which has received six modern ginnery lines and digitized its operating and management system. Homa Bay ginnery is also lined up for rivals to benefit the local cotton farmers.
50 giant Saccos
The State Department for Co-operative Development is working with 50 giant Savings and Credit Co-operative Societies in the initial stage to introduce shared services in the sub-sector that will enable them to create own-lending and cheque clearance facilities like in the banking sector.
Mr Obonyo said the Saccos are currently working on their by-laws to accommodate the change. He noted that the Central Liquidity Fund (CLF), which President Uhuru Kenyatta initiated, is part of ensuring the dream of having a shared platform for Saccos comes true. The Co-operative Societies Act will be amended to pave the way for the legal establishment of CLF and shared services within the Sacco sub-sector.
Meanwhile, the transformation of transport Saccos to travel co-operatives solely mandated to manage fleets and offer minor financial support is underway.
“We have been busy with Co-operative Policy but our next focus is to work with National Transport and Safety Authority and Saccos for smooth transition,” said Mr Obonyo.
