CO-OP REFORMS
The impending enactment of the Co-operatives Bill 2024 marks a new era for co-operatives in Kenya. This progressive legislation is expected to be signed into law in time for the Ushirika Day celebrations, to be graced by President Dr William Ruto.
“After 15 years of development, the Bill has finally been approved by the Cabinet and is now awaiting parliamentary deliberation. The Bill marks a significant milestone in our legislative effort,” said the Cabinet Secretary for Co-operatives and MSMEs, Simon Chelugui, during his address at this year’s Annual Sacco CEOs workshop in Mombasa.
The Cabinet approved the bill last year, and it is now before Parliament for discussion and debate. The bill reached the floor of the House after it overcame the last hurdle, thanks to an amicable agreement between the Co-operatives Ministry and the Council of Governors on some of the contentious emerging issues.
One of the key aspects of the Bill is the establishment of a comprehensive regulatory framework for co-operatives, involving both national and county governments. A new framework for regulating co-operatives has been established, involving both levels of government, promoting self-regulation within the co-operative movement, and enhancing governance tools.
CS Chelugui mentioned that the Council of Governors has raised the issue of co-operative registration, which they want to be done at the county level as a source of revenue. According to the agreement reached with the national government, the Commissioner for Co-operative Development will issue the registration certificate at the county level, while the national government will maintain a national registry.
The Council of Governors had also raised the issue of inspection. In the meeting with the CS, it was agreed that counties do inspections while inquiries will be done by the national government.
The other matter concerned the remittance of Sacco dues, with the Bill proposing the creation of an agency that will deal with errant employers who delay in making remittances to Sacco. Many government–based Saccos depend on government ministries and parastals to remit Sacco dues. The new law will now force employers to remit deductions to the Sacco.
The Bill has also delineated the roles of county and national government and created a four-tier level of primary, secondary, and tertiary co-operatives and apex bodies. These levels are important for governance purposes.
The Bill has also laid supervision on the borrowing power of Saccos, a provision that will now be overseen to prevent its abuse. The Bill proposes stiff sanctions against any official who abuses the trust given to them by members.
“It is our hope that the Co-operatives Bill will be signed into law before the July 6th Ushirika Day celebrations,” said Chelugui.
Institutional Reforms
CS Chelugui highlighted ongoing institutional reforms in the co-operative sector and value chains, particularly in the coffee, tea, and dairy sectors. These reforms are geared towards enhancing transparency and efficiency, as evidenced by initiatives like the direct settlement system in the coffee sector and the separation of licensing rules to prevent monopolistic practices at the Nairobi Coffee Exchange(NCE).
“15 co-operative societies have been granted licenses to take part in trading at the NCE. This means that coffee farmers will have the opportunity to directly participate in the NCE for the very first time. This newfound power allows farmers to make decisions about accepting or canceling a sale, giving them a level of control they have never experienced before,” stated CS Chelugui.
The Sacco Societies Bill of 2023 has been amended and approved by the cabinet to strengthen SASRA operations by addressing legal and policy gaps. It is now before parliament for consideration.
Other important legislative agendas regarding the SACCO subsector, which have been approved by the cabinet and are pending before parliament, include the draft Bill on operationalizing the Deposit Guarantee Fund (DGF) for SACCOs and the draft Bill on establishing a framework for SACCO shared services.
The DGF is essential for ensuring stability in the Sacco sector, as it ensures members are compensated in the unlikely event of a regulated Sacco Society’s failure. On the other hand, the shared services address the triple dilemma arising from competition, efficiency, and compliance.
