New law seeks to kick out sacco officials

Nation Sacco Chief Executive Jacob Kimathi. FILE PHOTO | NMG

What you need to know:

  • The law dubbed Kiambu County Co-operative Societies Act, 2018, which came to effect on October 12, makes it illegal for sacco officials to serve for more than two consecutive terms.

A number of co-operative society officials in Kiambu County may be forced out of office following the enactment of a new law governing the management of saccos.

The new law makes it illegal for sacco officials to serve for more than two consecutive terms.

The law dubbed Kiambu County Co-operative Societies Act, 2018, which came to effect on October 12, has been challenged in court.

According to section 57 (4) of the new law which Kiambu Governor Ferdinand Waititu says is meant to streamline the co-operative movement, societies may be required to amend their bylaws to allow officials to run for more than two terms.

“The term of office of the members (of the committee) shall be as spelt out in the bylaws provided that a term shall not exceed three years and that a person (official) shall not serve for more than two consecutive terms,” reads the section.

Section 57 (5), of the Act directs all co-operative societies that have been in existence before the enactment of the Act, to “hold a special general meeting for the purpose of compliance with this section”.
This should be within a period of six months from the date of commencement of this Act.

Most groups operating in the county will have to hold a special session and change their management since many officials have been in office for more than two terms.

County Executive Committee Members for Trade and Co-operative, the Act says, will, among other things, oversee implementation of policies and strategies of co-operative societies while a directorate will be formed to oversee the implementation of the law.

Stakeholders say the county assembly failed to recognise that some co-operative societies have countrywide membership, and this might cause confusion in their regulation.

Players in the sector have argued the law infringes on other legislations such as the Co-operatives Societies Act (2004) and the Sacco Societies Act.

Currently, co-operative societies are controlled by members through AGM resolutions and elections, and a director can be elected for as many terms as the members wish, depending on the respective bylaws and the candidate’s competence.

Officials of Githunguri Dairy Farmers Co-operative Society, where some directors have served for 10-plus years accused the county government of plotting to take over the firm.

Co-operatives Commissioner Mary Mungai faulted the Act. Sweeping out an entire management in a sacco, as the county law suggests, is unhealthy.

To ensure continuity and prevent incompetent directors from overstaying in office, she said, they proposed that a third of the committee should retire on rotational basis. Co-operatives are private entities run by members, and the government’s role is to regulate its activities and protect members’ funds from loss, she said.

Nation Sacco Chief Executive Jacob Kimathi believes there is no justification for such law.

“Societies are under the regulator and are scrutinised every month. They have been professionalised and the boards are run through charters, which give them the mandate and responsibly, and are often evaluated [hence] nothing warrants such a suggestion,” Mr Kimathi said.