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Why co-operative movement wants its own ministry

Tuesday July 21 2015

From left: CIC Insurance Group chairman Japheth

From left: CIC Insurance Group chairman Japheth Magomere, Coop Bank Chairman Stanley Muchiri and the Ministry of Industrialisation CS Adan Mohamed during the International Co-operative Day Celebrations in Nairobi last year. FILE/NATION 

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As the clamour for a Cabinet reshuffle grows, the co-operative movement in Kenya is pushing for a stand-alone ministry to oversee the segment.

The movement wants the Ministry of Industrialisation and Enterprise Development led by Adan Mohamed split into two.

At the moment, co-operative affairs are run by a directorate in the ministry but the stakeholders say their issues are pushed to the periphery with low budget allocation.

“We have petitioned the President to create a ministry of co-operatives through a 12-point memorandum. We have realised that some of the rules and regulations that have been passed by the county assemblies have the potential of killing the co-operative movement,” said Co-operative Alliance of Kenya CEO Daniel Marube.

“We have also developed a draft Bill that we intend to share with the Council of Governors to ensure we cushion the co-operatives from possible political interferences.”

Co-operative Bank Group Chairman Stanley Muchiri said with 17,000 societies and 45 per cent in savings, the co-operative movement impacts on the lives of about 75 per cent of Kenya’s population.


The movement is estimated to have Sh501 billion in savings and Sh694 billion in capital while employing about 500,000 and another one million indirectly.

“It has been voted as the fastest growing by World Council of Credit Unions (WCCU). It is in this view and many other achievements that we are asking for a fully-fledged ministry to co-ordinate operations of co-operatives movement,” said Mr Muchiri on July 4, during Ushirika Day celebrations.

“By not giving enough attention to this sector, the Jubilee government will only be ignoring three-quarters of the population.”

Industrialisation CS said devolution has placed the co-operatives under the counties leaving only policy and oversight at the national level. He added that low budget allocation at the national level was not meant to downgrade the sector.

“The co-operatives have expressed desire for state department with a principal secretary or a stand-alone ministry and that is the prerogative of the President,” Mr Mohamed said.


“The Constitution made co-operatives fully devolved and the functions that were under the ministry are now under the counties,” he said.

The co-operative movement in Kenya is the first in Africa and seventh in the world according to WOCCU on account of the funds it holds.

The sector mobilised Sh460 billion last year and is projected to hit Sh800 billion in the next eight years. When President Uhuru Kenyatta named 18 ministers in 2013, the co-operatives docket was missing, causing disquiet among the members of the giant business segment. The sector had been running under a full ministry for many years.

“The officials in the co-operative docket within the ministry of Industrialisation often find they have no enough resources to undertake activities,” said an official in the ministry, who requested not to be named to avoid antagonising his seniors.

“This has caused disquiet among the officials and yet the movement is getting more membership every day, requiring greater oversight.”

Mr Kenyatta placed co-operative docket in the ministry of Industrialisation with the highest officer serving the section being the commissioner of co-operatives.

Stakeholders are however dissatisfied with how the co-operative movement has lost visibility at the national level. Officials in the ministry attribute this to low funding.

“We recently held the International Co-operative Day and we will have Savings and Credit Co-operatives Association of Africa meeting in October. This is in no way downplaying the role of co-operatives, which has mobilised Sh500 billion in savings and its ability to take out millions of people out of poverty,” said Mr Mohamed.

“We consider it at the heart of the ministry but like many things in transition, this (lack of visibility) was bound to happen.” The clamour for a stand-alone ministry has been amplified mostly by the leaders from Central and upper Eastern where over 80 per cent of the co-operatives are based.
Socially sensitive

The co-operative model is different from the conventional profit-driven enterprises. This means it deserves to be managed in a way that preserves its inclusive and socially-sensitive business.

“Owing to this inclusivity, the co-operative model needs to be promoted for use as a community development strategy. Co-operative leaders should be overseen by a ministry to continue to undertake educational activities to demonstrate the effectiveness of the co-operative approach,” said Mr Henry Bwisa, a lecturer on entrepreneurship at Jomo Kenyatta University.