Introduction
There is an elaborate structure of institutions which support cooperatives in Tanzania. These include two particular types: cooperative and government institutions. This section discusses the predominate cooperative institutions that support cooperatives, including the Tanzania Federation of Cooperatives, The Savings and Credit Cooperative Union League of Tanzania Limited (SCCULT) and the Tanzania Tobacco Cooperative Apex Ltd (TTCA).
The current organizational set up of the cooperative movement in Tanzania mainland is a four-tier structure which is prescribed by the law (The Cooperative Societies Act, 2003). This is a flexible four-tier structure and the compulsory structures in the law include primary cooperatives and a confederation. Members of cooperatives are free to form middle level, intermediary cooperatives, secondary cooperatives (cooperative unions) and tertiary cooperatives.
Cooperatives have a long history in the country, as indicated in section one, having existed for eighty years. It is safe to say that every adult Tanzanian knows what a cooperative is. Cooperatives are recognized under the law (Act No. 20 of 2003). However, their decline between the 1970s and 1990s has resulted in many people, especially peasants who had depended on cooperatives, to doubt the motives and relevance of these institutions.
When the government recognized the problem it set up a Presidential Special Committee on the Revival, Strengthening and Development of Cooperatives in Tanzania in 2002. The outcome of this effort was the formulation of the new Cooperative Development Policy of 2002 and the Cooperative Societies Act of 2003 (Act No. 20 of 2003) and cooperative support institutions now work under this framework. This Act is more flexible than its predecessor - the 1991 Cooperative Societies Act- and allows cooperatives to make by-laws that enable them function more efficiently.
Tanzania Federation of Cooperatives
At the top of the cooperative structure is the Tanzania Federation of Cooperatives (TFC). This is a confederation that represents, promotes, serves and coordinates the development of all cooperatives in Tanzania mainland. TFC was registered on 8th December 1994 (registration No. 5503) under the 1991 Cooperatives Societies Act. It is an independent non-political, non-governmental and non-partisan organization that observes international cooperative principles and is a member of the International Cooperative Alliance. Currently TFC has 14 members (thirteen cooperative unions and one federation organization). When it was registered on the 8th December in 1994 (Registration Number 5503) TFC started with only five founding members.
In all the cooperative institutions (primary, union, federation and confederation) the highest authority is the annual general meeting (AGM). This meeting discusses all the major decisions of the cooperative. In the case of TFC, like other cooperatives, the board of directors exercises the power of supervising day to day activities on behalf of the AGM, except those reserved for the AGM. The executive secretary heads the functional structure and is assisted by two directors and five functional department heads (accounts, personnel, estates, education and planning).
The first cooperative law enacted in 1932 did not provide for a national cooperative confederation. A specific law to set up this structure was passed in 1961 and since then the role of the confederation has been recognized. The current confederation (TFC) was formed in 1994 after the passing of the 1991 Cooperative Societies Act. However, there has been organizational continuity for the organization since the Cooperative Union of Tanganyika (CUT) was formed in 1961. The original CUT was replaced by the Union of Cooperatives, then the Cooperative Union of Tanzania when the organization covered Tanganyika and Zanzibar. The current TFC is a transformation of the former Cooperative Union of Tanzania with a new registration and name.
As an organization, TFC is stable and has considerable estate property. For a long time the eleven storey building which TFC owns in Dar es Salaam was the highest building in the city.
The number of permanent staff employed by TFC is indicated in the table below. In term of profession, the staff members include managers (4), accountants (3), auditors (1), cooperative expert (1), secretaries (2), legal officer (1), office supervisor (1), clerks (2), lift operators (2), estates (4), marketing (1), promoter (1), publicity (1). Two of the four managers have received cooperative management training. TFC members make annual subscription fees to the organization. The figure below shows parmanent staff of TFC
| Year | No. of permanent staff |
| | |
| 2004 | 55 |
| 2007 | 30 |
| 2008 | 24 |
| | |
Source: TFC
TFC is empowered by law to make by-laws and the latest by-laws were passed in 1997. However, the by-laws are not effective and it appears that they are not used. Disputes and problems are solved through discussions and meetings. Disputes between TFC and SCCULT and between TFC and the Cooperative Union of Zanzibar were solved this way.
TFC’s most stable source of income comes from its properties - especially the buildings. Its accounts are audited by internal and external auditors (the Cooperative Audit and Supervision Corporation). The last time the accounts were externally audited was 2008 and the auditors’ report was presented to the TFC board.
The TFC is considered to be the main voice of the cooperative movement by the government, members and international organizations, such as the International Cooperative Alliance (ICA). The TFC, along with other cooperative stakeholders was instrumental in advocating and organizing for the Cooperative Reform and Modernization Programme (CRMP). CRMP is the framework for policy and legal implementation for implementing the 2003 Cooperative Development Policy. TFC continually makes assessments of cooperative policy and legislation. It produces simple versions (layperson’s guides) of key documents, such as the Cooperative Development Policy and the Cooperative Societies Act for rank and file cooperative members.
The TFC has created a website (www.ushirika.coop) and it collects and disseminates market information for the member cooperatives. At the request of cooperatives, TFC can help to find buyers for their products. TFC also helps with business development of cooperatives, for example, it provided assistance for vanilla production and soybean marketing for cooperatives in Songea region. As part of its marketing strategy TFC produces and broadcasts a weekly 15 minute radio programme to promote cooperation and cooperative information that is targeted to members and the general public. However, the marketing services extended by TFC to cooperatives are still limited. Complaints of lack of markets and low price for cooperatives - especially by crop marketing cooperatives - are very common in the local media.
TFC also organizes trade and promotional shows for cooperatives. For example, TFC organizes trade fairs for cooperatives on the Peasants’ Day, which is celebrated on the 8th of August of each year, and also on the International Day of Cooperatives, which is observed on the first Saturday of July every year.
Face to face consultation with members of the movement that are in need is lacking. There seems to be a failure on behalf of the confederation to respond to the needs of the unions and the federations that deal directly with cooperative members. TFC is nevertheless working hard through cooperative education to disseminate information to make members in remote areas and potential members aware of the cooperative movement and to improve the support and services that it provides to its own members. However, the task is not easy because the confederation has a staff of only twenty four people and there are over 8,500 registered cooperatives in the country.The Savings and Credit Cooperative Union League of Tanzania Limited
SACCOs are the most prominent and visible cooperative organizations in Tanzania. The SACCO movement has opted for both two-tier and three-tier structures to support its activities. The Savings and Credit Cooperative Union League of Tanzania Limited (SCCULT) is the national association for registered SACCOs. SCCULT is a cooperative union and some SACCOs are not its members, but are members of TFC. The organizational structure of SCCULT consists of the Annual General Meeting (AGM), which is composed of delegates drawn from the primary cooperatives. As is shown below, the AGM includes a management board whose members may range from a minimum of five to a maximum of nine, including the chairman and vice chairman. Members of the management board are elected at the AGM. According to SCCULT, there were 4,524 SACCOs in 2007 with 758,829 members, but only 1,205 SACCOs are affiliated to SCCULT. The organizational structure of SCCULT is typical of the other unions, although the latter use the title of general manager for their chief executive officer and not executive secretary, as is the case with SCCULT. The strongest organization for cooperatives in Tanzania is SCCULT. This union has numerous members (1,205) and is organizationally and financially more stable than the other non-primary cooperative organization. SCCULT was registered in 1992 under the 1991 Cooperative Societies Act. Its certificate of registration is number 5480 (issued on 19th October 1992). This national association or union for all registered SACCOs is also registered with the Tanzania Revenue Authority as a tax payer with Tax Identification Number (TIN) 103-127-661.
SCCULT employed 41 people in 2008 (33 men and eight women). This is a drop from 48 employees in 2006. To strengthen its organizational structure and to ensure representation for all members in the AGM, SCCULT has opened regional offices in all the 21 regions of Tanzania mainland. SCCULT is affiliated to TFC and is in the process of becoming a member of the World Council of Credit Unions.
SCCULT provides the following services to SACCOs.
• Central Finance Programme (CFP);
• Lobbying and Advocacy;
• Representation;
• Capacity Building and Development;
• Agency (in Education and Training);
• Sales of Stationery and Equipment (i.e. buys in bulk to reduce prices);
• Accounting Pool Services;
• Research, Consultancy and Business Development;
SCCULT introduced an inter-lending programme for SACCOs known as Central Finance Programme (CFP) in 1998. By December 2006 many SACCOs (560) had joined the programme as members and had accumulated a total saving of over TZS 2.7 billion. The amount loaned out to SACCOs up to 31st December 2007 was TZS 4.2 billion. This programme has benefited SACCOs because the fund created by SCCULT lends SACCOs development loans at competitive rates. The SACCOs offer members education, loans, quick loans, booster loans, festival loans, agricultural inputs loans, front office loans, and loans for purchasing equipment, such as computers and photocopying machines.
SCCULT has mobilized saving for housing loans (the SCCULT Housing Fund) where members of SACCOs have to raise 20 per cent of the purchase or construction cost to qualify for a housing loan. Repayment period ranges between three and ten years. The interest on savings stands at two per cent and interest on loans at 15 per cent per annum. A single SCCULT Housing Fund grants loan ranges between TZS 20 million and TZS 30 million.
In January 2004 SCCULT introduced Risk Management to SACCO members. The programme has been joined by 154 SACCOs and they are guaranteed reasonable rates of premium, special prompt settlement of claims and payment of rebate, writing off of outstanding loans and payment of funeral expenses. The limits of shares, loans and funeral cover have been raised to meet the need of individual SACCOs.
SCCULT is involved in the organization of local and international educational tours and visits for SACCOs. It also organizes in-house programmes. Through its short-term education and training programmes, it has popularized the idea of SACCOs all over the country. SCCULT has organized many promotion courses for SACCO members (members’ education) and national and regional seminars for delegates, committee members and SACCO staff. These courses have helped to spread the visibility and network of savings and credit cooperatives. They now dominate in the country and their sign posts can be viewed in work places in towns and villages. SACCOs have the largest number of cooperative members (764,602 in December 2007). Although not all of them are members of SCCULT, its strength can be gauged by the fact that SACCOs are the most visible and rapidly developing cooperatives.
Indicator | December 2007 | June 2008 |
Number of SACCOS | 4,428 | 4,445 |
Members | 764,602 | 765,931 |
Shares (TZS) | 22,331,918,765 | 21,766,545,131 |
Savings (TZS) | 73,760,474,837 | 74,609,319,888 |
Deposits (TZS) | 26,537,874,906 | 16,960,121,642 |
Loans issued (TZS) | 185,587,647,366 | 186,582,194,810 |
Outstanding Loans (TZS) | 79,852,376,245 | 80,202,150,450 |
Source: SCCULT. Tobacco cooperatives |
Tobacco marketing cooperatives are the only cooperatives that have opted for a four-tier structure. The Tanzania Tobacco Cooperative Apex Ltd (TTCA) is a national tobacco farmers’ cooperative organization that was established and registered in June 1994 under the Cooperative Societies Act no.15 of 1991 with registration No 5497. The founder members of the TTCA were Songea Agricultural Marketing Cooperative Union Ltd (SAMCU) of Songea district in Ruvuma region and Western Zone Tobacco Growers Cooperative Union 1994 Ltd (WETCU) of Tabora and Kigoma regions. The following cooperative unions have since then joined the federation, bringing the total membership to six.
- Kahama Cooperative Union Ltd (KACU 1995) of Kahama and Bukombe districts in Shinyanga Region.
- Central Zone Tobacco Growers Cooperative Union 1995 Ltd (CETCU) of Manyoni district in Singida Region.
- Lake Tanganyika Tobacco and Coffee Cooperative Union 1995Ltd (LATCU) of Mpanda district in Rukwa Region.
- Chunya Tobacco Growers Cooperative Union 2001 Ltd (CHUTCU) of Chunya district in Mbeya Region.
TTCA’s vision is:
building a stronger cooperative apex that will ensure an effective and sustainable cooperative movement capable of fulfilling members’ socio-economic needs.
Its mission is:
ensure that all tobacco farmers are cooperative members who are producing good tobacco in both quality and quantity so as to meet the challenges of competitive free market economy in this corporate world.
The goal is to produce quality tobacco that will contribute to poverty alleviation efforts amongst member farmers and improve their livelihoods and the national economy at large. TTCA performs the following functions:
- To explore domestic and foreign market trends so as to establish basis for tobacco price negotiations between the producers and buyers.
- To search and disseminate information on inputs prices and availability to members.
- To represent member farmers in local and international conferences / fora on issues pertaining to the tobacco industry.
- To provide technical advice on production and marketing aspects.
- To encourage and promote cooperative education and identity training needs.
- To represent members (farmers) in price negotiations meetings.
- To facilitate operations of member cooperative unions.
- To sensitize and ensure production of quality tobacco by raising members’ awareness on the use of improved technologies.
- To collaborate with tobacco classifiers and other tobacco experts to supervise tobacco grading and baling in order to ensure that tobacco is not mixed with any other foreign matter.
- To represent member farmers in tobacco markets by appointing competent representative.
- To verify inputs debts owed by farmers to tobacco contracting companies before the start of marketing season.
