Introduction
Short summary of Cooperative policy and legislation in Tanzania
Cooperative policy and legislation in Tanzania
The cooperative movement performed poorly after reintroduction in 1982 and in the 1991 cooperative law, as it was too restrictive. The Government of Tanzania appointed a Presidential Committee in March 2000 to look into the contributory factors and advise the government on appropriate measures to be adopted. The Presidential Committee recommended the formulation of the Cooperative Development Policy and a new cooperative Act. The new act (Cooperative Societies Act, 2003) was passed in parliament and gazetted on 6th February 2004 and came into effect on 1st August 2004. In 2003 a Declaration Order was signed by the President of Tanzania, which transformed the Cooperative College Moshi into Moshi University College of Cooperatives and Business Studies (MUCCOBS). MUCCOBS operates as a campus of SUA until it attains full university status.
There are feelings among leaders of cooperative organizations that the current cooperative law (2003) has some flaws which are likely to impede cooperative development in the country. This was made abundantly clear by the Tanzanian delegation to a sub-regional seminar on Cooperative Policy and Legislation held in Manzini, Swaziland in 2008. It nevertheless appears that the Cooperative Department is not interested in revising the law soon.
Currently there is a move to decouple cooperative development from government ministries by creating a semi autonomous Cooperative Development Commission (CDA). A Presidential Order of 13th January 2009 sanctioned the formation of the Commission and the process of its establishment is underway. Discussions have reached cabinet level, but so far it appears that cooperative stakeholders have not been consulted sufficiently.
The cooperative movement has adopted various structures at different periods (two-tier, three-tier, four-tier). The Cooperative Societies Act, 2003 was passed bearing in mind that more levels or tiers might result in less scope for member control and increased costs for members. This Act is flexible and only primary cooperatives and the confederation are recognized as the basic structures of the movement. Members of cooperatives are free to decide whether or not to form middle level structures (i.e. secondary and tertiary cooperatives) depending on their needs.
The 2002 Cooperative Development Policy was formulated in line with the 1995 ICA Statement of Cooperative Identity and Principles. The 2003 Act that came out of the policy progress places great emphasis on the economic viability of cooperatives. As economic organizations, cooperatives have to prove their potential to operate as business entities that are capable of generating surplus for sustained growth.
Both the tenure of cooperative board members and corruption has been burning issues within the movement. The Cooperative Societies Act, 2003 has a provision limiting tenure to three terms of three years each. There are provisions in the code of conduct for cooperative management to require proof of credibility on cooperative leadership that has a tarnished image. The code of conduct focuses on the integrity of the cooperative leadership and the qualifications of executive staff. In the act there are also provisions for vetting of cooperative staff and declaration of personal property of cooperative board members and cooperative management staff. Executive staff of cooperatives will be vetted to check on their past history and qualifications, and will be employed on fixed term contracts. Leaders of cooperatives will go through training on business skills and good governance. Audits and inspections will be improved to curb embezzlement and thefts in cooperatives. Services of Special Prosecutors will be sought in speeding up investigations and cases involving cooperatives. The prosecutors will be appointed by the Director of Public Prosecution.
The Cooperative Development Policy of 2002 led to the 2003 Cooperative Societies Act. The Cooperative Rules of 2004, which are part of the Act, provide an elaborate list and definition of the various kinds of cooperatives which can be established. This has opened the door for formation of cooperatives in all sectors. However, there is a feeling in the movement and among cooperative experts that even with the new policy the government seeks to help cooperatives; it also seeks to control them. There is also a view from the SACCO movement that crop marketing cooperatives are more favoured. The current policy of a presidential fund loaning money for small entrepreneurs all over the country was cited as the only support for SACCOs. It was mentioned that the SACCOs movement was not involved in preparing the current Cooperative Societies Act. The case could be that the consultation was not broad enough to address all the main stakeholders. The problem of good management by qualified staff and training is not adequately addressed. Nevertheless, it was also mentioned that SCCULT and a few SACCOs participated in the formulation of the policy and law and that more members of the movement were involved in stakeholder meetings. It was also reported that the government supported the election of new leaders and the removal of dishonest and uncommitted ones. The government is currently supporting the training of SACCO managers at MUCCOBS, as well as recruitment of qualified managers in unions and SACCOs. The government owns the most advanced cooperative college in Sub Saharan Africa, but most of the training at higher levels is for non-movement personnel. The only training at MUCCoBS that directly and exclusively targets cooperative members and pre-members is the training provided under the ICCDE. The operations of cooperatives could improve if cooperatives could send more employees for training at MUCCOBS.
The department of cooperatives has limited staff (60) and it may be hard to implement the new cooperative policy. Cooperatives were involved in formulating the current government major long term development policy, the National Strategy for Growth and Reduction of Poverty (NSGRP), but no large scale case of poverty reduction through cooperatives are cited so far. Example of increased income for cooperative members is limited to a few areas, such as Rombo district.
The new government policy aims at developing sustainable financial mechanisms for cooperatives. The government has asserted that it will encourage and assist cooperatives in establishing sustainable long term mechanisms through the establishment of cooperative financial institutions, including SACCOs. The creation of strong financial institutions is expected to go hand in hand with increased cooperative membership as the new cooperative policy is implemented. Nevertheless, only two small cooperatives banks exist, including the Kagera Farmers Cooperative Bank and the Kilimanjaro Cooperative Bank. These banks cannot meet all the financial services that are demanded by the cooperatives in the two regions. The other expected institution, a National Cooperative Bank has not yet been created, but is mentioned in the new cooperative policy.
According to the office of the Director and Registrar of Cooperatives, the number of primary cooperatives in the country was 7,544 in 2007 and 7,868 in 2008. However, cooperatives have not been consulted in many policy domains, such as decent work, agricultural programmes, marketing and export, crop innovation, Agenda 21, NEPAD and land tenure policy issues. Nevertheless, cooperatives have been involved in the implementation of a programme known as Member Empowerment in Cooperatives (MEMCOOP). MEMCOOP was conceived and tested as a pilot project in Kilimanjaro and Arusha regions in 1996-2000. Today it involves MUCCOBS, the Department of Cooperatives, SCCULT, TFC and COASCO. This project aims at capacity building through education and action. Cooperative education aims at giving members the practical tools to evaluate the performance of their cooperatives and the cooperative effect. MEMCOOP supports capacity building activities, enabling cooperative members to assume responsibilities of running their cooperatives. From 2004 some cooperatives under the MEMCOOP project started making major decisions to carry out the business of their members (selling crops to the final buyer). Cooperatives in MEMCOOP were able to access TZS 1,286 per kilogram of coffee compared to TZS 600 per kilogram for cooperatives which had continued with the traditional market channels.
References
Mwaibasa, B. et al (2007) The Promotion of Domestic Agricultural Markets: Successful Cases,
Research Report Series Special Issue: BEEP Research Report, Vol. 3, Moshi, Moshi University College
of Cooperative Studies.
