THE CO-OPERATIVE MOVEMENT IN KENYA:

THE EAGLE THAT WONT FLY

By Mwangi Ngumo

The Co-operative Movement in Kenya traces its roots to the period

immediately after the countrys independence when the World was
divided largely into two adversarial camps: a capitalist West led by the
United States of America and the United Kingdom, and a socialist East
under the patronage of the former Union of Soviet Socialist Republics and
the Peoples Republic of China. Both the people of Kenya and its leaders
were under intense pressure to join either of the two camps. Its neighbours
had already taken sides, with the Julius Nyerere-led Tanganyika opting to
face East while Milton Obotes Uganda soon followed suit with their
Common Mans Charter. Under the guidance of the Late Tom Mboya and
the current President, Hon. Mwai Kibaki, the Kenya Government opted for
what was essentially a middle of the ground position, a mixed system. In a
paper entitled the Sessional Paper Number 10 of 1965, the thinking of the
Kenya Government was summarized as African Socialism. With this
Paper, the parastatal sector was born and the Co-operative Movement
given new impetus.
The Movement did in fact grow and became a shining example of how
common people can come together, pool their financial resources and
assist each other with small loans that were, in time, to transform their
lives. To-date, the Co-operative Movement in Kenya commands a
substantial portion of this Nations wealth. The issue now is not whether or
not the Movement can be a success, which undoubtedly it has been, but
whether it can become an effective vehicle of winning economic
independence from the neo-colonialists who have largely kept the wealth
of this country in the same hands it was in prior to political independence.
The Movement, continues to miss opportunity after opportunity to do this,
and needs to re-focus and re-assess its capacity not just to mobilize
financial resources, but also to manage them well for faster economic
growth for the Nation and the welfare of its members.
The Movement will need, for instance, to review its legislative
arrangements. The Government, through its Ministry of Co-operative
Development, will need to quickly make up its mind whether its wants to
control the Movement or facilitate it. We have no doubt that each Cooperative society or Union needs to be left alone to manage its own affairs
as no amount of regulation from an external agency can guarantee that
its resources are used for optimum benefits for their owners. But one must
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also make sure that the capacity of the Society to manage its affairs
indeed exists. Although corrupt and unethical practices have always
bedeviled the Movement, the tendencies reached astronomical levels when
the role of the Co-operative Officer was down-graded drastically without
first ensuring that appropriate checks and balances existed within the
Societies and Unions. Soon, members of the Central Management
Committees (CMCs) were paying themselves huge sitting allowances, were
advancing themselves four or five loans concurrently without paying any,
and investing members contributions in worthless undertakings in every
town in the Country. The time taken between applying for a loan and
getting it was becoming longer - for lack of funds, yes, but mostly due to
favouritism and nepotism! The matter now requires the urgent attention
of the anti-graft authorities in Kenya - if they can liberate themselves from
the dungeons of the Goldenberg labyrinths and the Anglo-leasing
rigmaroles.
It may also be necessary for the Movement to question the rationale of
one-member-one-vote electoral practices instead of the one-share-onevoter arrangements that ensure that those who have more to lose have a
bigger say in any undertaking. But even if that were not to happen, some
minimum qualifications for election to be a member of a Central
Management Committee should be agreed on. Such requirements should
include, but cannot be confined to, the level of education. Members of
CMCs should also have experience in leadership and knowledge in
management and must not have been associated with corrupt practices.
Members must also be educated on the circumstances under which a
conflict of interest could be said to arise in business transactions.
The Movement will also need to ensure that there is sufficient de-linking of
ownership from control, and that the roles of the CMCs are separated
from those of Management. The large co-operative societies and unions
have hired permanent staff to manage their affairs. But they have
continued to interfere with the work of their staff, have insisted in having
relatives employed in the societies, and even to protect non-performing
employees depending on which camp the CMC member belongs to.
Today, it is almost impossible to get a job in any Co-operative Society
unless through the influence of a CMC member. In the highly-changing
and competitive world of banking, employees who are hired on the basis
of who and not what they know, and are utterly un-empowered to
perform the duties they were hired to perform, cannot provide the needed
edge.

Then, there is the whole issue of the business strategies that the societies
employ. Like a moth that continuously gets attracted to a fire, the cooperative Societies have placed themselves on a direct collision path with
mainstream banking, without blinking, and without the core
competencies that mainstream banking have developed over the years.
They have failed to capitalize on the advantages accruing from their core
strength the bond that comes from their common employment and
have chosen to perform tasks without the requisite legal, administrative,
technological and managerial tools needed to make a difference. They
have now been reduced to large scale customers of the main-stream
banks, instead of working their way towards becoming worthy and
parallel competitors in the banking industry by capitalizing on the benefits
that accrue from their proximity to their customers and being faster in
delivering services to them. In short, the Movement has become the eagle
that wont fly.
Perhaps the Movement will learn, and do so quickly before it becomes
another case when Kenyans have to reminisce of the good old cooperative society days. But the horror of the AIDS epidemic, which
remorselessly and unabashedly continues to ravage the membership of the
societies, hangs over their future like a Damocles Sword. The societys
membership is dwindling rapidly, and the Leadership of the Movement
must identify solutions to protect their financial base. This calls for a great
deal of thinking and planning which must not be clouded by selfish
considerations or the short-sightedness of the members of CMCs. The Cooperative Movement has been a boon for this Country. Many people in
this Country would not be where they are now were it not for the harvests
of opportunities sowed in the garden of the Movement. It will be a sad day
when Kenyans will compose a eulogy for the Movement and say, She was
such a Loving Mother. But God gives and God Takes. May she Rest in
Peace.
We cannot milk a cow, refuse to feed it, cry that it was a wonderful cow,
and blame God for it. The matter of whether or not the Co-operative
Movement can be re-organized and made beautiful again has nothing to
do with our prayers it is a matter for our hands, our minds, and our
commitment. For once, let us leave The Almighty out of it.

(Mr. Mwangi Ngumo is the Executive Director of the Kenya

Institute of Management and can be reached at
mngumo@kim.ac.ke)
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