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The Kenya Co-operative Movement:
The first Co-operative Society in Kenya was formed in the Great Rift Valley at Kipkelion in 1908 by white settlers to market their dairy products. At that time, there was no specific Co-operative legislation, and Lumbwa Co-operative Society was registered under the Business Practices Ordinance as legislated in Great Britain, adopted in India and practiced in Kenya. The Co-operative Society was also to address the farming needs, livestock requirements and marketing channels for the products from the area under its operation. Later in 1950’s African smallholder farmers were allowed to promote and register Co-operatives for cash crops like coffee and pyrethrum.

In 1963 there were 1,030 Co-operative Societies with 655 being active with a total membership of 355,000. In the same year the Government embarked on a policy of Africanization of the economy whose major policy statement was contained in the Sessional paper No. 10 of 1965 on “African Socialism and its Application to Planning in Kenya”. The Sessional Paper recognized Co-operatives as having suitable institutional framework upon which Kenyans could use to participate in socio-economic development. Consequently, the Co-operative Societies Act, CAP 490 of 1966 was enacted to guide the development of the Co-operative Sector in the new independent country. Subsequently the Government and Development Partners support saw the rapid expansion and growth of the Co-operative Movement after independence. At the onset of Economic Liberalization and Structural Adjustment Programmes of the 1990’s, it was found necessary to amend the Co-operative Societies Act, CAP 490 of 1966 to align it with the changes thus the enactment of Co-operative Societies Act, No. 12 of 1997. The Amended Act was further reviewed and a Co-operative Societies Act, CAP 490 of 2004 was legislated to address the economic liberalization challenges to avert the collapse of many marketing Co-operative societies that were unprepared for the new global market realities. The legislation also put in place mechanisms for good corporate governance and an enabling environment for furthering the growth and development of the sector. In Kenya today, there are over 13,000 registered Co-operatives with a membership of over 9 million people. The mobilized savings is Kshs. 230 billion or 33% of the National Savings. Over 500,000 people are employed in the sector. The Co-operative movement is rated as first in Africa and 7th in the world. The Kenyan SACCO sub-sector was internationally recognized and admitted to the Group 10 of the most developed movements globally. Co-operatives in Kenya have continued to provide the institutional infrastructure upon which both the underprivileged and middle class have organized themselves socially, culturally and economically. The various types of Co-operatives found in Kenya include; financial, housing, consumer, cereals, Eco-tourism, poultry, transport, coffee, dairy, cotton, pyrethrum, livestock, handicraft, sorghum, horticulture, sugarcane, labor, weaving, shared services, mining, land buying, fisheries, cashew nuts, coconut, hides and skins, youth, women among others. The Co-operative sector continues to be used as a vehicle to drive the economy towards the achievement of the Millennium Development Goals, Kenya Vision 2030 and other National Development Policies and Strategies.

Contribution of Co-operatives to Regional and National Socio-Economic Development: Contribution of Co-operative sector to the development of Co-operatives in the region: The Kenya Co-operative Sector has contributed immensely to the development of Co-operatives in the region through technical assistance. It has assisted in the revival of Co-operatives in Rwanda and is doing the same in South Sudan through training and advisory services from officers drawn from both the Government and the Co-operative Movement. There are other requests for support in the revitalization of the Co-operative movements of South Africa and Malawi. Djibouti is also seeking for assistance from the Ministry of Co-operative Development and Marketing on similar lines. It is therefore evident that Kenya’s Co-operative Movement has grown to the level of providing technical expertise to other countries in Africa. 1.3.2 Contribution of the Co-operative sector to Kenya’s economy The Co-operatives have grown to become one of the main economic actors in the Kenyan economy. Majority of the Kenyans are directly or indirectly benefitting from the Co-operative Movement. The Co-operative Movement has mobilized savings amounting to Kshs. 230 billion and an estimated asset base of Kshs.250 billion. The Agricultural Co-operative Societies comprise 37 %, Financial Co-operatives 45 % and the others 18 % of the registered 13,000 Co-operatives. The Agricultural Co-operatives are dealing with agricultural commodities such as dairy, coffee, horticulture, pyrethrum and cereals to mention a few. Through agricultural Co-operatives, farmers are benefiting from collection of produce, bulking and post harvest handling such as value addition, agro processing and marketing. This has assured the farmers of guaranteed incomes for sustained livelihoods. The Co-operative Bank of Kenya and the Co-operative Insurance Company have grown to be the biggest financial and insurance companies in the country respectively. Similarly, the National Co-operative Housing Union (NACHU), has been promoting housing Co-operative Societies as well as enabling the members to own houses at a reasonable cost. The Kenya Savings and Credit Co-operatives – the SACCO sector has been increasing in popularity and has been providing financial services to members in the formal sectors to be found in the urban and rural set up. In the urban formal sector the incomes of members are salary based while the rural formal sector is found in the rural areas involved with agriculture. The SACCO sector is nonetheless offering banking and financial services to Kenyans at different income levels. The importance of the SACCOs led the Government to enact the SACCO Societies ACT, 2008 and a regulatory authority – SACCO Societies Regulatory Authority (SASRA), has been put in place and is now regulating the deposit taking SACCOS to ensure member’s funds are safeguarded.

The Challenges and Opportunities in the Co-operative Movement: The Co-operative Movement is faced with global and local challenges that need to be addressed during the reengineering process. Globally, countries in Africa are faced with the problem of reduced global demand for commodities as well as volatile commodity prices and there is high likelihood of increased poverty as a consequence. Locally the Co-operatives are faced with challenges of inadequate lobbying and advocacy for an enabling environment, poor governance of the Co-operative institutions, low adoption of information and communication technology, inadequate research and development, and inadequate education and training to members and potential members. However the technological advances so far achieved as well as trade and economic liberalization, together with regulatory reforms aimed at enhancing economic integration have decreased barriers to the international markets. Co-operatives will perform even better as these challenges are addressed.

The Significance of Co-operatives in Social Development: Creating Employment, Generating Income and Reducing Poverty: The Co-operative Movement is a significant player in employment creation with an estimated 300,000 people directly employed in the sector. There are also those in indirect employment estimated at over 1 million. These are the workers employed in manufacturing and marketing of goods and services bought and patronized by Co-operatives respectively. Examples of these include office stationery used by Co-operatives, packaging materials for dairy products, machinery and equipment for agro-processing and stockiest of farm inputs. There are also people who derive their employment from marketing products produced by Co-operatives such as various dairy products like fresh milk, ghee, butter, yoghurt and cheese to mention a few. Other than generating income, Co-operatives provide the basis for sustained livelihood through the pooling together of income from sales of produce delivered to the Co-operatives on a daily basis or seasonally for milk and coffee respectively. The assured monthly incomes ensure that the basic needs are met such as food, clothing, shelter, payment of school fees. This enhances the standard of living and leads to poverty reduction. Providing Social Protection: Co-operatives are viewed as socio-economic enterprises even though the economic pillar takes more prominence. The members, leaders and management have the economic benefit at the back of their mind as a sign of a successful Co-operative. All the services and education and awareness creation is directed at the membership and little thought is given to the general public. Subsequently social protection rides on the shoulders of the economic success of Co-operatives where this happens in the products and services offered to members. A case in point is the SACCO way of operating. The SACCOs mobilize savings out of which loans are advanced. The loans come in different types and forms from loans for mitigating against emergency cases such as sudden hospitalization, deaths, court cases to development loan packages for purchasing various kinds of assets like land including the development of the same. This therefore offers quick solutions to socio-economic problems that may arise any time.

Secondly, most Co-operatives take insurance cover with Co-operative Insurance Company of Kenya, (CIC), which is owned by Co-operatives for offering protection against risks associated with the Co-operative enterprise as well as for other general risks such as vehicle insurance, family insurance scheme. This protection is however only available to those who are able and willing to pay the requisite premiums. The only free social protection that CIC gives is the corporate social responsibility programme which sets aside limited funds annually to provide needy services to the communities.

Co-operative Representation and Advocacy: The Co-operative Movement organizational structure has positioned the Co-operative Alliance of Kenya, CAK, as the lobby and advocacy arm. This means that the Co-operative Movement can and does engage various Government Ministries on legal issues affecting the Co-operative Societies. Although currently the voice has not been heard, CAK is growing steadily and will not only be a voice in the country but has ably represented the Co-operative Movement in Regional bodies such as the International Co-operative Alliance, (ICA) as well as in the Eastern Africa Farmer Federation, (EAFF). Overview of the New Constitutional Dispensation: The New Constitution of Kenya has allocated various government functions to the 47 counties. The reasons for devolving power are to: •	Promote people’s participation in governance; •	Promote equitable development and the sharing of resources throughout the country; •	Take services closer to the people; •	Enhance the system of checks and balances; and •	Foster unity by recognizing diversity. County governments will be responsible for many things that are important to Kenyans such as agriculture; basic health services and facilities (like pharmacies, ambulances, and refuse removal); air and noise pollution; county roads; water services; local tourism and county planning. Counties can pass laws on these matters and must administer them. Each county will have an elected assembly and elected governor and deputy governor. The governor will choose up to 10 members for the county’s executive committee. Just as members of the national Cabinet may not be MPs, members of a county executive committee may not be members of the county assembly. Although the county governments will be separate from the national government, with their own responsibilities, counties and the national government will need to work together. The national government and county governments must consult and cooperate with each other. The requirement that the national and county governments cooperate is particularly important in three situations: •	First, some things that counties are responsible for can’t be governed by counties acting on their own – they have national implications. Marketing of agricultural produce such as coffee is an example. Issues of value addition and agro-processing of farm produce will need to be ensured in the different counties where combined bulking may be required of produce from different counties. A national policy is needed. For this reason the Proposed Constitution says that the national Parliament can pass laws that set standards for the whole country on such things. But this must be done in consultation with counties. And the Senate will represent the interests of counties when these laws are passed. •	Second, sometimes a county will struggle to fulfill its functions. For instance, an outbreak of animal disease may overwhelm county animal health services. The Proposed Constitution says that the national executive can intervene to help but there are strict limits on the national government’s power. When it intervenes, it may do only what is necessary and must assist the county to build the capacity to fulfill all its functions on its own. Close cooperation between the county and national government is needed in such circumstances. •	Third, counties will not be able to pas all the laws they need immediately. Until they do, national laws will apply. County governments must be consulted when the national government develops laws that counties must implement. But, what happens if there is a ‘conflict of laws’. If the conflict concerns a matter that counties are responsible for usually the county law will be binding, pushing the national law aside. But, if the national law sets essential standards for the whole country (say for controlling animal disease or drugs), the national law will be binding and will override the county law. The 9 Principles of devolved Government are: 1.	Promote democratic and accountable exercise of power. 2.	Foster national unity by recognizing diversity. 3.	Give powers of self-governance to the people and enhance the participation of the people in the exercise of the powers of the State. 4.	Recognize the right of communities to manage their own affairs. 5.	Protect and promote the interests and rights of minorities and marginalized communities. 6.	Promote social and economic development and the provision of services throughout Kenya. 7.	Ensure equitable sharing of national and local resources throughout Kenya. 8.	facilitate the decentralization of State organs, their functions and services, from the capital of Kenya; 9.	Enhance checks, balances and the separation of powers. 4.	Positioning of the Co-operative Alliance of Kenya in the New Constitutional Dispensation: It is against this background of devolution of power that the Co-operative Alliance of Kenya is repositioning itself in order to serve the country better as a vehicle for socio-economic development and poverty reduction in line with the millennium development goals and vision 2030. Firstly there is the need to harmonize the current Co-operative Development Policy and the Co-operative Societies Act, CAP 490 of 2004 and the SACCO ACT, 2008 with the new constitutional dispensation since the role of Co-operatives in a devolved Government has not been addressed. Secondly the Co-operative values and principles that gives the Co-operative Identity and which have been practiced with success making the Kenya Co-operative Movement the first in Africa and seventh in the world come in handy in the era of the new constitutional dispensation. There are similarities of the Co-operative principles with the principles of devolved government such as the principles of democracy, autonomy, concern for community, co-operation and economic participation. This gives the Co-operative Alliance of Kenya a niche for playing the crucial role of leading the Co-operative Movement in actualizing the new constitution. Thirdly there are numerous opportunities that the new constitution provides for the furtherance of the growth and development of the Co-operative sector;- •	Recognition – currently the Co-operative sector is invisible and it is not mentioned anywhere in the constitution. This provides the opportunity for lobby and advocacy by the Co-operative Alliance of Kenya for the Co-operative Movement to be incorporated in all the county and national laws to be enacted in a devolved Government. •	Promotion and incubation of more Co-operatives in all the counties as the preferred model for trade, provision of services and for socio-economic activities for the rural and urban poor for employment and wealth creation. •	The Co-operative Movement has a wealth of experience in leadership and management and they could vie for positions in the county government in order to represent the interests of other Co-operative Movement. Conclusions and Recommendations: The Kenya Co-operative Movement has remained resilient amidst the effects of economic liberalization and the global financial crises given that the Co-operatives are growing and giving livelihood to close to 9 million Kenyans. The devolved governance structure provides Co-operatives the opportunity to thrive even further by addressing the socio-economic needs of the community members. The Co-operative Alliance of Kenya requires further strengthening to play the critical role of lobby and advocacy in the transition period from centralized to devolved governance structure through contribution to the enactment of county and national laws to ensure Co-operative interests do not remain in the periphery as the case is now where Co-operatives are not even mentioned in the new constitution. Considering the unique nature of Co-operatives it is imperative that the following be done to ensure the future growth and development:- a)	Revision of the Co-operative Development Policy to incorporate the new constitutional dispensation b)	Strengthening the Co-operative Alliance of Kenya to enable it lobby and advocate for an enabling legal framework for Co-operatives involvement in the devolved Government as well as facilitating the strengthening of the co-operatives in the agricultural sector. c)	Full participation of Co-operatives in the enactment of the county and national laws to ensure the interests of the Co-operators is taken into account. d)	With livelihoods of close to 9 Million people at stake, the Ministry of Co-operative Development and Marketing should be retained as a fully fledged Ministry in the new political dispensation as it is an important player in the sector. e)	Many Co-operators are uninformed on the implications of new constitutional dispensation and therefore it is important that all the Co-operative Sector Stakeholders together with the Ministry of Co-operative Development should undertake a serious sensitization campaign if Co-operatives are to participate effectively in the processes.