Andrew Bibby



Andrew Bibby is a professional writer and journalist, working as an independent consultant for a number of international and national organisations, and as a regular contributor to British national newspapers and magazines. He is also the author of a number of books.

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Standing on their own two feet: cooperative reform in Tanzania

This article by Andrew Bibby, in a slightly different form, was first published by the International Labour Organization, 2006

MAMSERA, Tanzania - In the foothills of Mount Kilimanjaro, the Mamsera Rural Cooperative Society is at the heart of community life in this coffee-growing village. Here, villagers bring their harvest of coffee beans to be weighed and graded before being taken down the unmade road to the coffee auctions in Moshi.

Inside the cooperative's single story office building, Mr. Camili Mariki, the assistant secretary, points to his mobile phone which, he explains, keeps him in touch with current coffee prices at the market. It enables him and his colleagues to try to ensure that the village's coffee beans are taken to market at the best possible time. Typically, coffee will fetch 1,500 and 2,000 Tanzanian shillings (about US$1.50) a kilo, though the cooperative has on occasion received more than US$2 a kilo. Current prices are posted each day on the large blackboard outside the coop building for all to see.

Mamsera's cooperative has about 1,100 members who meet annually, in March or April, to discuss the budget for the coming year and to decide the mark-up price the coop will charge to cover its overheads. Day-to-day management is delegated to an elected nine-person board, who in turn oversee the work of the five employees.

"We're standing on our own feet", says Mr. Mariki with pride, adding that the coop has built up over 30 million Tanzanian shillings (US$28,000) in bank deposits. The strength of the enterprise means that Mamsera's coop can expand its horizons. One idea currently being discussed is to sell coffee direct to the European market, eliminating some of the costs involved in selling at the auctions in Moshi. The cooperative has also diversified its activities by beginning a small-scale brick manufacture business; operating two local shops; and acting as an agent for agricultural fertilizers, pesticides and seeds.

A model of reform

It's a success story which unfortunately is not shared by all cooperatives in Tanzania . "Some neighbouring cooperative societies have nearly collapsed," explains Mr. Mariki, pointing to the financial problems they have suffered from being over-dependent on a single primary crop.

Tanzania 's cooperatives have a long and proud history, and the movement was particularly strong in the first decade of independence. Since then, however, the outlook has been less positive. For a time, cooperatives became a tool for top-down governmental policies and were effectively integrated into state structures. When trade liberalization was introduced in the 1990s, the cooperative movement became unresponsive to its members' needs and was therefore unprepared for competition from the private sector.

The turning point came in 2000, when a special Commission was established by then-Tanzanian President Benjamin Mkapa to investigate what could be done to rejuvenate the country's cooperative sector. The Commission was blunt in its critique of the movement, which it said suffered from a lack of capital; unwieldy structures; and problems with poor leadership, misappropriation and theft.

Since then, a series of concerted steps have been taken to reverse the trend. New coop legislation, which among other things aims to strengthen member participation and democracy, was passed in 2003, while last year [2005] the government approved an overarching Cooperative Reform and Modernization Programme (CRMP). Member empowerment and commercial viability are seen as the two central themes of this reform agenda.

Another example of successful cooperative activity in Tanzania is its network of credit unions, known locally as Savings and Credit Cooperative Societies (SACCOs). There are about 1,400 registered SACCOs, ranging from community-based initiatives recruiting members who work in the informal economy to workplace-based SACCOs. Posta na Simu is one such example, Tanzania 's largest coop, which provides savings and loans services to employees of Tanzania Telecommunication Company, Tanzania Postal Company, the Postal Bank and the Communication Regulation Authority.

Posta na Simu is also aware of the need for cooperatives to adapt to changing times. Since widespread redundancies are currently a facet of the telecoms sector, SACCO is changing its approach so, among other things, it can assist members who want to start their own businesses.

Seeds of change

Implementing the Cooperative Reform and Modernization Programme, which is intended to run from 2005 through 2015, is an ambitious task. It has already attracted some Tanzanian government funding but will probably require additional donor funding to be successful. However, a start has been made at the grassroots level to re-invigorate the democratic principles of cooperation.

Each coop in selected regions of Tanzania has recently been required to call a special general meeting of members to elect a new board. Candidates for these leadership positions nominate themselves in an election process which is carefully monitored by Tanzania 's Registrar of Cooperatives and his staff. Would-be leaders who have been associated previously with corruption, or who possess insufficient experience and skills, are ineligible to stand.

Dr Anacleti Kashuliza, Registrar of Cooperatives, says the elections have acted as a clear signal both to old-guard leaders and to coop members themselves that the old ways are changing. He describes the atmosphere at one lively election meeting held recently for a coop in the Shinyanga region as typical: "One thousand coop members turned up to elect the leadership. You can feel there's something happening here," he says. Nevertheless, at present the election process has yet to be extended to coops throughout the whole of Tanzania .

Tanzania 's cooperative reform programme reflects a wider process of reform internationally. The ILO's Promotion of Cooperatives Recommendation No. 193, agreed in 2002, provides the global framework for this reform, with its call for governments and social partners to support the development of strong, financially viable and autonomous cooperatives. As in Tanzania, many countries have taken the opportunity in recent years to modernize the legislative structures under which cooperatives operate.

In another recent initiative, the ILO has joined with the International Cooperative Alliance (ICA) to launch "Cooperating Out Of Poverty", the global cooperative campaign against poverty. This step, which is the result of an on-going partnership between the ILO and the ICA, aims to highlight the role which coops can play in poverty-reduction programmes.

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