the cooperative movement and the challenge of development

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  • THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    December 2013

    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT

  • ii

    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

  • iii

    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENTA SEARCH FOR ALTERNATIVE WEALTH CREATION

    AND CITIZEN VITALITY APPROACHES IN UGANDA

    December 2013

  • iv

    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    Research Coordinator

    Leonard Okello

    Research Team

    Associate Prof. Josephine AhikireDr. Lawyer KafureekaDr. Maurice Murari-MuhweziResearch AssistantsDaniel OpioAmon Mwiine-AshabaJoanita TumwikiriizeHarriet PamaraMargaret NakibukaJudith Ikiring OborePenelope Sanyu

  • v

    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    Table of Contents

    Acronyms ix

    Acknowledgement x

    Executive Summary xi

    PART ONE 1. Introduction 1

    1.1 Purpose of this study 2

    1.2 Study objectives 2

    1.3 Research Hypothesis 2

    1.4 Scope and Methodology 2

    1.5 Rationale of the study 3

    1.6 Conceptual Framework 4

    PART TWO 2. The historical trajectory of the cooperative movement in Uganda 5

    2.1 The formative years of the cooperative movement in Uganda 5

    2.2 The cooperative movement begins to thrive 5

    2.3 Cooperatives in the period of political instability

    1971 1985 7

    2.4 The last straw that broke the co-operatives back, 1986 to-date 8

    PART THREE 3. The regulatory framework for cooperatives 10

    3.1 Political economy of the pumps in regulating cooperatives in Uganda 10

    3.2 Current contradictions between policy pronouncements and legal instruments 11

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    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    PART FOUR 4. The advent of savings and credits cooperatives (SACCOs) 13

    4.1 The nature of savings and credit cooperatives (SACCOs) 13

    PART FIVE 5. The paradox of cooperatives in Uganda today 19

    5.1 Remembering the past cooperative achievements 19

    PART SIX 6. Citizen voices and perspectives from the in the districts covered by this study 23

    6.1 Making the case for revitalising cooperatives 24

    6.2 Bugisu Cooperative Union [Mbale] 25

    6.3 Masaka Cooperative Union [Masaka] 29

    6.4 Lango Cooperative Union [Lira] 31

    6.5 Bunyoro Cooperative Union [Masindi] 32

    6.6 Teso Cooperative Union [Kumi] 33

    6.7 Busoga Cooperative Union [Namutumba] 35

    6.8 The cooperative movement in Kigezi (Kisoro) 36

    PART SEVEN 7. The waste of physical assets and investments of cooperatives 39

    PART EIGHT 8. Lessons learnt on what to do and what not to do 43

    8.1 The power of social capital in building cooperatives from below 43

    8.2 Self-interest in the cooperative movement and guarding against abuse 43

    8.3 The need for members to keep their eye on surplus acquisition 44

    8.4 From dogmatic to pragmatic principles 44

    8.5 Emphasis on internal strength as opposed to external support 45

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    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    8.6 The need for continuous education and knowledge upgrading 45

    8.7 The need for collective storage 45

    8.8 On the question of autonomy 47

    8.9 Put money where people are 47

    8.10 Investing in value addition 47

    8.11 Inclusion of women and youth in the cooperative agenda 48

    8.12 The growing potential of burial and health insurance 48

    8.13 Alertness to non-monetary gains as well as dangers 48

    8.14 Dealing with the corruption and embezzlement monster within 48

    8.15 The critical role of Government 49

    PART NINE 9. Programming for the revitalisation of cooperatives in Uganda 50

    9.1 The national context 50

    9.2 The integrated triangular programming framework for revitalising cooperatives 50

    9.3 Our theory of change 51

    PART TEN 10. Key recommendations from this study 53

    10.1 Recommendation for a Citizens cooperative revitalisation agenda 53

    10.2 Recommendations to the Government of Uganda 53

    10.3 Recommendations to the Uganda Cooperative Alliance (UCA) 54

    10.4 Civil Society Organisations 54

    10.5 Recommendations to the Private Sector 54

    10.6 Areas for further investigation towards a cooperatives revitalisation agenda 54

    References 56

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    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    List of Tables

    Table 1: The Cooperatives to which Respondents Belonged 18Table 2: Most Important Benefits from Cooperatives in the past 20Table 3: Support for the Revival of cooperatives in Uganda 20Table 4: Examples of Cooperatives per Zone as a sample site of the region and their core activities 23Table 5: Most Important Activity People Wanted Revived Cooperatives to Handle 24Table 6: Positive Experiences Associated with Cooperatives 31Table 7: Expenditure Needs of People 47

    List of Figures

    Figure 1: Relationship between SACCOs and Producer Cooperatives Error! Bookmark not defined. 4Figure 2: Bugisu Cooperative Union, Mbale. 39Figure 3: Teso Cooperative Union Structure 40Figure 4: Kaiti Cooperative Society structures 41Figure 5: The integrated trianglualar framework for cooperatives 51Figure 6: The theory of change for citizens welfare, vitality and wealth creation 52

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    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    Acronyms

    AAIU : Action Aid International UgandaACES : Area Cooperative Enterprises ADB : African Development BankAIDS : Acquired Immune Deficiency Syndrome BCU : Bugisu Cooperative UnionBCU : Bunyoro Cooperative UnionBRAC : Bangladesh Rural Advancement CommitteeBUKYA : Buwunga Kyanamukaaka cooperative societyCA : Cooperative AllianceCBR : Centre for Basic ResearchCDO : Cotton Development OrganizationDAO : District Administrative OfficersDCO : District Commercial OfficersDFID : Department for International DevelopmentFGD : Focus Group Discussion FTI : Fair Trade InternationalHIV : Human Immune VirusI.G.As : Income Generating ActivitiesICA : International Cooperative AllianceICT : Information, Communications and TechnologyIMF : International Monetary FundKDA : Kisoro Development AgencyKgs : KilogrammesLC : Local CouncilMADIFA : Masindi Farmers AssociationMP : Member of ParliamentMTIC : Ministry of Trade, Industry and CooperativesNAADs : National Agricultural Advisory Services NCU : Nyakatonzi Cooperative UnionNGOs : Non-Governmental Organizations NRM : National Resistance MovementPAPSCA : Programme for Alleviation of Poverty and Social Costs of AdjustmentRDC : Resident District Commissioner RoU : Republic of UgandaSACCOs : Savings and Credit Cooperatives SCC : Swedish Co-operative CentreTCU : Teso Cooperative UnionTUI : The Uhuru InstituteUCA : Uganda Cooperative Alliance UCTU : Uganda Cooperative Transport Union UCSCU : Uganda Cooperative Savings and Credit Unions VSLS : Village Saving and Loan SchemesWB : World BankWTO : World Trade Organization

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    THE COOPERATIVE MOVEMENT AND THE CHALLENGE OF DEVELOPMENT A SEARCH FOR ALTERNATIVE WEALTH CREATION AND CITIZEN VITALITY APPROACHES IN UGANDA

    Acknowledgement

    This study sought to deepen knowledge about the historical contribution, present status and potential value of cooperatives as organic citizen platforms for independent efforts geared towards socioeconomic transformation in Uganda. This is against a policy context that has reduced citizens to passive actors and distant recipients of help from above. The study is also part of our commitment to take forward outcomes from the Citizens Manifesto in which ordinary Ugandans expressed interest in a revival of cooperatives.

    The findings of this effort provide an interesting reading for understanding the historical role cooperatives played in strengthening solidarity and building welfare, their status today and potential role in the future. The findings challenge the common knowledge that cooperatives are a thing of the past and collapsed! The nostalgia and resilience of the cooperatives in the face of a difficult environment in which they operate in our view, presents immense opportunity for a more system

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