Government is reviewing the policy and law governing cooperatives so as to curtail recurrent issues that have been hampering the development of cooperatives in the country, according to the Trade and Industry minister Vincent Munyeshyaka.
He was speaking during the closing of the cooperatives’ exhibition held at the Kigali Conference and Exhibition Village (Camp Kigali) that was concluded with a discussion on unlocking financial constraints for cooperatives in Rwanda, developing strategic partnerships, embracing good governance in cooperatives for growth and sustainability as well as market linkages.
The minister said that the current cooperatives’ policy was developed in 2006, when there were only about 900 cooperatives, and that the number has since drastically grown to 8,800, which he said calls for a review of the policy to ensure effectiveness.
He said managers of cooperatives mismanage them and embezzle assets with impunity because of loopholes in the legal framework.
Other problems facing the cooperatives sector include lack of access to finance from banks, lack of capacity building for members, among others.
“We are reviewing the policy regarding cooperatives which, by May this year, the cabinet will have approved it. We are also reviewing the law related to the cooperatives. Rwanda Cooperatives Agency is also going to be revamped for it to properly discharge its mandate,” he said.
“The new policy and law will ensure that responsibilities of cooperative structures, namely; primary cooperatives, unions, federation and confederation, are different but complementing one another in order for all cooperative issues to be addressed in a well-coordinated way,” he noted.
He said that even though some cooperatives grow and generate good revenues, disputes and embezzlement trigger the collapse of the cooperatives despite having been operating well for many years.
Minister Munyeshyaka said the ministry will soon conduct field assessment, along with other concerned institutions, to ensure all embezzled funds and properties are returned.
“The cooperative agency says that so far cooperatives have assets worth over Rwf43 billion but, over the years, there continue to be cases of embezzlement which means that these cooperatives end up not helping much the members,” he said, adding that these assets should be used to acquire loans from commercial banks or Saccos.
Innocent Nzabonimpa, the president of COPANYAKA, a beekeeping and honey processing cooperative, said the cooperative started in 2007 in Kayonza District with 140 members but poor management and embezzlement by previous leaders led the cooperative to collapse until there remained only 30 members in 2015. Most gave up after they saw no benefit from it.
Working towards industrial level
Munyeshyaka said that once cooperatives grow, they will become companies that can invest in factories, especially in the agro-processing sector.
Dr Chiyoge Sifa, the Regional Director at the International Co-operative Alliance, said: “Yes, we talk about financing of cooperatives, but it should be facilitating them so that they become self-reliant.
“Rwanda’s development agenda cannot be realised without development of cooperatives which need good structural framework and good operating environment.”