Rwanda’s cooperative strategy against poverty

Rwanda’s strategy of fighting poverty, like in most African countries is through, the establishment of cooperative companies, meant to empower citizens economically.
Coffee Cooperatives in Rwanda are blossoming. (File photo).
Coffee Cooperatives in Rwanda are blossoming. (File photo).

Rwanda’s strategy of fighting poverty, like in most African countries is through, the establishment of cooperative companies, meant to empower citizens economically.

According to the Ministry of Trade and Commerce’s, (MINICOM), strategy document, a Cooperative Company is an enterprise owned by an association with natural or legal persons whose objectives are to satisfy their common needs.

For instance the nature of a co-operative ranges from one of tomato sellers to an association of house builders. As a clear way of satisfying or meeting common needs of its members; cooperatives open channels of quick accessibility to products and services thus uplifting the status and well being of people.

A UN Economic Commission for Africa, (UNECA), report confirms that by 2004 the continent’s poverty levels had grown by 43 per cent since 1994. It is therefore evident that Africa is a poverty, stricken continent, with women still constituting about 80 per cent of those living on less than a dollar per day.

Such a threat of fast growing poverty, calls for a pooling together of the available resources and cooperate out of poverty.

The Cooperative Facility for Africa (Coop Africa) is a programme that was established to promote cooperative development in Africa as a means of poverty eradication.

So far Coop Africa covers 9 countries in Eastern and Southern Africa and has promoted an enabling legal policy environment which has resulted into effective cooperative unions, in the two regions.  

Today, over 100 million jobs have been generated by cooperatives around the world, with the highest attributed to the Agricultural sector.

This is mainly because the sector is a major source of income and employment in many countries; these organisations have therefore been very influential in providing jobs to the rural communities, according the International Labor Organisation-ILO fact sheet.

In some African countries, the organisations are the second most important employer immediately after the Government.

Statistics on the Cooperative Movement show that by 1996, the farming cooperatives had employed about 100,000 people in South Africa and 42,000 in Morocco.

In fact most regions have majority of salaried employment created through activities of agriculture, commercialisation, production and packaging among others.

The cooperative movement in Rwanda is promoted, supervised and regulated by the Cooperative Task force that under the MINICOM.

Just like other African countries, Rwanda has a big number of women constituting the majority poor - especially in the rural areas.

The government under MINICOM implemented a policy of organizing the women in generating their own income; especially through weaving, knitting, tailoring, and embroidery among others.

In many cases such services or products offered by these cooperatives would be unavailable if members acted alone.
This implies that individual income increases as members’ benefit from each other thus lowering poverty levels.

According to Damien Mugabo, the Chairman of the Cooperative Task force in charge of cooperative promotion, historically, co-operatives officially started operating in Rwanda as formal economic units in 1949.

This was after the Belgium government released a decree that allowed cooperatives to be instituted as economic entities with a legal framework in Rwanda.

Many associations and pre cooperatives came up at the time and by then the power to issue renewable contracts to any cooperative that wished to operate, was in the hands of the local administrators.

Many even operated without license as there was no serious enforcement of a clear critea of operation. At independence time in 1962, Rwanda had 8 registered cooperatives somuki, georwanda, impala, nkora, abahizi, trafipro, the ntendezi, and codar.

Over 22,475 registered members were benefiting from cooperatives until the 1994 genocide destroyed the movement through destruction of property, trust capital and general human capital.

Rwanda’s economy greatly suffered, A Rwanda report of February 2007 for instance showed that the Gross Domestic Product, (GDP), fell by 50 percent in 1994 alone. However despite destruction, the country’s co-operative sector steadily developed in the aftermath of the genocide.

In 2005, the government took a decision to consider cooperatives as a strong poverty eradication tool. At this time measures were put in place, to allow only strong and viable cooperatives that can improve the social welfare of the population to develop.

Government then set up the Co-operative Task Force which was instituted to promote co-operative formation. 2005 was therefore the focal point in the development of the cooperative movement in Rwanda.

A policy was also drafted to regulate the formation and institutional framework of the cooperative movement. Today, co-operatives are the leading, employment creation and poverty reduction strategy that Rwanda has embarked on.

Mugabo also emphasized that the government is yet to replace the task force with a stronger institutional framework, meant to increase the effect of cooperatives as a strong poverty reduction strategy.

“We have done a lot of work, mobilizing development of co-operatives and indeed more people have joined the institution. However our staff is still small in numbers, but a new Agency is yet to be instituted and this will accomplish the stated mission,” he emphasised.

Therefore, there is a full poverty reduction potential and progress through cooperatives. This is mainly evident in Rwanda’s agricultural sector.

Coffee cooperatives such as IAKB, AKG, ABAKUNDAKAWA and COOPAC, were formed with a principle objective of finding direct market for their members’ coffee.

The Rwanda report of February 2007 also stresses that coffee has always been a top priority for reconstructing post-genocide Rwanda; as the agriculture sector contributes 41 per cent of the country’s GDP, thus constituting 90 percent of the populations’ employment.

There are co-operatives in every sector of Rwanda’s economy. Since most employ a big percentage of the population, while marketing each other’s produce, development is bound to take place.

Even developed countries have cooperative organizations in most of their sectors, for example Denmark, Norway and other milk producing countries strongly rely on cooperatives in order to market their milk.

Rwanda is on the right track. Mugabo advises that if the poor pool their resources together, each can successfully benefit from the collective resources.

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