The Co-operatives Act- Cap 490 which has been in existence for more than 15 years, could be reviewed in the new year.
This follows a move by the Cabinet Secretary for Agriculture, Livestock, Fisheries and Co-operatives, Peter Munya, to appoint a task force that will set this process in motion.
Kenya’s Co-operative movement is ranked the best in Africa and the 7th largest in the world.
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Outdated law
The Co-operatives Act, Cap 490, was enacted in 2005 and revised several times to accommodate changes in the cooperatives sector. However, other significant developments, such as devolving cooperatives to the County Government, is yet to be fully captured in this old and worn law.
As matters stand, each County Government has made attempts to devise its own rules and regulations, with the former Ministry remaining in Nairobi as a mere state department with no clear budgets and mandate. The 15-year-old Cap 490, Co-operatives Act remains old, outdated, and out of sync.
Members of the task force
In the latest gazette notice, dated 18th December 2020, the Taskforce appointed by Munya will include Nelson Kuria, former boss at CIC Group as Chairman with 14 other members who have Professor Esther Gicheru, Geoffrey Njangombe-acting Commissioner for Cooperatives, Francis Kamande Chairman of National Co-operative Housing Union (NACHU) and Jeremiah Were (Sacco Societies Regulatory Authority).
Others are Mercy Njeru (KUSCCO), Eliud Nzola (Co-operative Bank), David Obonyo Senior Commissioner at the State Department for Co-operatives, and Mrs. Joyce Nkirote, both acting as joint secretaries to the task force.
As 2021 rolls in, all attention in the cooperatives sector is when the Cabinet will receive the report from this task force that will usher in a new policy paper. This document is expected to trigger a review of the old and outdated Co-Op Act, Cap 490.
Close to a decade after the promulgation of a New Constitution, the Trillion Shilling co-operatives still held hostage by an archaic Co-operatives Act- a set of laws that do not reflect the fast-changing technological landscape, business environment, and devolved system of governance that now exist.
While a draft policy document for the cooperatives sector is complete and validated by stakeholders, this document is still stuck at Cabinet.
Until the policy paper leaves this point, the process of amending the Co-operatives Act, Cap 490, to reflect the devolved system of governance and the new constitution will not commence.
As matters stand, with no new Co-operative Act in place, crucial functions that were undertaken at the Ministry of Cooperatives, have been transferred to the Counties. However, these changes cannot be done because they must be anchored in the Co-operatives Act.
Teething problems at the County Level
In the meantime, with no uniform Co-operatives Act- each County is groping in the dark in a desperate attempt to supervise and regulate respective cooperative societies within their jurisdictions. Many County assemblies are busy crafting proposals to govern cooperative societies without any national policy guidelines.
Ideally, Counties are expected to regulate the formation, registration, promotion, and development of cooperative societies. They are also expected to enhance good corporate governance in these societies and manage conflicts.
But because the Cooperatives docket is yet to be fully devolved, confusion reigns supreme in these devolved units.
For instance, Cabinet Ministers in charge of Co-operatives at the country level and cooperatives development commissioners are still clueless because their mandates are vague and not in law.
A toothless state department for Co-operatives
The same sad story is replicated at the national office where the State Department for Cooperatives continues to suffer severe budget cuts and cannot, therefore, discharge such functions as capacity building to the cooperative enterprises and cooperative technical officers.
Only when Cap 490 is reviewed or repealed that friendly laws and financial and capacity building efforts to support cooperatives within the Counties can begin.
There is also a need for a fund to assist ailing or dormant cooperative societies within County Governments.
These societies can also be assisted to form linkages with other bodies such as KUSCCO and CIC Group to benefit from advocacy work and insurance services, respectively.
It is only a new set of laws that will curb theft, mismanagement, and deal with poor corporate governance, which faces the cooperatives sector.
The absence of a robust regulatory framework opens an avenue for officials who steal and run down cooperative societies to escape prosecution.
Rogue employers still get away with a slap on the wrist when they fail to remit SACCO dues.
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