According to Federal Cooperatives Agency (FCA), in Ethiopia there are 90 thousand basic cooperatives, 388 unions and four federations across the country serving over 21 million members. These cooperatives are providing basic agricultural and industrial products and play a key role in stabilizing the local market.
FCA Public Relation Director, Ayalsew Workneh says currently the role of cooperatives is growing as they are becoming the back bone of the society in providing necessary products regularly. Cooperatives are involving in many sectors in production, distribution and retailing different products. They have also created strong chains from urban to rural level.
These days, cooperatives in Ethiopia are engaged in the export sector. During March 2020, only in one month, cooperatives earned over 10 million USD from export and nearly USD 60 million in nine months, Ayalsew told The Ethiopian Herald.
On March, seven cooperatives and one federation were exporting their products to six countries and earned 10.35 million USD foreign currency many. Ayalsew said that this foreign earning was gained mainly by exporting 2438.5 metric ton agricultural products. The products are 1,695 metric ton coffee and 744 Soybean exported to Belgium, USA, Saudi Arabia, United Kingdom and Australia.
Ayalsew added that during the past nine months, the cooperatives earned 59 million USD by exporting agricultural products. This shows that, Ayalsew said, the participation of cooperatives and unions in the country’s economy is growing which needs further support. As to the director, especially after the COVID-19 pandemic, cooperatives need new form of governance.
This year, the agency holds assessment on the country’s cooperatives to identify the active and passive ones and to evaluate their overall activities, Ayalsew noted. Data was already collected and the assessment is currently under analysis.
The aim of the assessment is to identify the shortcomings and limitations, to evaluate the level and activities of the cooperative associations and then to provide necessary associations mainly to strengthen their capacity and then to transform the sector. Ayalsew noted that the assessment is now on analysis, although the outbreak of COVID-19 pandemic delays the evaluation.
Federal Cooperatives Agency is accountable to Ministry of Agriculture and the Ministry’s support is limited only for agriculture related cooperatives and even cooperatives policy is under the policy of the Ministry of Agriculture. But now days, the role and participative sector of cooperatives becomes broad for example in Ethiopia there are micro-finance cooperatives, tourism, forest, agriculture and other sectors which needs different structure with strong independent decision maker institution, Ayalsew noted.
With the goal of transforming the cooperative sector with clearly identified strategy, destination point, skilled human resource and capable skilled leaders mainly to properly serve the demand of their members and to contribute to the national economy, a 15 year road map and new cooperative policy was prepared and provided to relevant government by Ministry of Agriculture.
The policy and the road map aims to implement the basic cooperative principles, to create strong and capable cooperative association to run their own business based on their principles, plans, directions and governance. As to her, to bring the needed result and to properly manage the associations with over 21.1 million members, the sector needs new independent structure.
In addition, Ayalsew reiterated, due to the outbreak of COVID-19, it is difficult to lead cooperatives with the old system and may need new governance since it is difficult to run this huge sector business as usual. What should look like the governance issue of cooperatives following the pandemic is the current global agenda of cooperatives and International Cooperatives Agency is calling to implement new governance directions to withdraw from the pandemic effects early.
This week the Development Bank of Ethiopia announced that it allocates two billion birr to cooperatives and microfinance institutions for loan.
The Ethiopian Herald May 23/2020
BY DARGIE KAHSAY
