The role of the cooperative movement in the economic development of Uganda
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Date
1968
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East Africa University
Abstract
An attempt is made in this thesis to present a general survey of the role of the Uganda Co-operative Movement in the economic development of the country, as a springboard for a possible further investigation of particular aspects of the movement’s activities in the development effort. The important role being played by the movement in the development of Uganda’s agriculture and other activities which are ancillary to agriculture has been analyzed in this work. The main areas of inquiry covered those aspects of the movement’s activities connected with economic growth, those concerned with efficiency and equity and those relating to the political power structure. The study covers the main period of growth of the movement from 1945 onward. The investigation has been primarily at union level. In most underdeveloped countries, great importance is attached to the development of co-operative as a means of improving the economic and social status of people through increased efficiency and social justice. Hence, development must be directed towards the objective of raising people’s incomes through providing opportunities for earning incomes co-operative undertakings, it is assumed, would provide, not only opportunities for earning incomes, but for raising the level of such incomes. On the part of developed and industrialized countries, fostering co-operative development in low-income countries is means of providing effective aggregate demand for the goods of the former, through an increase in the income of earning capacity of the latter. This objective of earning a higher income may however, be frustrated by poor administration in the management of the movement itself. Also, the objective of a movement may be seen at different points of view. Government, for example, may use co-operatives as a means of achieving, not only economic satisfaction, but of other ends, too. Hence, there may be a divergence between economic, social and equity considerations from the national point of view. Before the advent of co-operatives in Uganda, the market structure in the cotton and coffee industries was monopolistic. The two industries were controlled by non-Africans. One way to challenge this dominance was by the emergence of co-operatives of peasant farmers as a “countervailing power”. Conditions of monopoly and exploitation favour co-operative development in order to enhance the market power of those subject to those conditions. The main target of attack was the profit making cotton industry which was the mainstay of the economy of the country at that time. At first, co-operative endeavours and African participation in the processing industries were restricted by the earlier administration, but since the post-war period, co-operative development has been encouraged to the extent that the indigenous Government, since the post-Independence period, has adopted the movement as an instrument to effect social and economic changes. As the economy of the country is broadly based on agriculture, the activities of the movement are in the field of crop marketing. Owing to the Government’s policy of Africanizing the economy through co-operatives, the movement has, by 1967, acquired nearly 100% take-over of cotton ginning in the country, at the expense of the private sector; similar attempts are being contemplated in the coffee industry. At the moment, however, there is competition in both coffee and minor crops industries. By the 1965/66 year, co-operatives were marketing about 65% of the country’s cotton crop and ginning about 60% of it. In coffee robusta, primary societies, by 1964/65, marketed 42% of the country’s crop and processed 42% of it, but by 1965/66 the figures had come down to 31% and 29%, respectively, owing to competition from the private sector, in Arabica coffee, co-operatives are providing and processing over 80% of the country’s crop, most of which comes from the Bugisu societies. The movement’s role in the development effort calls for a diversification of its activities beyond crop marketing. Hence co-operatives engage in activities ancillary to marketing, such as thrift, credit, and farming (through credit and group farming schemes), as well as general trading, through consumer and supply societies. Other services of the movement include education and publicity. Under the credit and group farming schemes, Government has injected considerable capital into rural development programmes through primary societies. The strength of the movement lies mainly in the support it gets from the government for its political and social functions as a device for redistribution of income and economic power; its weakness lies in its economic performance. While some unions have been successful in their market performance and passed on their members regularly, the profits they make, others have not , but rather dissipated their surpluses in extravagant expenses and high overheads. Thus, the co-operative have not been as efficient as expected, and are now faced with that ask of adapting co-operation to the needs of a rapidly developing country, in reconciling economic objectives with social ends. The changes that have been brought about by social and economic circumstances make it imperative that the movement must adjust itself to new conditions. However, the educational value of the co-operatives has been tremendous. The efficiency of the movement has been adversely affected by a number of factors, such as improper management; conflicts between management and committees; capital constraint; rapid growth of the movement and the expanding size of business units being out of proportion to the calibre of management available; political infiltration into union/society administration; and disloyalty of members of the movement. To overcome these problems needs a reappraisal of the policy of Government towards the movement as well as that of the movement itself, in order that the movement may be able to fulfill the major objective of improving the economic and social status of its members.
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Keywords
Co-operation, Uganda, Economic conditions, 1945-1990
Citation
Okereke, O (1968) The role of the cooperative movement in the economic development of Uganda. Masters dissertation, East Africa University. Available at http://41.86.178.3/internetserver3.1.2/detail.aspx?parentpriref=