ILO supports the transformation of the Cooperative Sector in Kenya

Between January 22 – 31, 2024 the ILO worked with key Government departments along with the Cooperatives University of Kenya, and Cooperatives Alliance of Kenya, to finalize the drafting of the Kenya Cooperative Transformation Strategy.

News | 01 February 2024
In line with the ILO’s Promotion of Cooperatives Recommendation, 2022 (No.193), Kenya recognizes the role of cooperatives in jobs creation, resource mobilization and socio- economic contribution to the nation’s development. The Government of Kenya’s social and economic plan dubbed the Bottom-Up Economic Transformation Agenda- (BETA) has placed cooperatives at the centre of its development plan.

BETA identifies cooperatives as an enabler that can facilitate positive changes at the bottom of the pyramid. Cooperatives cannot only drive organization of producers and aggregate production at the primary level but can also be used to promote access to markets, Business Development Services, financial services, social protection among other services. Over the years the cooperative sector in Kenya has lost its competitiveness due to changes in the business environment, governance challenges, advancement in technologies, and the decreasing returns to the agriculture sector among other challenges. To enable cooperatives to anchor its development plan, the Government has embarked on a cooperative sector transformation journey to improve the sector’s productivity, efficiency, and accountability.

The ILO, through the Partnership to Improve Prospects for Forcibly Displaced Persons and Host Communities programme (PROSPECTS) has been providing technical support to the Government to develop the Kenya Cooperatives Transformation Strategy (KCTS). A sector stakeholder consultative meeting was held in August 2023 to align the sector priorities to the BETA, and to prioritize issues that needed to be addressed in the transformation. Further sector consultations at grassroot level were held to gain buy in and provide room for public participation as required by law.

From 22-31 January 2024, ILO supported the organization of a final workshop that brought together key Government departments including the State Department of Cooperatives, the Presidential Economic Transformation Secretariat (PETS), the Cooperatives University of Kenya, the Attorney General’s Office, the Kenya Law Reforms Commission (KLRC), the Council of Governors, Cooperatives Alliance of Kenya, and the SACCO Society Regulatory Authority (SASRA). The objective was to finalize the drafting of the Kenya Cooperative Transformation Strategy. During the workshop, the following 11 key pillars were identified to enable the cooperative transformation agenda in Kenya: -

Pillar 1: Policy, Legal, Regulatory, and Institutional Framework, which focuses on establishing a robust foundation for cooperative development by formulating and implementing effective policies, legal structures, regulatory frameworks, and institutions.

Pillar 2: Cooperatives Compliance, which emphasizes the importance of compliance with established regulations and policies, encouraging cooperatives to adhere to cooperative principles and legal standards.

Pillar 3: Cooperative Governance which involves mechanisms for democratic decision-making, ensuring fair representation, and establishing accountability mechanisms to enhance the overall governance of cooperatives.

Pillar 4: Cooperative Productivity, Value Addition, and Market Access, which focuses on enhancing the economic viability of cooperatives through strategies to improve productivity, add value to products and services, and facilitate market access, ultimately contributing to the economic success of the cooperative enterprise.

Pillar 5: Cooperative Training, Information, and Research, which includes building the capacity of cooperative members and stakeholders through training, information dissemination, and research for informed decision-making and continuous improvement of the sector.

Pillar 6: Cooperative Knowledge Management which puts emphasis on the systematic organization and utilization of knowledge within cooperatives. It involves the creation of knowledge-sharing platforms, documentation of best practices, and fostering a culture of learning and innovation to enhance the overall knowledge base of the cooperative community.

Pillar 7: Cooperative Financing and Investment which addresses the financial aspects of cooperative development, including mechanisms for raising funds, managing finances effectively, and promoting responsible investment practices to ensure the financial sustainability of cooperative enterprises.

Pillar 8: Information, Technology and Digitization which explores the integration of Information and Communication Technologies (ICT) and other innovative technologies within the cooperative sector. This pillar aims to enhance efficiency, connectivity, and competitiveness through the adoption of modern technologies.

Pillar 9: Inter-Linkages and Coordination with Strategic Partners which underscores the importance of collaboration and coordination between cooperatives and various strategic partners.

Pillar 10: Cooperative Communication which focuses on promoting collaboration, transparency, and unity among members, stakeholders, and the broader community for social solidarity.

Pillar 11: Cross cutting Issues: Climate Change, Disaster Preparedness, Gender Inclusivity, Refugee Inclusion, Mainstreaming Youth, and PWDs, Peaceful Coexistence and wealth Distribution, which addresses key overarching concerns that have a profound impact on the cooperative sector.

The workshop also served to prioritize the transformation pillars and review the legal framework (Act and Regulations) that will enable the implementation of the strategy. As a next step the strategy, revised Cooperatives Bill and Regulations will be presented to the responsible parliamentary committee for enacting, before rolling out the implementation plan. The ILO will continue to provide technical assistance to Government to strengthen the sector to promote social solidarity for economic growth.