(HERALD) Engines behind economic growth

Engines behind economic growth
Saturday, 16 July 2011 10:56
By Gwendoline Mugauri

THEY were notorious for mismanagement of funds and leadership squabbles, but co-operatives, which were popularised at independence in 1980, are making a comeback. Perhaps the rot in co-operatives was exposed in 1999 when the then Ministry of National Affairs, Employment Creation and Co-operatives banned at least 62 of them for misappropriation of funds.

The co-operatives had suffered a slump when the Economic Structural Adjustment Programme was introduced in the early 1990s. They could not manage the swift market changes brought by the International Monetary Fund-sponsored programme.

Then came the recession of the last decade that eroded all co-operatives’ savings. Many wrote off the co-operatives because of the numerous problems they faced in terms of being productive. But things are taking a turn for the better as the co-operative enterprise is being revived to take its rightful place in the economy.

The commemoration of the International Day of Co-operatives recently revealed that co-operatives are indeed back with a bang. Vice-President Cde Joyce Mujuru said at the commemoration that co-operatives and other small businesses were now the “real engines of economic growth”.

Cde Mujuru said efforts to resuscitate co-operatives were progressing.

“Most governments create policies that are skewed towards the mainstream economic activities, considered to be the main players in the economy. Yet the real engines for economic growth such as SMEs and co-operatives are sidelined,” she said.

“Co-operatives have emerged as self-help groups, which contribute towards poverty alleviation of its members.”

Cde Mujuru said the youth and the disabled should take part in the development of co-operatives. She said co-operatives were a powerful instrument in the promotion of indigenisation and economic empowerment as members gain ownership of the means of production. The Government promulgated an official policy on co-operative development as early as 1984.

There are now registered co-operatives in a wide range of sectors such as mining, agriculture, manufacturing, housing, fishing, services and credit. For example, Mr Peter Mutekede, excelled in carpentry and dreamt of running a furniture company. His family was very sceptical about the whole idea. Little did they know that 10 years down the line, Mr Mutekede would become one of the best and most popular furniture manufacturers.

Who does not know about Glen View’s flourishing industry in household furniture, steel fabrication, upholstery, sculpturing and even coffin assembling? Mr Mutekede, who is now a successful businessman in his own right, is a proud member of the Glen View Furniture Co-operative and has his own Mutekede Investments company. His case came to the fore at the International Day of Co-operative commemorations.

Yet before the event, many questions were being asked on the state of co-operatives in the country. Are co-operatives still in existence? Are they genuine enterprises or they are just fraudulent little organisations? Do the co-operatives really benefit people? A total of 277 815 co-operatives were represented at the commemorations held in the Harare Gardens.

The president of the Zimbabwe National Co-operatives Federation, Mr Mike Duru, said co-operatives were alive and kicking.

“From 2004 to 2007, the co-operative sector dwindled slowly until a time when some banks closed and most people lost money they had saved,” he said.

“As the sector was eroded, a lot of people were not interested, resulting in many pulling out of co-operatives.”

Mr Duru said there was a lot of lobbying and policy change to turn around the situation when the economy improved.

“The good thing was that Government took the issue seriously and worked hard to change the mindsets of those who had lost interest,” he said.

[Mr Peter Mutekede (seated) shows off some of the furniture he manufactures in Glen View.]

Mr Peter Mutekede (seated) shows off some of the furniture he manufactures in Glen View.
“We even worked together with the Ministry of Local Government, Urban and Rural Development to create a model that would enable houses to be built for the people through co-operatives.”

There are at least three million beneficiaries of co-operatives, with a further one million people downstream benefiting.

“The idea behind being in a co-operative is to share ideas,” said Mr Duru.

“We do projects for the development of the communities and the nation at large. This has helped to reduce political tension among community members and address gender imbalances.”

According to the International Co-operative Alliance, a co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through jointly owned and democratically controlled enterprises. Since the most popular co-operative sector proved to be that of housing, an apex body called Zimbabwe National Association of Housing Co-operatives (ZINAHCO) was created to affiliate all the housing co-operatives.

ZINAHCO programmes and construction services manager Mr Eddmond Muzuwa said co-operatives affiliated to the body were at an advantage, especially when it came to lobbying for financial resources. “We have 120 co-operatives affiliated to us,” he said.

“We actually urge those not registered with us to come forward because there is easy sourcing of funding, easy co-ordination, easy access to land and we even offer training on governance, technical and environmental issues in relation to housing.”

Harare North Housing Co-operatives Union chairperson Mr Misheck Mangwende said the co-operative, which covers the area from Dzivaresekwa to Hatcliffe, started in 1995 and has well over 15 000 members.

“We have built about 4 500 houses, especially in the Hatcliffe area,” said Mr Mangwende.

“About 3 500 residential stands are being serviced.

“The only problem is that we have to source our own funds to look for developers to service the stands because the city council has since withdrawn that service.”

Mr Mangwende said the co-operatives had a huge impact on social development.

In the savings and credit co-operative sector, the Women Development, Savings and Credit Union co-operative was registered in 1999 and provides financial services to its members, who are all women. The union’s branch manager for Harare, Ms Nyasha Chapinga, said the mandate of the micro-finance business was to alleviate poverty among women with special focus on the economically marginalised. The union has branches in Harare, Bulawayo, Mutoko, Honde Valley, Glendale, Gokwe, Harare, Kadoma and is working on opening another branch in Mutare.

In the transport sector, Rixi Taxis Transport Co-operative was exhibiting at the commemorations. Rixi Taxis is the largest mini-cab co-operative in the country, which started off with just five taxis in the late 1990s but now has more than 50 taxis operating in different cities and towns. A member of the Fishery Co-operative from Kariba, Mr Luke Sango, said ever since he joined the co-operative last year, he can now take care of his family without any problems.

“I once joined a mining co-operative in 2000, but after I lost all my savings to it, I thought I would never join a co-operative again,” he said.

“I only joined last year after I realised the co-operative enterprise had been resuscitated.

“Right now, the economic empowerment from these co-operatives is tremendous.

“These co-operatives are indeed a poverty alleviation tool.”

Since the promulgation of official policies on co-operative development in 1984, there were several changes and new policies that were implemented with a view to revive the sector. In the past, after acquiring land, people were not allowed to develop their residential stands while at the same time occupying them. City councils required that development be done first before moving in, which proved too expensive for the prospective home owners.

But the introduction of the incremental development policy saw people being allowed to develop their residential stands while residing at the place. The theme for this year’s International Day of Co-operatives was “Youths, the Future of Co-operative Enterprise” and it coincided with the United Nations International Year of the Youth. In 2002, the International Labour Organisation adopted a resolution to promote and commemorate the International Day of Co-operatives.

The day is observed in Zimbabwe annually. -The Sunday Mail