How SACCOs can help members survive COVID-19 social effects

Last night, President Museveni announced the latest escalation in a series of measures aimed at containing the spread of the novel Coronavirus, essentially putting the entire country under lockdown. 

I am convinced that these measures, while drastic, are necessary, given the nature of the virus and the speed with which it spreads, as we have seen in other afflicted countries like China, Italy and now the United States, among others.

That being admitted, it is inevitable that the strict lock down will impact Ugandans in many ways and threaten the very survival of some.

While different players look for ways to contribute to alleviating the spread and impact of the virus, I wish to invite the Cooperative movement to stand up and come to their members’ rescue. 

The approaches that can be adopted are as numerous as the active cooperatives in the country, and would vary depending on the issue being targeted. I will address myself only to the employee-based SACCOs, and how they can help their members continue to access the most basic necessities. 

Most government and private institutions are host to such SACCOs. A few examples: Ministry of Finance, Parliament, Makerere University, URA, UMEME, UWA, Electoral Commission, New Vision, UPDF, Police, Districts etc.

According to the latest figures from the Uganda Bureau of Statistics (UBOS), Uganda currently has close to 310,000 civil servants, of whom a significant number belong to a work SACCO.  Let us assume about 180,000 Civil servants (close to 60%) belong to their respective work SACCOs. 

If we add to these the number of individuals belonging to SACCOs in the formal non-government and private sectors, plus the members of the UPDF’s mammoth Wazalendo SACCO whose membership stands at close to 70,000, we can put the total members of employee SACCOs at not less than 300,000. Assuming that each of these people has an average of four dependants, this means they could potentially support over 1.5m people (including the employees).

The need

Following the shutdown of a number of sectors of the economy, including most means of public and private transport, panic set in and many people stocked up on foodstuffs and other supplies. At first, this led to a drastic increase in prices by traders only too happy to cash in on the heightened demand, prompting a presidential order forbidding the increases. However, I believe this measure provided only temporary relief. 

My observation is that most Ugandans think the crisis will last for no more than a month. As such, they have stocked moderately, and will probably run out within two weeks, a month at most. Yet, as we have seen with countries like Italy, the situation is unlikely to stabilize in less than two months.

Although cargo transport was not prohibited, the combination of increased restrictions on the operation of markets, public passenger transport and private transportation means constitutes a serious disruption of the traditional distribution network for agricultural products.

Thus, on the supply side, it is going to get increasingly more difficult and costly to get goods from the farm gate to the final consumer. On the consumer side, as home supplies run out, further raids on the shops will ensue, resulting in depletion of the stock in shops and markets.

Therefore, despite the prohibition against price hikes, we are likely to see a steep increase in prices solely due to market forces.

SACCOs to the rescue

Basing on this assumption, I would appeal to the employee SACCOs to invest in the procurement of dry rations of staple food stuffs for their members. Rice, posho, millet flour, beans, ground nuts and the like, would be most appropriate. 

By the end of the first month of the shutdown, most people’s reserves will be depleted. If these SACCOs come in with their supplies at that very time, they will certainly alleviate a very desperate situation not only for their members but also help the government resolve a potential crisis. Not only will they save a lot of lives, but will do so at reasonable prices. Moreover, they will easily recover their money by deducting from their members’ salaries at source.

What’s more, in choosing their suppliers, they give priority to other cooperatives around the country both to supply the goods and to provide support services. For instance, they could engage dairy, grain, honey and other producer cooperatives to mobilise the necessary supplies that members need, and then coordinate with transportation societies to get the goods to the areas (e.g. towns) where their members are most concentrated. They can even engage the numerous boda boda SACCOs to handle deliveries to their members’ doorsteps.

The same approach can be undertaken with regard to sourcing and supplying other essentials like soap, salt, sugar and the like, except here negotiations would be done with wholesalers or even the manufacturers, and then supplied to members.

Benefits

In providing these solutions, employees SACCOs stand to gain in three ways:

First, this venture provides employee SACCOs an opportunity to demonstrate value to their members and meet urgently felt needs by bridging the critical supply gap that is bound to result from the disruption of the established supply and distribution chains from producer to consumer.

In this way, the SACCOs would make some modest “profits with a human face”, in line with cooperatives principles.

Second, it would give much-needed support to the rural economy, especially to the members of producer cooperatives, many of whom are already struggling to get their goods to market under the current conditions.

Finally, and perhaps most importantly, it is an opportunity for these SACCOs, and for the Cooperative movement as a whole, to play their part in supporting, not just their members, but the entire society itself, to make it through the pandemic. When this is all over, the institutions that will be remembered are those that provided solutions during the dark hours of the COVID-19 nightmare.

I would appeal to employers and government to encourage and support all such SACCOs to implement this initiative. 

The author is a former Cooperative Officer and former Chairman of the Electoral Commission SACCO.