Banyankore Kweterana Cooperative Union Ltd, a historic cooperative from Western Uganda, is on the verge of collapse due to leadership challenges and crippling debt.
Once a leading coffee union in Uganda, Banyankore Kweterana has endured decades of steady decline, struggling in vain to regain its lost glory. In its heyday, Banyankore Kweterana consisted of 358 member primary cooperatives, but currently has 150 only active cooperatives.
The sorry state of the Union was revealed last Thursday at the cooperative’s special Annual General Meeting convened by Robert Bariyo Barigye, the newly appointed acting Registrar of cooperative societies.
The tumultuous AGM started on an acrimonious note with misunderstandings between the Union’s management and board on who could attend the special meeting.
The heavy police deployment at the Union’s premises in Kakoba division Mbarara City, where the meeting was scheduled to be held, did little to ease the prevailing atmosphere of tension.
After numerous consultations with Ministry of Trade officials, some individuals who had been blocked from attending the meeting- including outgoing Chairperson Douson Mwijuka- were allowed entry.
According to Douson Mwijuka, the latest standoff has its roots in a September 2019 petition by members of the Union to the Office of the Registrar of Cooperatives for an investigation into some of its leaders over suspected inventory fraud.
“Members wrote a petition in September 2019 to the Registrar of Cooperatives about the mismanagement of funds in Banyankore Kweterana, specifically against the former Chairperson and some management staff. The request was honoured by the Ministry of Trade, and after the petition we had a special general meeting on October 18, 2019,” Mwijuka narrates.
According to Mwijuka, the October 2019 general meeting resolved that an external audit be conducted to investigate the state of the Union.
”The findings were supposed to be discussed at length and presented to the general leadership of Banyankore Kweterana for implementation.”
In-fighting
However, Mwijuka says the audit sparked off in-fighting after some members discovered they were implicated in the resulting report.
“I happened to discuss the draft report with the vice Chairman, the Treasurer and Commercial Officer Bushenyi, but there was betrayal in its implementation because the vice Chairman (Bens Nuwasasira) opted to protect some of the management staff who were implicated by the report.”
With the date for this year’s special AGM, at which the damning audit report was to be shared with members approaching, Mwijuka’s adversaries allegedly moved to have him locked out of the meeting.
“They connived with security officials in Mbarara to make sure that I would not attend the general meeting, because they knew that I would be a stumbling block. However I contacted officials from the ministry of trade and the acting commissioner and they intervened to ensure that I joined the meeting,” said the outgoing Chairperson.
Demands for justice
Once the meeting began, 75 out of 100 delegates voted to elect a new board committee and kick out the beleaguered board, while a few abstained.
“It’s high time we elected a new board and started afresh so that our local cooperatives should not collapse. The current board has failed,” said one, Elisha Marimba.
The Union’s incumbent management was also suspended in order to allow for the appointment of a new management committee.
With guidance from the Registrar, members elected a nine-member committee board headed by Emmanuel Natukunda to run Banyankore Kweterana for the next two years.
Mwijuka called for accountability by members of senior management implicated in the audit report.
“They should be answerable to the authorities and the general membership of Banyankore Kweterana” Mwijuka said.
Innocent Aribobwe, one of the delegates, also called for the arrest of individuals who caused the financial loss to the Union.
“If it’s true as per the audit report that these people caused the loss of our money, then they should be apprehended,” Aribobwe said.
“Our business has been paralysed for so long and our cooperative societies have not been working because we have no capital to use. The share capital is only in the book value but there is no money in the union,” he added.
However, Rueben Baingana the Union’s outgoing Treasurer and one of the individuals implicated by the audit report, denied causing any financial loss to the union and expressed doubt about the audit findings.
A Union on its knees
In an exclusive interview with theCooperator, Douson Mwijuka painted a grim picture of the dire straits in which the Banyankore Kweterana finds itself.
He revealed, for instance, that the Union has gone 10 months without receiving a single coffee bean from its frustrated member cooperatives.
”The Union does not have a single coin to buy coffee from the co-operators; instead it is filled with debts from different partners,” he said, adding:
”The external audit report found that Banyankore Kweterana has been losing over Shs 400m annually and the union has also been suspended from the free fair trade.”
Drowning in debt
It also emerged that Banyankore Kweterana is saddled with crippling debt that threatens the Union’s very existence.
Among others, the Union owes Shs 1.5bn to the Microfinance Support Centre (MSC); Shs 150m to the Uganda Central Co-operative Financial Services (UCCFS); share interest of over Shs 400m and members’ crop finance premium worth over Shs 270m.
In total, the Union has suffered a loss of Shs 2.3bn since January this year, to date.
Audit recommendations
Key among the audit’s recommendations to revive the union were: greater independence of the management from undue board interference; periodical stock reconciliation to ascertain the quantity of coffee transferred from the branches to the main office; reprimands for individuals involved in mismanagement of union according the cooperative’s laws.
“We recommend that further investigations of the union’s assets used as collateral in various financial institutions be carried out.”
Hope for recovery
Despite the rough past Banyankore Kweterana has endured, many, its creditors included, are optimistic that it can make a positive turnaround and restore its former glory.
Innocent Miraze Agaba, the Senior Strategy & Risk Officer, Microfinance Support Centre (MSC) noted that the financial services company is eager to continue its business relationship with Banyankore Kweterana Cooperative Union despite the debts the Union owes it.
“We have had a great history with Banyankore Kweterana for the last ten years, and we are still with you. As Microfinance Support Centre, we want to invest in Banyankore Kweterana once we have confidence that you also want to revive your union,” he said in his remarks at the meeting.
Miraze says the union needs to reorganise and get businesses running normally again.
“What can save the union now is to see business operations taking place: farmers bringing in coffee and being paid for it as you process the coffee to get money out of it,” he explained.
Unite to revive the Union
Emmanuel Natukunda, the newly elected Chairman of Banyankore Kweterana Cooperative Union pledged to engage all the member cooperative societies to work together in reviving the Union.
He appealed for unity among members if they are to achieve Banyankore Kweterana’s lofty goals for the future.
“I ask all the members to come and we work together such that we can restore the union’s business performance. We are not here to blame the past leadership but to forge a way forward of development and stability,” Natukunda said.
For his part, the outgoing Chairman Mwijuka says he is satisfied to hand over office having done his best to expose the challenges facing the Union, information that he believes the new leadership can use to steer Banyankore Kweterana forward.
“I have done certain things like showing the Union’s weaknesses especially in management and at the governance stage. Hopefully this will help resurrect it,” Mwijuka said.
He says that members made the right decision in electing a new governance body that will benefit the Union.
“I will be happy to hand over to the new management when the time comes,” he said.
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