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Robust reforms have revitalized co-operative sector in Kenya- President Kenyatta

NAIROBI-Kenyan President Uhuru Kenyatta has attributed the rapid growth of the cooperative sector in his country to the policy reforms the government has implemented since 2013.

The President noted that the reforms have helped the sector to play its rightful role towards the achievement of the Big Four Agenda pillars of manufacturing, food security and affordable housing.

“In manufacturing, my Administration has prioritised reforms for the revitalisation of various sub-sectors where cooperatives are involved in areas such as agro-processing and value addition in coffee, cotton and dairy to name but a few,” the President said.

Cooperators listening to President Kenyatta at the event to mark the International Day of Cooperatives in Nairobi on Saturday (Internet photo)

Kenyatta spoke on Saturday at the Kenyatta International Convention Centre where he led the country in celebrating the 100th International Co-operatives Day [Ushirika Day].

He cited the revival of the Kenya Planters Cooperative Union as one of fruits of the reforms that have directly benefitted coffee farmers.

“As part of this revitalisation programme, my administration incorporated the new Kenya Planters’ Cooperative Union Ltd [New KPCU] in 2019 after liquidation of the old KPCU, which was bedevilled by a myriad of challenges,” President Kenyatta said.

The Head of State said through the reforms the New KPCU was able to establish a Cherry Revolving Fund of Kshs 3 billion [about Ushs 95.5bln], institute a farm inputs subsidy programme of Kshs 1bn [about Ushs 31.8bln]as well as refurbish coffee drying tables.

He added that the new entity has also been able to provide sustainable solutions to thousands of coffee farmers through milling and marketing services, pointing out that the New KPCU has provided milling and marketing services to 236 cooperative societies and 92 coffee estates.

“The benefits of the New KPCU are already noticeable; the New KPCU charges farmers USD 40 per ton of milled coffee as compared to USD 65 per ton, charged for the same services by private millers. So far, the New KPCU has milled 1,828 tons of coffee,” President Kenyatta said.

The President said the reforms also helped to stabilize the dairy sub-sector through the modernization and expansion of the New Kenya Cooperative Creameries factories across the country, leading to steady growth in the number of dairy co-operatives.

“This initiative has had a positive social-economic impact in the dairy sector through the stabilization of milk prices at farmer and consumer levels, due to efficient processing and packaging capabilities. Moreover, with its increased processing capacity, the New KCC has been enabled to take up excess milk from farmers, thereby averting losses at farm level and providing a much-needed ready market for their produce,” he said.

On rice farming, President Kenyatta said the Government-led reforms saw the revival of the Kenya National Trading Corporation enabled the sector to increase production and ensured farmers have access to markets for their produce at competitive prices.

Other areas that benefitted from the co-operative sector reforms include the cotton industry where the Government is implementing recommendations of a task force geared towards revitalizing old and obsolete cotton cooperative ginneries as well as building new ones.

On Savings and Credit Cooperative Organisation [SACCOs], Kenyatta said the implementation of the Sacco Societies [Non-Deposit Taking Sacco Business] Regulations 2020 that commenced in January 2021 have helped to double the number of SACCOs under prudential regulation of Sacco Societies Regulatory Authority [SASRA] to 360.

“I note with appreciation that over the period 2014 to 2021, the SACCO industry has registered remarkable growth. In terms of membership, the number has risen from 3 million in 2014 to 5.5mln in 2021.

Kenyatta said apart from contributing to housing, education and many other things, cooperatives can be major players in the development of the country. “I do believe cooperatives can be major players in the development of our social infrastructure as well. There is no reason why cooperatives savings cannot be used to build roads,” he said, urging cooperatives to lend to the government.

The appetite to borrow from cooperatives comes after Kenya cancelled the sale of Shs 115bln [$982 million] Eurobond and will instead borrow from commercial banks after the Russia-Ukraine war caused yields to surge on international markets, local media reported.

Finance Minister Ukur Yatani told the Daily Nation and Business Daily newspapers that the bond was no longer feasible, blaming the conflict in Ukraine for pushing up interest rates and causing yields on Kenya’s previous Eurobond to double to 12 percent.

Cooperators matching to mark International Day of Cooperatives [Ushirika Day] in Nairobi on Saturday (Internet photo).
“Last year we borrowed at six per cent and now it stands over 12 per cent. This is no longer feasible. That’s why we’re still exploring options to look at a number of banks that can advance us the money at a cheaper rate,” Yatani told the Daily Nation.

Kenya’s Cabinet Secretary Peter Munya said SACCO movement in Kenya are the most vibrant in the world, holding 32 percent of the country’s savings and with an asset base of US$ 2.3 trn.

The cooperative Movement in Kenya has an asset base of Ksh 1.3 trn [Ushs 41.392 trn], Kshs 885bln [28.2trn] in savings and deposits and Ksh 860bln [Ushs 27.4trn]loan portifolio.

Meanwhile Kenyatta on Saturday said the country now has the necessary legal framework to facilitate cooperatives to grow, adding that it has reduced the theft of members’ savings by top managers.

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