Cooperatives can provide a better economic future

BY 2050, one out of every four people will be African. Africa will have about 2.37 billion people, half of whom will be under 25 years of age. They should constitute a major source of productive, creative energy. They should be capable of producing products and services for themselves and the world. However, they are not likely to be doing so.

Around 60 per cent of Africa’s school aged youth will not be enrolled in school, and around 60 per cent of the youth will be unemployed, with the majority being female.

As adults, these young people, especially the females, will be either underemployed or unemployed. How will they get the knowledge, skills, and opportunities to function effectively in the Fourth Industrial Revolution?

And yet the value of Africa’s economic output is expected to grow in future decades. Many of the world’s fastest growing economies are and will be African. But given these disappointing figures on education, as well as the prevailing development model, this growth is likely to result in high levels of inequality and dependent development.

On the one hand, we may distinguish between cooperatives as associations that exist to increase their members’ bargaining power as buyers or sellers. For example, these may be farmers associating to buy inputs, or sell their produce together, or they may be individuals associating to consume some goods or services together in, for example, credit unions, cooperative shops and housing associations.

On the other hand, we can identify cooperatives as being unions – or a coming together – of individuals in producer or worker cooperatives to form a business and thereby simultaneously create their own employment and capacity to produce goods and services.

Some theorists hold that in developing economies, having more producer cooperatives can have several benefits. These include more national businesses being established, greater production of what nationals eat, drink, wear, listen to, live in, and watch. In short, a stronger national culture.

This, in addition to greater environmental sustainability, employment, investment, and development of science and technology. Finally, by increasing the capacity of the economy to provide for national needs and wants, the demand for foreign currency to purchase imports should fall. The status of the local currency and the balance of payments should benefit as a result.

All cooperatives are based on the principle of one-person, one vote and therefore embed the economy in democracy, which should reduce the contradiction between an economic system based on wealth, (one person, many votes and the many people, no vote) and a political system based on one person, one vote.

Africans are considered by many to have a collective disposition, evidenced by rural systems of reciprocal labour for harvesting, house building, implement usage, and novel forms of social insurance. African collective modes of financing have become famous the world over.

Yet there is also in Africa an appetite for accumulation through private property, which is done within the context of our very own entrenched systems of authority and hierarchy underpinned by age, patriarchy, semi-feudal relations and ethnicity.

Meanwhile in the workplace, the few are used to giving orders, and the many to taking them. And yet (or because) there is an appetite for more democracy.

Even as some African leaders claim to be building democratic societies based on the principles of free association and free speech of their citizens, many of the same citizens regard their government’s behaviour as excessively controlling and authoritarian.

Africa needs to overcome the distortions imposed on its economy by the centuries of enslavement and export of its human capital, followed by colonialism and now extended by neo-colonialism. Developing African economies places an existential responsibility on leaders to redress the historical distortions, as a necessary condition for improving the standard of living of citizens.

However, many African leaders compete with one another, instead of joining forces to transform their economies from outward-looking and dependent to Africa-looking and inter-dependent. Many local industries as well as state budgets have thereby been sacrificed on the altar of so-called free trade and globalisation.

Development should seek to overcome the distortions of history, through industrialisation based on the rapid development of science and technology from within, supplemented by knowledge from outside. The proposition is that an economy with a significant number of producer cooperatives will help achieve this.

The African Continental Free Trade Area, set up to facilitate trade between African countries, will most likely initially benefit foreign enterprises which will now be able to extend their operations across Africa’s colonially established internal borders. Meanwhile local companies are facing great difficulty establishing continental networks, not least the ability to remit revenues across borders without involving foreign currencies.

By 2019, out of 1.3 billion people in Africa, 91 million, or seven per cent of the population, were members of cooperatives. However, the global figure is about 12 per cent. Nevertheless, by 2015, cooperatives had created an estimated 5.1 million jobs on the continent.

But Africa’s cooperatives tend to be small. Most cooperatives are associations for joint procurement, marketing, housing, or financing. Few are businesses to provide self-employment and opportunities for production.

Soon after independence, governments established cooperative monopolies to purchase farmers’ produce. Farmers soon became aware of the (unexplained) differential between the prices they received and the foreign currency equivalent the country received.

During the period of neoliberal ascendancy in the 1980s, governments withdrew from, and then liberalised, rural markets. Cooperatives and the rural population went through difficult times, but between 2005 and 2008 there was an uptick in cooperative numbers in Africa.

Nevertheless, there is widespread national level. Nor are the cooperatives as autonomous as they should be.

Also, the bulk of the people trained in cooperative affairs are not the actual cooperators, but instead staff of the government departments regulating cooperatives. Those school leavers who are trained are not provided with enough of the support they would need to set up their own cooperative businesses.

Cooperation Africa is a civil society initiative to encourage and support cooperatives in Africa and its Diaspora. Its founding members are businesspeople, academics, and activists.

Our vision is: “A vast network of cooperative enterprises providing Africans with secure livelihoods and high standards of living and wellbeing.” ignorance of the producer cooperative model across the continent. The idea of people pooling their resources and working together in a business owned by them all is not the default idea of a business on our continent.

Recent studies have pointed out that African cooperatives do not have strong networks from the grassroots to the

The first phase in our plan is to build a membership organisation of likeminded people. In the second, we will encourage members to join, or establish, cooperative financing bodies, in which they will be able to invest. Finally, these cooperative financing institutions will support cooperative formation and development.