The Ethics and Anti-Corruption Commission (EACC) has trained senior officials of agricultural-based cooperative societies on integrity and good governance in a bid to tame corruption.
EACC Commissioner Colonel (Rtd) Alfred Mushimba said the once insignificant co-operative movement, which was seen as a refuge for struggling smallholder farmers, has turned out to be the vehicle that has driven growth of the sub-sector.
“We have realized that the various offences related to governance issues are recurring every year. We are training them so that they don’t commit offences without knowing. Those who will repeat the same will have action taken against them,” he said.
Speaking at the Pyrethrum Processing Company of Kenya (PPCK) after inaugurating training for 57 officials of various cooperative societies drawn from across the 11 Sub-Counties, Mushimba said EACC was currently offering training and capacity building to officials of cooperatives in the areas of ethics, integrity, anti-corruption and good governance in seven counties.
“An assessment conducted by the Commission revealed that officials of cooperatives need specialized anti-corruption and ethics capacity building for purposes of entrenching good governance, mainstreaming anti-corruption, integrity and sealing corruption loopholes in their systems, policies and procedures of work at the institutional level,” the Commissioner added.
He observed that though agricultural oriented co-operatives were a key cog in the wheels of farming industry in Kenya, they also faced emerging challenges such as graft, fraudulent election of officials, poor management and irregular disposal of assets.
Col Mushimba indicated that EACC had signed a Memorandum of Understanding with the State Department for Cooperatives in 2018 to offer capacity building aimed at preventing corruption in the cooperative movement.
“If bad governance rears its ugly head in our agricultural-based cooperative societies, household incomes will plummet, food security and nutrition will be threatened while economic growth will be significantly slowed. In 2021, agriculture contributed 22.4 to Kenya’s Gross Domestic Product while accounting for 51 per cent of exports. The sector employs 60 per cent of Kenyans,” he observed.
According to the Commissioner, a cooperative society with accountable and transparent leadership would be able to reduce the cost of marketing farmer produce and enable farmers to realise higher returns through provision of a reliable and remunerative outlet for their products.
“As a result of our training partnership with cooperatives, many of them have grown to become industry giants who have extended their business beyond the primary role of marketing produce for small-holder farmers and ventured into provision of financial services,” said Col Mushimba.
In the past, there have been concerns over corruption and weak management structures of a number of co-operatives which leads to misappropriation of funds, poor business planning, unrealistic and conflicting goals and targets.
Col Mushimba indicated that good governance, the basic ingredient of a responsive and democratic structure, is premised upon, inter alia, participation, equity and inclusiveness and on accountability, responsiveness, transparency and consensus building.
The Commissioner stated that co-operatives hold over 40 per cent of the GDP and 35 per cent of total savings in the country, adding that if they are well managed they can easily change the country by distributing wealth to larger swathes of the population.
Nakuru County Director of Cooperatives Ms. Josephine Ngandu observed that with the sector holding 30 per cent of the national savings, it is one of the vehicles that could be employed in mobilizing resources for development and alleviation of poverty, particularly in the rural areas.
However, Ms. Ngandu regretted that the co-operative movement has been bedeviled by serious governance issues, which has resulted in members losing millions of shillings through theft by officials and imprudent investment decisions.
The Director expressed optimism that measures initiated by the government in recent years have started bearing fruits with leadership disputes reducing significantly.
Some of the measures include legislation, which demands that managers be trained in the management of co-operatives.
The co-operatives have also been restricted in their investment options, requiring them to maintain certain liquidity levels to increase lending to their members.
Ms. Ngandu noted that the County had enacted the Cooperative Revolving Development Fund Act to establish a revolving fund for cooperative societies.
“Nakuru has several cooperative societies and Small and Medium Enterprises (SMEs), most of which have folded due to lack of funds. The interest rates in most of the banks is very high, we offer affordable loans from this Revolving Development fund,” she said.
The fund is managed by a board and money borrowed by the entity must be approved by the Assembly.
The fund managers are required to conduct civic education to promote awareness and understanding of the operations of the fund among stakeholders.