Dr Nelson Kuria, the former CEO of CIC Insurance Group, has been appointed to draft the new National Co-operatives policy paper. If approved by Cabinet, the policy paper will be presented to parliament, opening an opportunity for Kenya to review the laws governing the Ksh 1 trillion co-operatives sector, considered the largest in Africa.
The Cabinet Secretary in charge of the co-operatives docket has also appointed prominent personalities within the cooperatives sector to prepare the new policy document that will anchor a review of Cap 490 of the Co-operatives Act. Drafters of Kenya’s constitution pushed the old Co-operatives Act to transitional arrangements that were to be dealt with once the new laws became operational, but that has not happened.
While a new policy document was agreed on and validated, infighting within Cabinet and Parliament has rendered the document worthless and is gathering dust at the offices of Cabinet Secretary, Mr Peter Munya.
The taskforce, whose members were published in the Kenya gazette on 18th December 2020, includes 14 other members who include Prof. Esther Gicheru, Geoffrey Njangombe – acting Commissioner for Co-operatives, Francis Kamande (NACHU), Jeremiah Were ( SASRA), Mercy Njeru (KUSCCO), Eliud Nzola ( Co-operative Bank), David Obonyo Senior Commissioner at the State Department for Co-operatives and Mrs Joyce Nkirote.
Top executives and directors of co-operative societies are having mixed reactions over changes that will affect the industry once the Co-operatives Act, Cap 490- laws that have governed operations in this sector over the past 15 years, is repealed.
While the Fourth Schedule of the 2010 Constitution of Kenya assigns the management of Co-operative Societies to the County Governments, there are no legal or policy instruments to operationalize this requirement.
While the original draft policy proposed that a term limit be inserted in law to stop directors from overstaying on the board of their societies, stiff resistance from the industry forced the state to knock off this proposal.
Bigwigs in the industry have argued that co-operative societies are private entities that serve the interest of their members. These societies are self-regulated and thus issues to do with how long elected directors can stay in office are not matters that can be regulated as a matter of policy.
Once Kuria’s team comes up with a fresh policy paper that gets Cabinet nod, the CS will introduce a sessional paper in Parliament which then triggers a review of Cap 490.
Sources say the Council of Governors has been lobbying to be given more control of co-operative societies, including registration of new societies and their supervision.
While the Constitution states that County Governments are responsible for the development and regulation of cooperatives, which include training and promotion, the law is yet to be fully operationalized to enable counties to take up this rule.