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Reflections on “What Capital is Missing in African Cooperatives?”

By, Kristin Wilcox, Global Communities, Technical Specialist, Cooperative Enterprise and Inclusive Business

This blog has been adapted from Ms. Wilcox’s remarks as a respondent on Dr. Nicola Francesconi’s paper commissioned by OCDC Research Group and OXFAM UK.

The lack of managerial capital, or management strategies, is a complex issue present in the development of co-operatives. Why this continues to be the case when so many resources are available in ‘cooperative development’ is a question that is very pertinent now. As an implementer, I cannot comment on African cooperatives, but rather a sub sector of East Africa and Mongolia – it has been my privilege to work alongside cooperatives there for the past 7 years. My observation is that if farmers are supposed to be good at something, it should be farming. I expect that:

• Becoming part of a farmer group or cooperative asks farmers primarily to go from a mindset of agriculture to agribusiness.
• Farmers become part of a team of decision makers when previously they have worked alone.
• They are asked to create business plans to dictate their future when their lives before were dictated by rainy seasons and pest migrations.
• They are asked to defer payment for their own production on the promise of something better to come without necessarily having the knowledge of whether than can financially cope at the household level.

As implementing partners, we expect farmers to become better managers – but I also wonder if perhaps we should better manage our expectations? Development practitioners are often guilty of ‘preparing for the last war’ as it were by relying on lessons learned and project impact assessments – using these lessons to design newer projects. It’s more complicated than that. . Where and how can management improvements be realized? Are they as critical to success as some research indicates?

If we reflect on the measurements that we have for cooperatives, under the Cooperative Development Program, it is apparent that what is valued is financial and patronage ratios. It’s also apparent that we value gender equity, enhanced cooperative legislation, and access to finance. These measurements reflect a pursuit for holistic impact. There is an argument to be made that because we have so many program targets, we are kept from hitting the target of well managed cooperatives. It is argued that the management strategies themselves, when properly invested in and made manifest, could have the effect of creating the demand for (or even peer pressure to legislate toward) better education in cooperative management, which will lead to better management in the long run. Is it really that simple?

Anecdotally, I can attest that when I worked in Uganda and facilitated the Ugandan Cooperative Stakeholders Forum, it was evident that there was frustration with the lack of cooperative oriented managers in the market place. Participants in the forum clearly emphasized that MBAs and other business administration programs did not have any emphasis on cooperatives. Likewise, the cooperative college curricula did not focus on business management and administration, thus creating a large gap in the marketplace.
I would be interested to see further research into understanding whether there are positive or negative relationships when increasing cooperative management strategies vis-a-vis the levels of social capital present. While some evidence shows economic returns for members increasing dramatically for each dollar spent on management, I wonder if there are also perverse incentives when enhancing management strategies at the expense of social capital. If better strategies were needed, often a solution within local cultures is usually found. However, in cooperatives as in life, you don’t know what you don’t know, and so the cycle continues.

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