Managers of Savings and Credit Cooperative Societies (SACCOs) in Sembabule district are calling for strict enforcement of governing regulations to combat multiple memberships in the districts’ SACCOs, saying it is stifling the SACCOs’ growth.
The district is home to at least 33 registered cooperative societies according to its framework paper, but many of them have barely been able to grow to their potential, says Daniel Kintu, the manager of Sembabule SACCO, one of the leading SACCOs in Sembabule Town Council.
Kintu attributes the minimal growth to people holding multiple memberships in several SACCOs – some with competing objectives, with a view of obtaining multiple loans which they later fail to pay back.
“Our observation is that these people registering with us do not do so necessarily to save. The majority are perennial borrowers with a poor repayment culture,” Kintu says.
He argues that as a result, the SACCOs are facing a problem of a high default rate on loans advanced out to their clients.
Now, Kintu says, through their umbrella body, SACCO managers are moving to stop the practice. He told theCooperator that they’re mooting for the full operationalization of the governing laws at the district and regional level to make it impossible for people to hold multiple memberships and take multiple loans in SACCOs.
Already, section 17 of the Cooperative Societies Act 1991, forbids any person to be a member of more than one registered society having the same or similar objects for avoidance of contradiction
But SACCOs have for long been reluctant to implement that particular clause of the law as they seek to maximize the benefits that come with many members.
Kintu says they now have no option. “Our SACCOs are not growing because of this practice,” he says, adding “It is high time we organized and undertook to verify our members and implement the law to the latter to stop the vice of multiple defaulters.”
Kintu’s concerns are shared by other SACCOs in the district. Hussein Tamuzadde, a board member of Mateete Saving society also told theCooperator that their SACCO faced a similar problem, noting that the high number of loan defaulters has forced their SACCO to raise interest rates on loans to make up for the bad loans.
SACCOs according to the Cooperative Societies’ Regulations of 1992, are member-founded microfinance institutions that run on member savings and tend to their financial needs through providing affordable credit.
Simon Peter Ddungu, the Sembabule District Commercial Officer told theCooperator that of late, his office had embarked on vigorous sensitization of cooperators to adhere to cooperative best practices as a way of supporting the growth of their SACCOs.
“These institutions are member-formed and member-owned, the members themselves are responsible of their sustainability. This is what we’re trying to remind cooperators,” he said.
MBALE: Mbale Mayor Hajji Zandya Mutwalib Mafabi has called upon the Government to ensure stronger regulations to guide the formation and operations of hundreds of Savings and Credit cooperative societies(SACCOs) springing up in the country.
Speaking in an interview with our reporter, Mafabi noted that although these SACCOs have been helpful in the economic empowerment of local communities, they need to be regulated to protect unsuspecting people from being taken advantage of, by unscrupulous individuals.
“They(SACCOs) have been of great help. But time and again, you hear stories of conmen who fleece ordinary people of their hard-earned monies through these schemes. We need to ensure close monitoring such that such cases don’t keep happening,” he said.
In an effort to compensate for the limited penetration of commercial banks and promote financial inclusion for rural communities, the government has in the recent past continued to encourage the formation of SACCOs in both rural and semi-urban areas.
In fact, during his 3-months wealth creation tour concluded this August, President Museveni went around the country encouraging citizens to form vocation-focused SACCOs which he promised to fund.
SACCOs are membership-based organizations whose core business is to encourage savings and enable easy access to credit for their members. The Members pull resources together in form of savings, and use the mobilized savings to extend small credit facilities to themselves through a formally registered micro-credit facility.
Legally, SACCOs are legal entities registered under the Uganda Cooperative Statute of 1991 and Cooperative Societies Regulations of 1992.
According to a study by the Uhuru Institute for Social Development, as of 2017/18, there were over 9000 financial cooperatives in the country, most of whom are SACCOs, and the number is estimated to have significantly increased since then.
In 2018, a Fin-Scope survey indicated that 42% Ugandans today are significantly more likely to borrow money from SACCOs to cover unforeseen expenses compared to commercial banks, underscoring the central place these financial societies have come to occupy in the economy.
But while these SACCOs have been of such positive impact in local communities, they have also been riddled with several cases of duplicity, with sometimes unscrupulous individuals fleecing unsuspecting members of the public under the guise of subscribing them to such financial cooperatives. Other times, managers and officials of the said SACCOs have run away with members’ savings, with the victims lucky to get any redress at all.
Mafabi says this needs to be checked. “Most times, my office receives cases of SACCOs who under the guise of providing the rural poor with financial services came, mobilized some money from the poor, and all of a sudden, disappeared,” he said.
The Mbale Mayor noted that with the Government’s latest push for SACCOs, these cases (of duplicity) are bound to increase, and the government needs to intervene.
“Presently, any member in the community can start a Sacco and go around mobilizing members to join him or her without necessarily seeking any form of authorization,” he says, adding, “This has to change. We must introduce policies that compel anyone or group starting a SACCO to ensure that they are registered, members well profiled especially those holding key leadership positions, before they are allowed to operationalize their activities.”
Mafabi is also concerned with other informal financial service providers who are equally barely regulated such as Village Savings and Loan Associations (VSLAs), rotating savings and credit associations (ROSCAs), community-based money lenders among others, which he says also portend great risk to savers.
Until 2017, the financial sector regulatory framework provided for tier one to tier three institutions leaving out SACCOs, which as seen above, interact most with especially low-income earners at the grassroots.
Now, under the amended law, SACCO Managers are required to have an amount of money in a commercial bank that’s worth the money they are going to handle in their SACCO to serve as security for members’ savings.
Even then, Henry Mbaguta, an Assistant Commissioner in the Financial Services Department of the Ministry of Finance, Planning and Economic Development says stronger regulations are needed.
“Effective regulation and supervision will ensure adequate compliance to the law and provide an important tool for financial inclusion,” he says.
However, the state Minister for Trade and Industry, Michael Werikhe is skeptical against over-regulating SACCOs, warning that doing so risks reversing already made gains: “It’s Government policy to encourage savings and SACCOs are so far doing a great job in this aspect. Over regulating them might discourage this very spirit we are trying to encourage among our people,” he said.
Silas Aogon, the Member of Parliament for Kumi Municipality, however, argues that regulations can be put in place that do not stifle the emergence and growth of SACCOs but make them more accountable. “It’s true we need some good gatekeeping in this area. The people who are suffering most are the ones in the villages. We can strengthen oversight of these SACCOs while being careful to not limit their growth,” he said.
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The National Coordinator of Operation Wealth Creation (OWC), Gen. Caleb Akandwanaho aka Salim Saleh has on several occasions asked a poignant question – Where is the farmer in in the value chain power relations?
Having had many adaptive hours and years of work and engagement with farmers and those who do business with them in Rwenzori region, West Nile, Luwero etc, Gen. Saleh evokes a historic question that has dominated discourse over human progress and advancement from pre-stone age, stone age – and from first to the forth industrial revolution that many elites and laggards are equally talking about these days.
This question of mediating producers power, the state and the market is at heart of 1944 Karl Polanyi’s work “The Great Transformation”, Peter Evans “Embedded Autonomy”, Adam Smith’s “The Wealth of Nations” and Maynard Keynes’ “The General Theory of Employment, Interest, and Money”.
My answer to this question is that farmers’ power in the value chain is equal to their level of organization. The non-organised and weakly organized farmers have no power at all in the value chain. The organized farmers have power to take a fair chunk of their sweat in the value chain.
But what is this animal called value chain and how can farmers govern it? A value chain is a set of linked activities that work to add value to a product; it consists of actors and actions that improve a product while linking commodity producers to processors and markets.
Let’s take an example of the coffee value chain. I pick coffee, because, it is the second largest valued commodity in international trade, and the most widely traded tropical commodity after petroleum. According to Mordor Intelligence world market report, global coffee market is growing at a compound annual growth rate of 5.5% during the forecast period (2019 – 2024). Coffee is one of the world’s favourite beverages and a major source of caffeine, coffee continues to be an essential factor in society’s daily routine.
Uganda is the 2nd largest exporter of coffee in Africa, coffee supports over 3.5 million families at all levels of the value chain especially for income security and contributes to between 20 – 30% of foreign exchange earnings. Coffee is essentially central to Uganda’s pathway to total prosperity.
The current state of coffee value chain (money for every value added on coffee) begins with researchers in Kintunzi and other National Agricultural Research Organisation (NARO) stations that develop coffee plant varieties; then to nursery operators who raise and supply seedlings to farmers.
The next value add is by farmers (smallholders and plantation farmers) who grow and harvest the coffee; and then inputs dealers, transporters, aggregators and primary processors of coffee (farmer associations, cooperatives, traders/middlemen and coffee processing entrepreneurs).
Further value add is by exporters and importers – and then the greatest – coffee roasters! Globally, roasters take 50% of the entire value of a coffee bean. With respect to coffee farmers, there has consistently been very little opportunity for value addition and farm incomes are highly dependent on yield and prices – not set by farmers themselves.
Powerful farmers and their associations can capture value from production to roasting. Organised farmers in cooperatives or some other form can source best inputs, deploy the best extension workers, grow and harvest the best coffee, have inbuilt capability to process, roast and export the coffee to niche’ markets.
The coffee roaster dynamic in the world is tough. For example, coffee roaster cartel in the Europe is powerful and getting around it to establish a competitive roaster business at heart of Europe has been frustrating and impossible for many pan-Africanists. They control the roaster business through big brands, banks, traceability rules, complex legal regime etc. However, there could be ways to go around them; One way is to set up in places like Turkey and China – targeting boutique coffee shops, small coffee outlets and deepen Uganda roasted brands. The reason is that these outlets don’t have capacity to off-take big volumes from historic roasters in Europe which makes them a niche market for Uganda to penetrate and generate brand royalty.
The foregoing approach can be further enhanced by third-party endorsement of Uganda coffee brand from global celebrities and brand ambassadors – preferably with global moral standing.
The other aspect would be for organized farmers backed by the government to leverage state institutions, export strategies, networks marinated by embassies to for example open speciality coffee outlets in all major cities of the world (from Beijing to New York etc), pull off joint venture agreements with established coffee brands like Starbucks, Nestle and student popular coffee places like Peets in Cambridge Massachusetts to roast coffee at home and abroad.
So, what is limiting this farmers power? First, we have mostly looked at farmers role in the value chain as that of only production. The strategy has been to replace old coffee trees (30 years old coffee trees indeed cannot give us 27 tons per hectare like in Brazil) – and to export 2o million bags. This is contextual forward thinking – but not optimal. We should be strategizing on how farmers can roast at home and export directly exclusively or in alliance with global brands. Then we can think of other opportunities we need to create, leverage to make this happen. As long as our mentality remains to produce – and others export – others roast; we are in circles for a long time. Let’s crush and disrupt this circle and begin again.
The business of government and leaders at all levels is not to form farmer groups but rather through awareness and targeted education programs stimulate farmer agency with resulting groups that mushroom organically. The most efficient way is to stimulate formation of coffee enterprise specific groups – and not generic farmers groups. Whereas bees are good for pollinating coffee – having bee keepers and coffee farmers in a room may not yield fruitful discussions and strategies to yield common objectives and actions.
For zoned coffee areas, at a village level (where things happen) lets’ have coffee farmer specific cooperatives that can graduate into coffee unions at sub county and district levels. With proliferated technology and electricity extensions I see all over the place, we indeed can roast our coffee in Nyeibingo, in Kebisoni and Ikuniro in Rujumbura etc. It’s time for farmers not to just be integrated in coffee value chain – but to organise and govern the value chain. That is where the power is located and we can find it.
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BUDAKA: The ministry of Trade, Industry, and Cooperatives has embarked on a program to revive the collapsing North Bukedi Cooperative Union [NBCU] by actively reviving all the dead primary societies which were formerly associated with the Union.
The Union Chairperson, Farouk Gundi said that during the meeting held on Oct 10, the registrar of cooperatives, Mr. Joseph William Kitandwe, resolved that the Union should revive all the silent primary societies, numbering about 75 in total.
“The roadmap has been drawn for the revival of all primary societies and a committee will be elected to see the plan through,” Gundi said, adding that once elected, the committee will have a representative from each primary society affiliated to the Union.
According to the roadmap a copy of which theCooperator has seen, the exercise will start on Oct 14 in Pallisa County, followed by Butebo, Budaka and Kibuku. “All the concerned parties have been informed about the pending elections. The exercise will be overseen by the cooperative officers from the ministry, commercial officers of the respective districts, and Union representatives,” Gundi said.
Through a circular from the registrar of cooperatives, all the stakeholders especially the former leadership committees of these (primary)societies have been asked to mobilize their members to attend these meetings dubbed special general meetings, in which new committee members will be elected.
North Bukedi Cooperative Union [NBCU] is one of the oldest traditional Cooperative Unions in Uganda. Others are Bugisu Cooperative Union, Masaba Cooperative Union, and Banyankole Kweterana Cooperative Union.
Prior to the late 80s, the Unions were providing employment to hundreds of farmers, offering scholarships to students, and engaging in other social support and development activities. But the proceeding political instability in the country saw the Union lose many of its assets, along with the decline of cotton production which was the mainstay of Bukedi sub-region.
In April, theCooperator reported how the Union was also choking on debt, following shs.500 million it borrowed from Housing Finance Bank in 2003 to construct the Union premises in Mbale but consequently failed to pay back.
But Gundi says the Union is now getting back on its feet. He said that the government had released Shs.1.2bn as part of the Union’s compensation for the damages suffered during the NRA bush-war, which it (the Union) had used to clear some of its outstanding debts.
“All the Union’s debts have now been cleared to zero,” says Gundi.
Cotton struggles hurt the Union
To date, Cotton production remains the leading economic activity in Bukedi, and fluctuations in its price inevitably affect the Union’s fortunes.
Gundi told theCooperator that as a result of persistent fall in the price of cotton, most farmers in the cotton-growing districts of greater Bukedi had lost the morale of cultivating the crop, rendering the ginneries redundant at a time when the union had acquired loans to offer incentives like purchase of pesticides, spray pumps to shore up production. He pointed out that ginneries had closed in Ladoto, Bulangira, Kibuku and Kakoro areas, all of which were affiliated to NBCU.
“NBSCU would have cleared its loan in time, were it not for the steep fall in cotton prices,” Gundi says.
But Mr. Arthur Wako Mboizi, a seasoned farmer and politician in the area told theCooperator that beyond the fall in the price of cotton, NBCU could have been a victim of maladministration.
“What has killed the Union is poor management,” he said, adding “To add salt to an injury, the managers (of the Union) went ahead to sell off the Union’s only viable and vibrant Iki-Iki ginnery, remaining with dormant ones.”
Speaking during the meeting, the state minister for cooperatives, Mr. Fred Ngobi Gume, said that the government believes in the philosophy of organizing through cooperatives and that it would systematically support the recovery of all cooperatives with recognizable memberships and influence.
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Mbarara – Members of Banyankole Kweterana Cooperative Union have dismissed their chairperson, Geoffrey Baingana, over abuse of his position and allegations of stifling the growth of the cooperative.
Baingana was also accused of influence peddling, conniving with company lawyers to cheat the company and failure to account for funds advanced to his office as well as authorising unclear expenditure.
Baingana was booted out following a special general meeting at the cooperative’s head office in Mbarara district at the weekend. The members elected Dawson Mwijuka as the new chairperson.
Sources indicate that the meeting, presided over by the registrar of cooperatives, also recommended that a special audit be conducted within two months to ascertain the expenditure and income of the union. Baingana had led the western district union chairperson since 2009.
Nelson Niwahebwa, the general manager for Banyankole Kweterana, said that the meeting, which was presided over by officials from the Trade and Industry ministry, was called after members filed a petition and demanded for a special general meeting.
He said that the ministry will make further inquiries and investigations into the matters that were raised by the members.
Baingana declined to comment on the matter, saying that the union management should be the one to comment since the actions are official.
Kieth Atuhaire, one of the members, told theCooperator that the deposed chairperson had resorted to running the union as a personal business and never wanted his decisions to be questioned, which was a challenge to development.
Participants from 95 countries from around the world have gathered in Kigali for the international cooperative conference that is discussing how to advance socio-economic development through the cooperative movement.
Over 1,000 participants are attending the conference that is being held under the theme “Laying the Foundations of a Peaceful Future: Cooperatives for Sustainable Development.”
The conference, which runs between October 14 and 17, is a platform for countries to learn best practices from each other how they can make cooperatives the future of business promotion, and job creation.
It is organised by the International Co-operative Alliance (ICA), in partnership and with inputs of members worldwide and under the auspices of the Government of the Republic of Rwanda and the European Commission.
Organisers say that the conference will be used as a platform to project the contribution and potential of the cooperative movement for sustainable and ethical development across the world.
It aims at sharing experiences between African states and their counterparts from other continents for sustainable and inclusive development.
Information from ICA shows that there are about three million cooperatives in the world and that they employ 280 million people representing 10 percent of the world’s working population.
Hosting the conference alone is proof of progress registered by Rwanda’s cooperative movement, said Prof. Jean Bosco Harelimana, Director General of Rwanda Cooperative Agency (RCA).
RCA is the institution charged with promoting and regulating the cooperatives sector in Rwanda.
With 124 years since ICA was created, he said, it is only for the second time such a biennial global conference has been held in Africa, adding that he first on the continent was held in South Africa in 2013.
“Hosting this conference implies the good governance that Rwandans have, but also the visionary leadership, and accountability,” Harelimana said.
In case any person misuses the assets of a cooperative, or use influence peddling is reported and held accountable, he indicated.
“Rwanda Cooperative Agency ensures accountability through monitoring the management of cooperatives, and always look for innovations to enable them perform better,” he said.
Visitors tour inside a mini exhibition that was showcasing how cooperatives performance.
Figures from RCA indicate that there are about 9,706 cooperatives in Rwanda with a share capital of more than Rwf47.8 billion. All the cooperatives count over five million members (comprising over 2.77 million men, and over 2.25 million women).
RCA says that cooperatives have been crucial in improving the welfare of Rwandans, citing the role Savings and Credit Cooperatives (SACCOs) have played in boosting financial inclusion in the country.
He said that through these SACCOs, over Rwf350 billion have been disbursed in loans to previously unbanked Rwandans which helped thousands of Rwandans – who were formerly – unbanked get finance to run different profitable businesses.
Supporting growth, job creation
Harelimana said that RCA is reinforcing entrepreneurship aspect through cooperatives such that they can provide jobs to the youth in the continued effort to reduce unemployment among young people.
“Our aim is to rally more youth to join cooperatives such as those dealing with agriculture, livestock, transport, handcraft, transport, services and mining, among others so that the youth get employment in those areas,” he said.
Dr. Claudine Uwera, the Minister of State for Economic Planning said that cooperatives have a great role in development, adding that this important conference is a learning platform for progress and more impact.
“Cooperatives help citizens to contribute to the achievement of countries’ development. There are countries where cooperatives have advanced, and they come to share experience with those which are lagging behind or still have challenges facing them so that they learn from them,” she said.
ICA President, Ariel Guarco said that there is no other way to achieve development.
The path of solidarity, of cooperation, of responsibility, of participation; the path of democracy and commitment to our people, our cultures and our environment, he said.
“There is no future without cooperation. There is no sustainable development if we do not choose business models that put people’s dignity first.”
Nicola Bellomo, the EU Ambassador to Rwanda said that different stakeholders convened in Kigali in line with a shared belief in the importance of the cooperative movement as a driver of development.
Because of the overall structure of cooperatives, Bellomo said, this model has proved to be a reliable people-centred mechanism which has enabled people around the world to take control of their livelihoods and improve their wellbeing.
“Supporting the growth of cooperatives is a worldwide effort with a guaranteed return on investment. This is because cooperatives empower people and local communities to take charge of their own development, putting people first, putting people before profit,” he observed.
“EU and its Member States remains at the forefront in proactively engaging and supporting cooperatives in Africa – Rwanda is a great example of this partnership,” he remarked.
Why cooperative movement matters
According to ICA, cooperatives differ from other enterprises in that they pursue economic and social goals indissociably from one another, and in that they are primarily inspired by citizens’ concerns and realities on the ground, in their own communities.
In addition to their acute understanding of the problems people face, they are characterised by democratic and participatory governance, through which they implement their action based on the values of self-help, self-reliance, democracy, equality, equity and solidarity. These cooperative values and principles are the heart of the identity and management of cooperatives.
By placing each person above any other value, the cooperative movement can break up the narrow frames of alienating industrialisation and provide agency to the anonymous person.
The rapid deterioration of the planet – due to deforestation, soil erosion, climate change, demography, food chain imbalances, social inequalities, water supply, energy, urbanization, biodiversity, etc. – are grave challenges and have increased the awareness of citizens and institutions, ICA says.
Dr Vandana Shiva, an Indian Scientist and environmentalist, who is also a Board member of the International Forum on Globalisation (IGF), said that “the cooperative movement is actually following the laws of nature, the laws of justice, it is following the laws of humanity,” referring to inequalities that are brought about by inequalities in the world.
“With seven billion people on this planet, with [a few] billionaires on the other side, this is a sad story for the future. Yours is the real story for the future, cooperatives are the future,” she said as she addressed hundreds of participants in the conference.
By signing a framework partnership agreement with the International Cooperative Alliance (March 2016), ICA stated that the European Commission has, for its part, recognised that cooperative enterprises and the cooperative movement can strengthen and revitalise the global partnership for sustainable development. (Source/ The New Times)
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Kampala, Uganda: Traders under the Kampala Arcaders and Traders Association (KATA) have challenged President Museveni to sign the Landlord and Tenant Bill into law, or risk losing the next general elections in 2021.
Speaking during the KATA general assembly held at JBK hotel in Kampala, the traders called upon the President to resist overtures from landlords and sign the Bill into law, or risk backlash from them come 2021.
“We understand that the landlords met with the president requesting him not to sign the bill. The president will have to decide either to be elected by one landlord or the many tenants (traders),” said Godfrey Katongole, the KATA Chairperson.
Katongole argued that for long, traders have been oppressed from all sides, from their landlords to Uganda Revenue Authority and Uganda National Bureau of Standards, who he said in addition to charging them high taxes, routinely arrest traders and confiscate their goods considered substandard, oftentimes after they’re already cleared and taxed by the government.
“The president is mistaken to think that people in Kampala don’t like him. What they don’t like are the people in his government who oppress traders, provoking disaffection for his government,” Katongole argued.
He said that in the Landlord and Tenant Bill, the government has an opportunity to finally do something for traders. The Bill was passed by Parliament in June this year amidst protestations from landlords.
Under the proposed law, owners of arcades and other commercial buildings will no longer be allowed to charge rent in dollars as has been the case, with the currency of payment strictly limited to Uganda Shillings. The law also barrs from increasing rent of a property by more than 10% in a single year and requires them to give tenants six months’ notice before eviction, in the event of the latter defaulting on payment of rent.
At the General Meeting held on Tuesday, members of KATA officially launched a financial cooperative – Kampala Traders Cooperative Savings and Credit Society Limited. The cooperative has been in existence for the last six months, and already has 500 members.
The launch was presided over by Mangusho Lawrence Cherop, the Member of Parliament for Kween County and vice chairperson of Uganda parliamentary sectoral committee on trade, tourism and industry, who represented the Speaker of Parliament.
Adressing the traders, Mangusho called upon them to first exhaust all avenues for peaceful settlement of their outstanding issues, before considering radical alternatives. “I’m glad I am here,” he said, adding “I recommend that you come up with a petition. I will help you deliver it to the Speaker, who I am confident will handle your issues swiftly.”
On his part, Charles Nsambu, the Chairperson Zebra House, one of the arcades in the city center cautioned city traders against the temptation to mix the activities of KATA (the association) from the SAACO, if the new cooperative is to succeed. He also advised the leaders of the newly launched cooperative to consider constructing business premises for its members to enable them escape the “rent-trap.”
“Most of these buildings in town are owned by people who constructed using borrowed money,” he said, adding, “If KATA could also borrow and build, it would save her members and traders from running battles with landlords.”
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Nearly 200 farmers in Lamwo district are threatening to quit their cooperative society – Agoro Cooperative Society in Agoro Sub County for failure to secure for them market for their produce.
The farmers who are predominantly engaged in fish, vegetable and cereal farming accuse their leaders of not doing enough to find reliable markets – one of the main reasons for starting the cooperative, leaving them at the mercy of unscrupulous middlemen.
Suzan Acio, a vegetable farmer in Agoro sub-county told theCooperator that the cooperative has failed to mobilize farmers into collective marketing, leaving them to fend for themselves against several obstacles.
“It’s now upon us farmers to travel with our produce to markets far away to look for buyers. We lose a lot every season especially we who deal in perishables like vegetables. So we are forced to sell cheaply as if we do not belong to a cooperative,” she said.
Ismail Ogak, the chairperson of Agoro vegetable growers under Agoro Cooperative told theCooperator that a bucket of tomatoes is now going for a paltry Shs. 1000, while as many as 10 cabbages go at a mere shs.2000. “This is because if we don’t sell, they will rot,” he lamented!
Joachim Opira, another farmer growing maize and rice in the sub-county said the cooperative has only provided them a store to keep their produce, but has done very little to source for them markets.
When contacted, Moses Olweny, the vice-chairperson Agoro cooperative society refuted suggestions that the cooperative was not being helpful to farmers. He said the challenge they face as a cooperative in finding reliable markets for their members’ produce is that the farmers don’t produce in large quantities to sustain the market, while for others, their produce is often of low quality.
He said the cooperative was moving to set up a common bulking center for farmers, from which they can collect all their members’ produce and sell at ago.
“Farmers have to ensure that the quality of their products is beyond reproach, and bulk their products in a common store, because the bigger the quantity of produce, the easier it is to find market.,” Olweny said.
Currently, Agoro Cooperative Society boasts of close to two hundred members, who jointly farm over 1,650 acres of land.
Lwengo. The State Minister for Microfinance Haruna Kyeyune has ordered for the immediate suspension of Vincent Kaitana, the board chairperson of Kyazanga Kwegatta Savings and Credit Society Limited, over allegation of abuse of office and possible fraud. The minister also ordered a special audit into the accounts of the SACCO after members expressed fear of financial mismanagement. The directive follows a petition by the SACCO members and three of its board members to the minister. Kaitana is accused of abuse of office and causing division within management by working with a clique to undermine set financial procedures. The member also accused Kaitana of failing to conduct regular Annual General Meetings, hence running the SACCO without approved work-plan and budgets. The members noted in their petition to the minister that Kaitana has held the position of chairperson of the SACCO since its establishment in 2000 and continues to rejected calls for fresh elections. It is against this background that the minister on Friday, called for an extraordinary meeting of the society members to try and solve concerns raised. However, at the meeting, the members expressed fear of possible collusion between the board and management to defraud the SACCO, prompting the minister to ask for audit reports but this too was missing. This prompted the minister to order for a financial audit. He also ordered the immediate suspension of Kaitana and instructed the District Commercial Officer Wilson Kagumire, to temporarily take charge of the society pending investigations. “The regulations require that someone can only serve for two terms of four years each. All the reports that will be compiled thereafter will find him out of the office and later the AGM should convene to elect new leaders,” said the State Minister for Microfinance Haruna Kyeyune. However, Vincent Kaitana denied allegations raised by the members against him. He told theCooperator that “there is no way the Society could be mismanaged without the direct intervention of the local authorities, who still hold his leadership in high regard.” Kyazanga Kwegatta Savings and Credit Society Limited has a membership of 5,580 and a share capital of Shs13 billion.
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Nairobi, Kenya: Uganda Revenue Authority Commissioner General Doris Akol has appealed to tax bodies across the region to cooperate in devising ways of ensuring that virtual foreign firms pay their fair share of taxes, arguing that it was not fair for these firms to make so much money from local economies without paying tax.
Akol, who was speaking at the 7th Pan African Conference on Illicit Financial Flows in the Kenyan Capital, Nairobi last week, noted that enforcing tax compliance of these companies was difficult because tax authorities are still trying to define where taxable value is added in the digital economy.
“It is difficult to identify who is the creator of the value, or who is its beneficiary. This is where we need to draw lines – deciding the creator of value from its beneficiary and who of the tow should be taxed,” she said.
Akol, however, argued that African tax bodies would no longer tolerate the excuse of the absence of permanent residence of these companies as a reprieve from tax.
“We need to move beyond what we know and start thinking about identifying new parameters if we are to tax digital companies operating in our countries. This means that we must start taking data seriously and harnessing it for that purpose,” she said.
The conference organized under the theme; “Taxing Intangibles, Financial Technology (FinTech) and the Digitalised Economy” sought to explore emerging economic trends and opportunities for domestic revenue mobilization in Africa, and drew close to 1,000 delegates over the course of 3 days.
Giving the example of companies like Uber, Amazon, and Facebook, the URA boss said “You find that payments are being paid in servers in Thailand, and goods dropped by drones in South Africa. We need to think fast on how best to handle these new dynamics in global transactions.”
Re-echoing Akol’s remarks, Jane Nalunga, the Director for South and Eastern Africa Trade Information and Negotiation Institute (SEATINI) Uganda country office also noted that with the globalization and digitization of business processes, tax administration was becoming ever more difficult, and that tax bodies need to cooperate to cope.
“There has always been tax evasion and tax avoidance, but the situation is getting worse with the advent of the digital economy. Now it’s a continental emergency and we must get together as a continent to build capacity to plug the leakages,” she said.
In 2016, a committee led by former South African President Thabo Mbeki found that Africa loses approximately $50billion in illicit financial flows from the continent, largely through tax evasion and avoidance in form of transfer pricing, use of tax havens and off-shore banking. The same committee estimated that the continent could have lost nearly $1trillion dollars in such illicit financial flows, over the last 50 years.
“Unless we address this ‘bleeding’ as a continent, we shall remain stuck,” said Alvin Musioma, the Executive Director Tax Justice Network Africa(TJNA).
However, Logan Wort, the Executive Secretary of African Tax Administration Forum (ATAF) warned participants against the rush to tax the digital economy, noting that crippling taxes risked stifling its growth, yet it portends immense opportunities for the continent.
In July 2018, the Government of Uganda instituted a tax on over the top services, by which each person was required to pay shs.200 per day to access platforms like Whatsapp, Facebook, and Twitter.
However, three months after the introduction of the tax, the Communications regulator Uganda Communications Commission noted that not only had the government failed to hit its revenue targets from the tax, the tax had also led to a reduction in Uganda’s internet users by nearly 3million people.
“We need to think perhaps how African Governments can charge VAT or withholding tax on parent companies of these services like Uber, Facebook, and the like,” says Logan.
He noted that while Africa is represented by about 24 countries on the (OECD), they hardly say anything when there. “The question is, as a continent, what is the tax margin that we are capable of collecting from this emerging global industry,” he asked. “There is a need to purposefully regulate digitalization so that we enable domestic businesses to compete with international companies,” he added.
More about PAC
The Pan African Conference on Illicit Financial flows(IFFs) and Taxation is an annual event that brings together key stakeholders involved in efforts to curb IFFs and enhance domestic resource mobilization in Africa. The platform draws together actors from governments, civil society, international organizations, legislators, media, academia, and national campaigners to take stock of the current state of IFFs’ in Africa as well as progress made through global, regional and country-level initiatives to combat them.
This year’s conference was jointly organized by the African Tax Administration Forum, the United Nations Economic Commission for Africa and the Pan African Lawyers Union. Others are The African Forum and Network on Debt and Development, Financial Transparency Coalition, Global Alliance for Tax Justice, Action Aid, Oxfam, Coalition for Dialogue on Africa and Trust Africa.
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