April 15, 2021

Bank of Sierra Leone concerned over unregistered cooperative organizations

4 min read
The Bank of Sierra Leone (BSL) has called for the harmonization of legislations relating to the cooperative sector as a way of ensuring proper coordination and regulation of the activities of cooperative organizations in the country.

By Kemo Cham

The Bank of Sierra Leone (BSL) has called for the harmonization of legislations relating to the cooperative sector as a way of ensuring proper coordination and regulation of the activities of cooperative organizations in the country. 

A representative of the Bank told stakeholders in the cooperative sector that failure by organizations to register with it constituted a major concern for the financial regulator. Esther Johnson said 

The failure to register makes it impossible for the Bank to coordinate the activities of Credit Unions in particular, which fall under its purview. She was speaking at a workshop convened to validate the first National Cooperative Policy, last week. 

The workshop, which was held at the Ministry of Trade and Industry’s Conference Hall at Youyi Building in Freetown, was attended by leaders in the cooperative industry, as well as officials of the ministry and other relevant local and international development agencies.

Officials say the new draft policy is part of efforts to revive the sector which has been dormant for over a decade now, leading to the reduction in the number of cooperative organizations in the country.

Cooperative societies are voluntary organizations formed to represent the interest of their members who engage in a particular trade or profession. Examples of cooperative societies include mining, housing, fishing, arts and crafts, and transportation cooperative unions.

As of August 2020, there were 582 cooperative organizations in Sierra Leone, data from the Cooperative Department in the Ministry of Trade show. That number, according to officials, is a drastic reduction of what it used to be over a decade ago, when there were over 2000 organizations.

The sector lost its relevance over the years due to numerous factors, notably lack of purpose within the organizations, lack of finance, lack of capacity, as well as the effect of the (1991-2002) civil war, the 2014-2016 Ebola epidemic, climate factors and now Covid-19, according to Newton Martin, Acting Registrar of the Department of Cooperatives. 

Mr Martin said despite its woes, the sector makes a substantial contribution to Sierra Leone’s economy, arguing that the assets and contributions of the individual societies run in billions of Leones. 

“If properly managed, cooperatives can play a great role in solving of the socioeconomic problems facing the country,” he stated. 

Officials hope that the new policy will pave the way for the review of the 1977 Cooperative Act, the first and only existing law governing the sector in the country. They add that the outdatedness of the law is a major part of the reason for the near death of the sector. 

Khadijatu Barrie, National Coordinator of the International Trade Center (ITC), a UN agency that promotes the internationalization of Small and Medium Sized businesses in the developing world, which has been collaborating on the policy review process, called for gender inclusivity. Ms Barrie told the workshop that the protection of the rights of women and youths in the policy is important because the two demographic categories are key drivers in national development. She noted that women in particular are very active in cooperative societies, yet they tend to have little voice in decision making. 

Barrie goe4s on to say that that massive sensitization of the policy would be needed to popularize it in the public for its effective implementation.

The policy draft policy is reported to have been in the making since 2013. 

Dr Edward Hinga Sandy, Minister of Trade and Industry, presided over the opening ceremony of validation workshop. He told the participants in his keynote address on Thursday that the introduction of a policy for the cooperative sector is important in the context of the government’s Medium Term National Development Plan. He noted that the role of Cooperatives is well captured in the national development blueprint, as was articulated at its launch by President Julius Maada Bio.

Dr Sandi said the policy is important in that it promote entrepreneurship, which is a sure way to guarantying the livelihoods of the people. He also said that the policy is important because it seeks to encourage more local production, thereby cutting down on the country’s dependence on imported goods.

“We consume too much that is produced from outside,” the minister said, adding that a policy and eventually a legislation will be crucial to put in check exploitative investors who have contributed to the underperformance of the agricultural sector.

The opening ceremony was chaired by Augustine Sheku, Permanent Secretary in the Ministry of Trade. He said that the move to formulate a policy for the cooperative sector is a demonstration of the government’s commitment to improve on the livelihoods of its people.

“Cooperate societies have been moribund, but they are very key in the development of the sector,” he said, noting that that’s why the ministry deemed it fit to meet with stakeholders instead of sitting in their offices and develop the policy.

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