A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. Its values are based on self-help, self-responsibility, democracy, equality, equity and solidarity. In the old tradition of cooperatives, members believe in the ethical values of honesty, openness, social responsibility and caring for others. Generally, activities of a cooperative society are being guided by the following key principles which are voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training and information, co-operation among co-operatives, concern for community.
Based on this concept, values and principles, many cooperatives societies in Nigeria have emerged as part of the key drivers of their local economy. The gap created at the Local Government administration in developing and implementing vibrant local economic development policies has created enormous responsibilities on the cooperative societies to ranked among major entities in driving the local economic development of their respective jurisdictions. Many have succeeded in mobilizing various population segments of their localities, economically empowering their members, transforming the livelihood of members and migrating many from low to higher income statuses.
In Lagos, which is the economic and commercial capital of Nigeria, several cooperative societies have played significant roles in the development of their local economy. Cooperative societies exist in the commercial capital in different types such as insurance cooperative, housing cooperative, cooperative farming, thrift and credit cooperative and marketing cooperative. They exist with different functions and orientation.
Majority of the over 12, 000 registered cooperative societies in Lagos have contributed to the local economy. They have shown considerable ability in realizing their objectives through granting of loan to members, procurement of bulk goods and distribution among members, mobilizing pool funding towards land acquisition and home ownership among members, operating single manufacturing convergence center for the use of members, and joint land cultivation among the agricultural cooperatives. All these efforts have led to noticeable changes in the livelihoods of individual members and consequential positive impacts on the local economic development. The Permanent Secretary of the Lagos State Ministry of Agriculture and Cooperatives during the 2011 International Cooperative Day disclosed that cooperative societies in Lagos State have invested over NGN40 billion (NGN1 is equivalent to USD0.0062) in various economic enterprises in the State. He further stated that cooperative’s economic enterprises such as fishing, trading, farming, processing, public service, housing, artisanal activities and transportation are the catalyst for the State’s economy development.
Similarly, the Office of the Secretary to the Imo State Government in October 2013 acknowledged that cooperative societies now provide veritable ground for the training of entrepreneurship and holistic transformation of the micro-economy of the communities where they operate in Imo State.
Among the cooperative societies that have successfully impacted on their local economy in the commercial city of Lagos are Honeywell Group Credit and Thrift Cooperative Society formed in 1989, Urban Housing Cooperative, Igbakode (Orimedu) Fishermen Cooperative and Multi-Purpose Society, Maroko Women Cooperative Multipurpose Society and NEPA Staff Credit and Thrift Cooperative Society.
Maroko Women Cooperative Multipurpose Society is a body aims at promoting unity and economically empowering Maroko women. The cooperative since establishment in 2010 has mobilized large members from its immediate community. While it has succeeded in mobilizing funding from members, its key achievement is the securing of grant from Social and Economic Rights Action Center (SERAC) and institutionalization of the grant into recycling loanable fund for members. Over 70 members have benefited from this fund in a three cycle. The attraction to the fund is the 10% interest rate per annum compared to 23% - 25% operating market rate in Nigeria. For example, a member who obtained a loan of NGN100, 000 (NGN1 is equivalent to USD0.0062) is expected to pay NGN110, 000 payable at the rate of NGN9, 200 per month in 12 installments.
The loan process created a tripartite partnership among SERAC who deposited the money in a bank, the local bank who opened account for members of the cooperative and credit their account in the amount approved and the cooperative society who supervise and monitor the repayment.
In addition to the loan, series of training were organized for members on loan utilization, business management and managing a vibrant cooperative society. The strategies have produced over 70 women, who have bank accounts in the community, informed women who keep records of business transactions and business expansion in the community. The cooperative is currently exploring option of land acquisition for the purpose of home ownership among members.
Despite the credible performance of many cooperative societies in Nigeria, many of them are still confronted with various endogenous and exogenous challenges. Some of the internal challenges include poor management structure, high expectations from members on financial assistance with little attention to other purposes of the cooperative society and sporadic repayment of loans taken by members. Externally, some of the problems are lack of access to formal land, deficit in social and economic enabling infrastructure such as roads, water and electricity, low government’s support initiatives and restricted training opportunities for leaders and members.
Contribution of cooperative societies to the local economy development in Nigeria is bound to improve if necessary steps are taken to reduce, if not eliminate, the outlined challenges.