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‘Revival of cooperatives underway’

by Lesotho Times
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By Letuka Chafotsa

MASERU – The Deputy Minister of Trade and Industry, Cooperatives and Marketing, Maliehe Prince Maliehe, says government plans to revive cooperatives as part of measures to create employment.

“Cooperatives can be an effective way for people to exert control on their livelihoods since they play an increasingly important role in facilitating job-creation, economic-growth and social-development,” Maliehe told the Lesotho Times last week.

According to Maliehe, the ministry decided on Rwanda after discovering similarities between the two countries at an international cooperatives seminar held in Cape Town, South Africa, in November last year.

Maliehe said the Rwandan cooperatives management and administration was advanced with cooperatives in that country contributing “meaningfully” to the Gross Domestic Product (GDP). GDP is the market value of all officially recognised final goods and services produced within a country in a year.

The deputy minister added to be effective and successful, a cooperative must continuously achieve two inter-related goals which include “enhancing viability and improving ability to service its members and remain an economically-viable, innovative and competitive enterprise”.

“Cooperatives are formed to meet people’s mutual needs; they are based on the powerful idea that together, a group of people can achieve goals that none of them would achieve alone,” said Maliehe.

He further said the tour revealed Rwandan cooperatives are not run by the ministry of trade but an autonomous body called the Rwanda Cooperatives Agency, which however, operates under specific government guidelines.

“We learned that way, cooperatives are run more efficiently and effectively. Government should support the cooperatives to ensure the achievement of sustained employment and create an enabling environment for accessibility of funds.”

From the study tour, Maliehe said the Lesotho delegations also learned the Savings and Credit Cooperatives (SACCOs) or Credit Union can be crucial in stimulating wealth, thereby contributing to a country’s GDP.

SACCOs are unique, democratic, member-driven self-help cooperatives which are owned, governed and managed by members who have a common bond.

Maliehe said co-ops have several advantages hence government’s intention to form a cooperatives policy in the 2014/2015 financial year.

“Members provide the capital and are, therefore, more closely involved and have a long-term vision for the enterprise.”

Maliehe further said cooperatives can also access funds through micro-financing and not necessarily rely on regular banks all the time.

“Microfinance is one such concept that gives the masses and underprivileged section of society access to business opportunities”, he said.

The importance of micro-finance was earlier this year emphasised by economic experts at the Financial Sector Development Strategy (FSDS) launch, to be pivotal in accessibility of funds to ease funding of new businesses.

The Central Bank of Lesotho would implement the (FSDS), which advocates the establishment of micro-finances to deepen financial-inclusion and accessibility.

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