Cooperative Societies And Economic Development

Project and Seminar Material for Economics

Abstract

This research work is titled, “cooperative society and economic development, a case study of Udi local government area of Enugu state. The population of the study was 200 respondents. The instrument for the data collection was structured questionnaire developed by the researchers. Frequency and percentages were used to answer the research questions. The findings of the study also revealed that the major setbacks in establishing and running co-operative societies are lack of appropriate leadership and suitable management control. From the findings of the study, it was recommended that cooperative societies in Nigeria should make optimum use of all resources and strive continuously to enhance productivity of resources; ensure highest efficiency while providing services to members; improve management capabilities and competencies through effective organizational designs and structures; mobilize capital and as well set greater stress on internal capital formation and accumulation. The study also recommended that the government should contribute significantly to improve cooperative performance by facilitating access of cooperatives support services and their human resource development.

Chapter One

Introduction

1.1 Background of the Study

The International Cooperative Alliance (ICA) in its Statement on the Cooperate Identity, in 1995, defines a cooperative as “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.” It is a business voluntarily owned and controlled by its member patrons and operated for them and by them on a nonprofit or cost basis (UWCC, 2002). It is a business enterprise that aims at complete identity of the component factors of ownership, control and use of service, three distinct features that differentiate cooperatives from other businesses (Laidlaw, 1974).

The history of cooperative societies in Nigeria in particular cannot go without reference to the pioneering efforts of great men such as C. F. Strickland, Major F. G. Haig. Captain W. J. W. Chessman, Captain A. G. C. Stainforth, Chief Akinpelu Obiasesan, O. Bateye, J. U. Eka (MBE), Chief A. A. Laditan and R. M. Leslie – the first registrar of cooperative societies in the Eastern region of Nigeria (Odey, 2009). It is interesting to note that after thirty years and more, the benefits and progress of corporations have tremendously affected all the facets and segments of the Nigerian society and economy. Nigeria is an agro-based economy, and it is only natural that agricultural cooperatives should precede any other type of business enterprise in the country. Anytime cooperatives are being mentioned, it starts and ends with Agro allied and agricultural produce. The Agricultural Department with its headquarters in Ibadan organized the Western Region Cocoa Farmers into a group through which better planting and processing methods were taught. In the year 1936, these groups were taken over by the newly formed Cooperative Division of the Agricultural Department for the purpose of organized marketing. In the same year, for the same reason, some other groups engaged in the production of palm produce in Eastern Nigeria were also taken over by cooperatives. The first Thrift and Loan Society was organized by the Abeokuta Catholic Teachers, and the first Thrift and Credit Societies also came into existence during the same period. By the end of 1943, there were already 180 registered cooperative societies, and by the end of the first ten years of inception, cooperative societies had taken firm roots in the country (Odedoku, 1996).

The successful example of cooperative business provided by the Rochdale Society, which also established between 1850 and 1855 a flourmill, a shoe factory, and a textile plant, was quickly emulated throughout the country. By 1863 more than 400 British cooperative associations, modelled after the Rochdale Society, were in operation. Thereafter the English movement grew steadily, becoming the model for similar movements worldwide. Notable among the European countries in which consumer cooperation received early popular support were France, Germany, Belgium, Austria, Italy, Denmark, Finland, Norway, and Sweden (Abell, 2004).

Lawal (1982), sees this organization as an industrial organization where a number of people may combine as consumers to produce a commodity, the proceeds of which are distributed among the participants. Brown (1986), thinks of cooperative society as a business organization in which a group of individuals who have a common interest, mutually agree to join together to establish this business in order to promote their economic activities like production, distribution or marketing of goods and services, and for the provision of welfare benefits to their members. Of all these definitions, it could be argued that the most embracing of them all is that given by the International Labour Organization – ILO which states that, “cooperative is an organization of persons, usually of limited means who have voluntarily joined together to achieve a common economic end through the formation of a democratically controlled business organization making equitable contribution to the capital required, and accepting fair share of the risks and benefits of the undertaking (ILOWorkers Manual, 1978).

1.2 Statement of the Problem

The success of any cooperative society towards its economic development depends on the managerial ability of the executive and the unification or cooperation of the members. Therefore, poor management planning and market planning has been the case of many community towards its economic development issues and revenue generation. Another problem facing cooperative societies is inadequate organizational structural and execution of plans. Other problems among others include: illiteracy of some members which unable them never to have the opportunity to attend workshops, seminar or conferences on cooperative society management and inadequate and effective allocation of funds to business ventures which also hinders cooperative management. Irrespective of all the policies and programmes of successive government in Nigeria, yet most of the community in some local government in Enugu State still suffers from inadequacy of social services, high birth rate and death rate, low life expectance, malnutrition and Ignorance, hunger, poverty, disease, unemployment, poor housing, under-employment, poor infrastructure facilities, technical and managerial skill to improve production. It is in the light of these problems; the researchers therefore boarded to examine the activities of co-operative societies and their contributions towards the economic development of in Enugu State, Nigeria. The problem of this study, therefore, put in question form is: What are the contributions of co-operative societies towards economic development of Udi local government area of Enugu State, Nigeria.

1.3 Objective of the Study

The objectives of this study are;

To find out if there is a relationship between cooperative societies and economic development
To examine the challenges affecting the contributions of co-operative societies to economic development.
To suggest solutions to the problems discovered

1.4 Research Hypotheses

Hypotheses One

Ho: There is no relationship between cooperative societies and economic development.
Hi: There is a relationship between cooperative societies and economic development.

Hypotheses Two

Ho: Financial management is not a problem for cooperative societies in Enugu
Hi: Financial management is a problem for cooperative societies in Enugu

1.5 Significance of the Study

This study on cooperatives and economic development will be useful to economy planners and the government in making relevant decisions and policies that will strengthen and enhance the operations of cooperative societies in Nigeria. It will provide information to the leaders of cooperative societies on the problems of the society and the possible solutions.

This study will also be useful to other researchers who intend to carry out the same or similar projects.

1.6 Scope and Limitation of the Study

This study is primarily concerned with cooperative society and economic development. This study covers Udi local government area. The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following.

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

1.7 Definition of Terms

Cooperative:

A cooperative society is a group of individuals who have specific common needs. It is an economic enterprise, the purpose of which is to improve the economic status of owners or members. Most cooperative societies offer their products to their members and others do not serve non-members

Economic Development:

Defined as efforts that seek to improve the economic well-being and quality of life for a community by creating and/or retaining jobs and supporting or growing incomes and the tax base.

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concerned with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
Chapter three deals on the research design and methodology adopted in the study.
Chapter four concentrate on the data collection and analysis and presentation of finding.
Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to have a critical analysis of cooperative societies and economic development.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations are made, which in the opinion of the researcher will be of benefitin addressing the challenges of cooperative societies and economic development.

5.2 Summary

This study aimed at having a critical analysis of cooperative societies and economic development. Three objectives were raised to guide this study. These objectives include: To find out if there is a relationship between cooperative societies and economic development, to examine the challenges affecting the contributions of co-operative societies to economic development and to suggest solutions to the problems discovered.

5.3 Conclusion

Based on the above findings pertaining to the objectives of the study the following conclusions are drawn.

Cooperative societies are vital to economic growth and development. Recognition of a common need is fundamental to the formation and successful operation of a cooperative. Potential members must devote much time and energy to developing their new business (Dogarawa, 2010). A cooperative requires member commitment to finance and use the business and select knowledgeable directors who hire a competent manager. A strategic business plan is important to harmonize all of the elements for the cooperative’s success.

5.4 Recommendation

To better tackle cooperative societies in Nigeria, cooperatives should make optimum use of all resources and strive continuously to enhance productivity of resources; ensure highest efficiency while providing services to members; improve management capabilities and competencies through effective organizational designs and structures; mobilize capital and lay greater stress on internal capital formation and accumulation.

Cooperative societies should develop and retain human resources – members, leaders, staff and managers; forge strategic alliance with key institutional actors in the new environments; evolve and sustain integrated, vertical structures; increasingly focus on directly enhancing socio-economic conditions of their members by undertaking value-added operations; encourage members’ participation through improved, diversified services; and strictly adhere to the values of honesty, openness, caring and concern for community and environments.

Governments are expected to provide a supportive policy, legal and institutional framework, provide support measures based on activities, provide oversight on terms equivalent to other forms of enterprise and social organization, adopt measures to improve access to finance for disadvantaged groups, and topically, to promote the formalization of the informal economy.

Government should contribute significantly to improving cooperative society’s performance by facilitating access of cooperatives to support services, particularly support to cooperative human resource development.

The Ministry of Trade and Cooperatives should endeavor to beam its searchlight on the administration and operation of cooperative societies in each of the states in Nigeria.