WHAT IS THE RELEVANCE OF CO-OPERATIVE SOCIETY TO

NIGERIA ECONMY
Cooperative societies are a unit of business organization. In recent times,
the importances of cooperatives have come into focus in West Africa
countries. Cooperatives society origin is traced to the Rochadale Pioneers
of 1844. It is believed that cooperative societies were in cooperative
before 1844, but is the Rockdale Pioneers of 1844 who popularized the
modern day cooperatives movement. The Rockdale consisted of 28
members who were mostly wavers. Their sole aim of farming cooperative
was to raise their standard of living during this time (1844) people were
experiencing economic hardship. This was mostly pronounced among the
law income earners. The Rockdale pioneers started by contributing or
subscribing a few pence a wee, they managed to obtained 28 with which
they vented a store in Toad Lane, Rockdale. They started tracing with
small stocks of fairs out meal and candles. Profits were distributed to
members in the proportion of their purchases. The Rockdale cooperative
was a consumer cooperative society. In Nigeria, the formation of age
group societies for team work and group financial assistance among
members in respect of farm work, road construction, house erection and
social festivities marked the beginning of cooperative societys
movement. The idea of cooperative societies was first conceived in 1934
and in February 1936. The legislative council passed the cooperative bill
before the movement was officially launched in the country, in the
beginning of cooperative societies in Nigeria; the running of registration
was at the regional levels. The word Cooperative could be used in two
different ways;
a.
. b.

Working together or ready to help

An organized kind of business organization

Cooperative is an old as mankind, for each other. Thus, this is particularly

important in all rural areas of the world. The herding of all livestocks is
often carried out in turns by the herdsmen. The gathering in and the
thrashing of each farmers harvest area often carried out by all neighbours
joining together to help one another iun a manner, which though
voluntary, is morally compulsory by tradition I certain countries,. This
same method is used for skinning well, building irrigation reservoirs and
ditches putting up houses and even burying the dead. Also cooperative is
known as a type of business organization. Its introduction to industrial and
business lives in West Africa generally and the rural areas of Nigeria in
particular, are however new. Cooperative in his modern world is varied
and it covers the work in all its business entities. The importance of

cooperative societies in Nigeria cannot be over emphasized. The

cooperative development in any place must be conditionally by its
economic pattern Nigeria has an agricultural economy and cooperative
was first developed in Nigeria.
At present, many types of cooperative societies are existing in Nigeria.
They are as follows./ agricultural products marketing societies, consumers,
cooperative thrift and loan societies, cooperative craftsmans societies
and multi-purpose cooperative societies. Some of these societies exist in
Oredo Local Government Area of Edo State. Cooperative society played a
vital role by establishing a cooperative school where auditors and
inspectors are being retained to audit and inspectors the activities of
various cooperative societies to avoid fraud, misappropriation and maladministration. In conclusion, even though cooperative society has not
and cannot cover all facets of economic activities, it has covered the
salient parts of the activities of the common man, particularly the area
under which they have been suffering.
Meaning of Cooperative
The word cooperative has for many decades become a household word
in Nigeria, though many users of the word apply it to different situations
and circumstances. Generally however, the term cooperative society is
simply defined as a voluntary association of free and independent minded
persons for the betterment of their economic conditions (Okonkwo, 1979).
In the above definition, three key concepts are emphasized and these are,
voluntary, free and economic. These together emphasize the fact that
cooperative societies are and should be purely voluntary without any
element of compulsion and that members join cooperative associations
out of their free will in which case, they may choose not to join. From the
above definition also, it is implied that cooperative associations are within
the realm of economic associations which exist specifically to improve the
economic conditions of members. This makes them non-political, nonreligious, non-sectional and non-clandestine associations.
In a study on status and role of cooperatives in the light of new economic
and social trends, the term cooperative is defined 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 (UNO, 1996).

It can be deduced from the above definition that apart from economic
needs which are primary in cooperative organizations, there are also
social and cultural needs which though not primary, are equally important
goals of cooperatives. When put together, it is pertinent that economic,
social and cultural needs will sum up to the general welfare of the
members. This also implies that cooperatives are generally formed to
provide services to members and that this encourages cooperative
members to have a strong incentive and motivation for efficient operation
and continuous innovation in response to changing business environment,
which in turn makes cooperative societies to achieve high rate of both
initial success and long-term viability (UN, 1996).
The United States Agency for International Development (USAID) defines
cooperatives as voluntary independent business enterprises formed to
meet specific needs of their members through a common venture (USAID,
1985). This definition emphasizes the independent nature of cooperative
societies which implies that cooperative movements have to be permitted
to disengage themselves from the State at least for three reasons. First,
the cooperative movements cannot become member-governed and
member-controlled popular movements unless there is significant
withdrawal of state involvement. Second, state disengagement has to
involve a withdrawal of state intervention and influence on factors which
directly or indirectly may affect the business operations of cooperative
organizations. And third, the state should no longer see the cooperative
movements as a means or instrument which can be used to implement its
general development policies and various rural development programmes
(ICA, 1994). This implies that the State should set the statutory and legal
frameworks for establishment and functioning of member-controlled
cooperatives rather than hijacking their activities for government
purposes.
In a study on prospects of cooperatives in Central and Eastern Europe, it
was noted that the whole background for the current development of

cooperatives in the region must be understood in the context of the

metamorphosis of economic structures changing from a social system
based on a planned economy to a market economy. The study further
regarded a cooperative as:
An association of persons who are as a collective, running an enterprise
based on self help with variable capital assets and a variable total number
of members. The cooperative promotes mainly the common economic
interests of its members and has to be somehow officially registered (ILO,
2004).

From the above definition, it is evident that cooperatives in the central

and eastern European region essentially existed within a socialist
orientation and at the present however, they find themselves at cross
roads between socialist history and capitalist future. This includes an
increasing set of possibilities, which could be seen as chances as well as
dangers. To ensure the continued existence of cooperatives in post
socialist countries, they must have to recognize the demands resulting
from the transformation process and they have to learn how to solve the
expected myriad of problems.
From the perspective of this work, a Cooperative Society can therefore be
defined as a legal association of persons who have joined resources
together based on principles of democracy, unity, equity and liberty for
purpose of achieving their collective economic and social gains through
provision of services to their members.

The Origin of Cooperative Movement

The origin of the cooperative movement is usually traced to the problems
of the Industrial Revolution in Great Britain in the late eighteenth and
early nineteenth centuries, which resulted in the capitalist system
whereby human labour was replaced by machines in industries. The
factory owners were only interested in making money and this acquisitive
tendency made them insensitive to the sufferings and hardships of the
workers they employed in their factories. The workers suffered from poor

wages, insanitary working conditions, long hours of work, and they were
exploited in many and varying other ways. There were cries for the
amelioration of these evils to no avail. However, some humanitarians
carried these cries beyond rhetorics, which led to the beginning of the
cooperative movement, and according to Okonkwo, (1979):
The working class had appealed to the government to alleviate their
suffering but their pleadings fell on deaf earsHaving got no consolation
from government, the workers believed that they could band themselves
together and solve their problems.

The year 1884 is generally regarded as a memorable one in the history of

the cooperative movement, when precisely on August 15th, a group of
twenty-eight workingclass people launched the first ever successful cooperative society in the
small village of Rochdale near Manchester in England. According to Allen
(1958), the society was registered as Rochdale Society of Equitable
Pioneers. Okonkwo (1979) recalls that:
Their cooperative society was a consumer shop. They mobilized capital by
contributing few pennies weekly. They later opened a small consumer
shop where they sold goods of high quality and of everyday consumption
at reasonable prices which was not possible in other shops in England at
that time.

From this beginning and gradually too, the gospel of cooperative societies
spread from Great Britain the whole of Europe, America, Asia, Africa and
the other continents.

History of Cooperative Development in Nigeria

The history of the cooperative movement in Nigeria dates back to the
1930s. The cocoa farmers in the then Western Region were organized into

miniature cooperative societies. The Nigerian Government in 1933,

appointed a cooperative expert Mr C. F. Strickland to study and report
on the desirability of establishing cooperative societies in what was then
the colony and protectorate of Nigeria and according to Okonkwo (2001),
his report in 1934 pointed out that Nigeria was fit for introducing
cooperative societies. It also stated the objectives of cooperatives, the
nature of cooperative societies and the types of cooperative societies
which were most suitable.
In the year 1935, the Nigerian Cooperative Ordinance was enacted and by
1936, regulations were drawn up to guide the running of cooperative
societies. According to Okonkwo (1979) there were about 181 cooperative
societies in Nigeria as at then, and the cooperative federation of Nigeria
was formed in the same year.
Until 2002, Nigeria had no cooperative policy in the sense of a formal
deliberate official statement accepted and respected by succeeding
governments. The lack of a long standing cooperative policy is evident at
both the federal and state levels, but is most noticeable at the federal
level on account of its leadership position. The Nigerian Cooperative
Societies Decree 1993, for instance, was passed without a federal policy
statement. As a result of this, the decree was clouded with
inconsistencies and contradictions which include a lack of clear definition
of the term Cooperatives, absence of vision statement on the goal
situation, non inclusion of a report on the state of cooperatives as well as
the role of the apex organization, etc. This has made it pretty difficult to
have the needed restructuring effect on the movement. In fact, the
cooperative movement in Nigeria since 1993 has had no sense of
direction since no definite goals were set.
Since 1935, Nigeria has had cooperative laws and rules from which an
implicit policy may be deduced. There have also been some policy
statements on cooperatives made now and then by Heads of state and
state governors on various occasions, especially in annual budget
speeches, and more particularly in the development plans of the federal
government which have not been backed up with action. The following
extract from the Third National Development Plan (1975 1980) illustrates
the conception of the cooperative movement by the government:

It is the objective of government during the plan period to foster the

growth of cooperatives more consciously as instruments for achieving
increased agricultural productivity and rural transformation (FRN, 1974).
What one understands from this kind of fragmentary policy statement is
that cooperatives are perceived as government tools for promoting not
the objectives of members but rather the objectives of government.
Generally therefore, the cooperative policy in Nigeria has been observed
to have been inconsistent with the generally accepted concept and has
been applied differently in different regions of the country.
During the military era, cooperatives were remembered at the launching
of populist white-elephant programmes such as Operation Feed the Nation
(OFN), Better Life for Rural Women, Family Economic Advancement
Programme (FEAP), etc. Under these programmes, cooperative societies
were expected to dish out large numbers of registered cooperative
societies to benefit from government grants with little regard for due
process or quality. Such cooperatives went moribund with the demise of
the regime concerned (Onuoha, (2001).
Nigerian governments have however adopted an implicit policy of active
government sponsorship (paternalism) expressed in terms of grants,
loans, subsidies, and a willingness to interfere directly in the management
of primary, secondary or apex societies. This, according to Onuoha
(2001) has resulted in a movement that is government led, that is to say,
an economic enterprise in which the entrepreneurial initiative rests with
government officials. To Onuoha (2001) therefore, this is why the
movement since 1935 has not made significant impact on the lives of its
members as well as the national economy as a whole. The author
concludes that the policy is characterized by government domination,
bureaucracy, inefficiency and official corruption, and that this is why
government cooperative policy has largely been a failure. This also
explains why the International Labour Organization in Geneva has
attributed the failure of cooperatives in Africa to faulty policies and faulty
cooperative legislation, that is, an unstable legal, administrative and
institutional environment (ILO, 1995).
A good cooperative document must contain a clear definition of the term
cooperative, a vision statement on the goal situation and report on the

state of cooperatives in the country, the objective of the policy and the
role of the national apex organization. It must also include establishment
of a cooperative advisory body to the presidency, principles guiding future
cooperative law, role of government and other relevant agencies in
cooperative development, as well as progressive de-officialization and
privatization of support services.
An expert opines that a national cooperative conference should prepare
the draft policy paper which is then presented to the government for
adoption (Onuoha, 2001). A look at the cooperative development policy
for Nigeria issued by the federal ministry of agriculture and rural
development in August, 2002 shows that the policy is lacking in most of
what is expected in the content of a good cooperative policy document.
This is a likely indication that the planners of the policy must have been
government agents and not necessarily experts on cooperative
development education.

The Nigerian Rural Environment

The rural areas have distinguishable characteristics especially when
compared with urban settlements. The Nigerian rural environment is of
utmost importance because it is from it that we find a concentration of the
farming population which produces over 70 percent of the food and meat
requirement both for export and local consumption (Olayide, 1980,
Famoriyo, 1995).
According to Ellah (2005), the typical Nigerian rural area is sparsely
populated with people settling in hamlets or small villages with low
population density of between 50-100/sq.km. To him also, rural areas are
organized on the basis of kinship or extended family ties with inhabitants,
mostly farmers, cultivating different crops that can grow in their ecological
zones and also rearing animals suitable to such zones. They usually rely
on simple technology and tools such as machetes, hoes, wheelbarrows,
axes, etc in their farming operations. Rural dwellers are also generally
homogenous ethnically and culturally.

The Concept of Integrated Rural Development

Integrated rural development can be seen as a new and broader view
which conceptualizes rural development to involve incorporation of the
development of the different sectors of rural life that is in turn, intended to
enhance the quality of life of the rural people by reducing rural poverty
and increasing rural productivity (Akande, 1995). Until recently, rural
development had been taken to be synonymous with agricultural
development (Akande, 1995). This is a fallacy because according to her,
agriculture is not the only occupation in the rural areas. As a result of this
mis-conceptualization in most independent African States, rural
development efforts in most of them have failed abysmally.
Integrated rural development is therefore that approach at rural
development which is holistic, meaning that it involves the development
of all areas of the rural sector such as health, education, agriculture, rural
electrification, housing, water resources, roads/transportation, and other
aspects of rural infrastructure in order to make rural life more meaningful
and productive.

Role of Cooperative Societies in Integrated Rural Development in

Nigeria
The cooperative movement has a major role to play in integrated rural
development in Nigeria, given that it is one of the most wide-spread ruraloriented socio-economic development organizations in the country. This is
because true cooperatives can be spring-boards for a peoples own effort
in community development. This is in addition to the fact that
cooperatives provide basic training in democratic procedures which are
necessary in other phases of rural community development.
In a very broad sense, cooperatives are associations organized by the
members to obtain a service or services which could be better obtained as
a group rather than individually. Cooperatives are very relevant to
community development because the latter is a total programme
involving all aspects of community progress, while cooperative as an
extension is an educational service in social and economic progress which

can be initially beneficial to cooperative members alone but eventually

involve the community as a whole.
In the light of the foregoing, it is clear that the various types of
cooperative societies can be used as viable strategies in the pursuit of
integrated rural development depending on the objective(s) being
sought. Yahaya (1995) suggests the following areas of emphasis in the
approach:

Savings and Credit cooperatives:

Generally, the savings and credit cooperative society is regarded as the

most basic and necessary form of cooperative especially for the rural
dwellers, as well as being the easiest of all forms of cooperative
organizations to learn about and conduct.
The cooperative credit society which is the most well known in India
(Yahaya, 1995) and several other countries is mainly used as an agency
for credit for agricultural production. The savings cooperative on the
other hand has its impact in Canada and the United States of America
(USA), where the credit unions are basically savings organizations that
depend entirely on the thrift of the members for their resources for
lending (Yahaya, 1995). Most cooperative societies/organizations in
Nigeria, including the Benue State University Staff Thrift and Loans
Cooperative Society and the College of Education Katsina-Ala Staff Multipurpose Cooperative Society Limited are savings-based.

Marketing and Distribution Cooperative Societies:

These are generally organized for marketing and sale of agricultural and
fishery products and they can also specialize in the procurement of goods
such as fertilizer, seeds, fishing gears, etc for primary producers. They
can also engage in the purchase of consumer goods such as food, clothing
and household supplies, usually buying in bulk and selling to their
members at retail rates. Their services are most needed in Nigeria today
consequent upon the scrapping of the commodity marketing boards by
the government.

Workers Production Societies:

Workers production societies stress traditional craftsmanship and are

usually small enough for each employee to identify himself with the
enterprise as a whole and to take interest in its operations. They sell
mostly their finished products to retail societies and divide the surplus
between their workers and customers. This kind of societies are found
among leather workers, blacksmiths, carpenters, tailors, etc, which
enables the members to obtain machinery and equipment in order to
modernize their various trades. Through their existence and activities,
they will not only encourage self-reliance but also provide job
opportunities for many of our young school leavers.

Community Services Societies.

In many parts of the world, services such as water supply, irrigation,

electric power (generation and supply) hospital and medical care,
transportation, telephone services, etc, are organized as cooperatives,
and according to Yahaya (1995), a famous example was started in
Yugoslavia where the government had not provided medical and health
services in the rural areas. The problem was taken up cooperatively
where doctors were prepared to work in the rural areas and rural people
cooperated to build dispensaries and houses for the doctors and later
small hospitals or rooms with a few beds for minor cases.
In Portugal, it is reported that when you ring up for a taxi, you will most
probably find out that it is one belonging to a cooperative. Cooperative
electricity supply societies have proved valuable in former Czechoslovakia
where they supplied all needed equipment on line or line purchase. These
societies also employed demonstrators and instructors who went round to
teach the rural people how to get the best of their equipment and keep it
in good serviceable condition (Yahaya, 2001).
Even though cooperatives are organized mainly to serve economic
interests of its members, they have certain social or community value that
can equally serve the interest of the rural communities. Thus, according
to Ladilow (1962), a one-time FAO consultant on cooperatives, in many
cases, rural cooperatives are organized simply to provide a service where
none exists; successful cooperatives tend to stop the drain of resources
from the rural community; successful cooperatives have given confidence
to rural people, especially where they tend to feel dominated by urban

influence and urban control; for many rural people, cooperatives have
been the principal agency of adult education.

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