Cooperatives: New Era of Competition

Tanzania’s cooperative sector has undergone significant changes since the adoption of free market economic policies in the early 1990s. Once granted a monopoly on providing specific business services, cooperatives are now competing with other private sector organizations to survive.

Increased Competition and Innovation

Under the Cooperative Societies Act, cooperatives are recognized as private sector entities with the right to engage in any economic activity permissible under the law. This has led to increased competition among cooperatives, forcing them to adapt and innovate to remain relevant.

New Era of Services

While cooperatives face stiff competition, they are also required by law to provide certain services to their members and non-members. For instance, non-members are required to sell specified produce through cooperatives, as per government policies. This has led to the emergence of cooperatives that provide additional services aimed at socio-economic benefits for both members and non-members.

Range of Services

According to the Act, cooperatives can provide a range of services, including:

Education and training
Advisory services
Data collection and information provision
Consultancy services on produce purchase, storage, and price bargaining
And many others

Challenges Faced by Cooperatives

Despite these changes, many cooperatives still struggle to take advantage of legal incentives provided in the investment laws. For example, new cooperative ventures have failed to apply for tax holidays and other benefits offered to new investors under the Tanzania Investments Act.

Establishment and Governance

In terms of establishment and governance, cooperatives are required to register with the respective Registrars of Cooperatives in Mainland Tanzania and Zanzibar. To be registered, a cooperative must:

Have a minimum number of members
Have a unique name
Have an office with a registered address
Have a Board of Directors or Management Committee
Have a Manager

Additionally, cooperatives must maintain specific registers, submit certified copies of resolutions passed at initial and formation meetings, and provide a report of the formation committee, including a feasibility study or project write-up. The By-laws of the cooperative must also be approved by the Registrar.

Conclusion

The article highlights the challenges faced by cooperatives in Tanzania, but also emphasizes their potential to contribute to socio-economic development through provision of services that benefit both members and non-members.