Over 35,000 co-operatives and unions under their umbrella body Uganda Cooperative Alliance (UCA) Limited have called upon government to through Parliament come up with a law that establish one body that will license, regulate and oversea SACCOS.
Under current framework, saccos undergone different bodies for operations and these Include the Uganda Microfinance Regulatory Authority (UMRA), Bank of Uganda (Bank of Uganda) and Registrar of Cooperatives at the Ministry of Trade, Industry and Cooperatives (MTIC).
The call was made during a stakeholder’s engagement meeting organized by Uganda Co-operative Alliance Limited and Agriterra Uganda focusing on Co-operative Policy, Legal framework and the role of UCA the Apex body for all Co-operatives in Uganda at Silver Springs Hotel in Bugolobi, Kampala on Tuesday (November 29, 2022).
The meeting aimed at analyzing the current Co-operative Policy & legal framework in Uganda: Gaps and implications, examine an overview performance of different Government programs like the Parish Development Model (PDM), Best approaches to Co-operative model: programs, policy and legal frameworks. The role of UCA as a policy advisor to Government on policy matters relating to Co-operative movement.
It also aimed at bringing out a policy brief paper on policy and legal framework status for Co-operatives in Uganda, Stakeholder common Understanding and position statement of Cooperatives support and engagement of UCA as an apex, Formation of National Cooperative Stakeholders Platform to champion Cooperative issues in Uganda and Development of a road map for fast Tracking Cooperative progress and performance indicators.
Ivan Asiimwe, the General Secretary of Uganda Co-operative Alliance Limited said that some of Alliance members have been affected by this organisation which has made them to lose funds.
“The Board of UCA is mandated to discuss and engage the government on matters concerning co-operatives. But this entire confusion come when government choose to leave us out the major stakeholders, our inputs are necessary while drafting these laws and that’s why we are calling for the formulation of this law,” he said
“Co-operatives are not like companies or businesses but this is unique because a group of people come together to start their saving so if you make the law which is not in line with the values, it greatly affects them,” he said. Adding, “Let us (UCA) be engaged so that we give in our guidance on the way forward for the development of the movement”.
While establishing a SACCO, it’s members must register it with Registrar of Cooperatives at MTIC, it is then licensed by UMRA, then when the funds are above Shs 1.5 bn saving, it is Bank of Uganda that regulates.
“You find that a SACCO has to fulfill all the requirements of all the three bodies, and this is hectic,” said Ferdinand Tumuhaise the Lawyer from Kampala Associate Advocates.
Tumuhaise noted that the current three different laws are hectic and difficult to be fulfilled by the saccos.
“If a SACCO has less than Shs 500 million, it’s regulated by UMRA under the Tier 4 Microfinance and Money Lenders Act of 2016, and if it (SACCO) has more than Shs 1.5 Billion in voluntary savings, the Tier 4 Act now told them to you must go to Bank of Uganda under Microfinance Deposit Taking Institution Act of 2003. So as of now you have to go through the three laws to finally determine where you (a SACCO) belong, “he added
Tumuhaise said Parliament should come up with one law that will harmonize the entire process.
“It’s better that all these laws are amended, and one law comes out and it should establish one body which is representative of all the stakeholders, the Co-operatives, Ministry of Trade, Ministry of Finance, Bank of Uganda, UMRA without it, it’s disturbing members to go to report to all of them and members are relaxing, ending up lacking the licenses,” He added
Speaking to Journalists at the fringes of the stake holder’s engagement meeting, Hon. Fredrick Gume Ngobi, the state minister for Co-operatives said that there is no need to “alarm and panic” since the ongoing government rationalization will solve part of the challenges affecting the Co-operative Movement in the country.
“All these people are their regulators in law, but practically the one who registers you ideally should be the one de-registering you, we are looking at ways of harmonizing them to save small SACCOs like Parish Development SACCOs,” Minister said.
Paradoxically, Gume defended the government move to have many regulators stating that “it was not done in bad faith” because government should oversee the operations of the SACCOs in the country. Much as he promised to settle the disparities in the law to allow the movement to thrive.
In the same vein, experts in the world of academia fault government for substituting co-operative officers to commercial officer.
Professor Lawrence Kyazze a Lecturer at Makerere University Business School and Mr. Kabuga Charles wondered why government has not invested much in operationalizing co-operative officers at village and parish levels.
“… if we had over 200 Co-operative officers in the 1980 to oversee co-operatives and now the Ministry has less than 40 officers in charge of co-operatives, aren’t we working backward?” Prof. said.
In a rejoinder, Mr. Kabuga Charels the former General Secretary of Uganda Co-operative Alliance Limited who doubles as the head of the Co-operative Clan in Uganda advised the cooperative movement to invest heavily in knowledge and technology to match with the speed of the 21st Century.
Meanwhile the legal lacuna dose not only affect small SACCOs it also affects large SACCOs like Wazalendo, Walimu SACCOs Unions for it leaves them in balance without a licensor and regulator which makes them susceptible to losing their voluntary savings.