Cooperative Movement in Ethiopia: Development, Challenges and Proposed Intervention

Abstract

Cooperatives in Ethiopia are playing an active role in the fields of banking, input and output marketing, agro-processing, and many other social and economic activities. Performance analyses of the sector indicate that the number of cooperatives has increased from 26,672 in 2009 to 53,982 at the end of 2014 showing a double-digit growth rate of 17% per year. The aggregate number of members during the same period increased from 5.8 million to 8.3million (9.8% of the population) and their capital increased from one billion birr to 3.5 billion birr. These figures indicate that cooperatives have had the support of the people in undertaking activities contributing to their economic development. Cooperatives have inherent advantages in tackling the problems of poverty alleviation, food security and job creation. They are also considered to have immense potential to deliver goods and services in areas where both the state and the private sector have failed. Serious efforts are being made to strengthen capital resource of cooperatives base through increasing members’ subscription, mobilization of savings and value adding process.The objective of this paper is to examine the current status and challenges of cooperatives in Ethiopia. The study is based on review of pertinent literature on cooperatives in Ethiopia, policy and regulatory framework documents as well as secondary data obtained from various sources. The paper identifies challenges such as, absence of cooperatives policy, weak institutional capacity, over-dependence on government, and lack of professionalism. Finally, it suggests that the evolving strong communication and public relations strategies which can promote the concept of cooperation among the people of the country.

Keywords: Cooperative, food security, mobilization of savings, economic development.