Cooperatives Societies present basis and opportunities for people to cooperate
or work together. Of course, through our common history as a nation, people had always cooperated. Predating the modern cooperatives, there were associations
along common felt needs; Esusu and Ajo (in the Yoruba nation), Gaya and
Adashe (In the Hausa enclave). Isisie ego and Oha were operational in eastern Nigeria among the Igbos. In fact, they still operate in smaller groups as alternatives to formal cooperatives. They are prone to issues accountability.
Such associations of people, whether traditional or modern, must necessary be guided by rules and laws so as to guide conduct and essentially safe the ‘commonwealth’ that has been created.
Apart from liability of modern cooperatives being limited, a major distinguishing factor between the traditional association and modern cooperatives is regulation.
Whereas Modern Cooperatives are formally regulated by Law, traditional
associations are self-regulatory and guided by mores.
Generally speaking, Law regulates actions and activities. It defines bounds of propriety and excesses. It exerts influence on conformity with enforceable consequences for infraction. In fact, there is no critical time than now when cooperative is in need for conformity to defined bound.
Cooperative is an enabler that is capable of lifting the throng of people at the base of economic ladder out of poverty trap. While this is true, in recent time,
because of capacity issues, limited personnel (as cooperative officers) for regulatory oversight functions, infrastructural deficit etc, the Cooperative system has become a subject of sporadic abuse by appointed executives and a few cohorts. So, who has the task of regulatory oversight?
Constitutionally, Co-operative societies and related issues had always been
under the concurrent legislative list. This means that the Federal Government
through the Federal Department of Cooperatives on the one hand, and the
Various States Government through the States Department of Cooperative on the other, are constitutionally empowered to regulate Cooperative activities in the interest of cooperative development. This power is manifest in the authority to issue and or withdraw certificate of registration.
Whereas the Cooperative Act as contained in the Constitution of Federal
Republic of Nigeria states penalties for infraction, lack of enforcement of the said stipulations have tacitly given leeway for some appointed members In privilege position to pursue self-serving interest at the expense of the cooperative societies which they represent.
Similarly, the Cooperative Federation of Nigeria (CFN) is a self-regulatory
organization (SRO). Being the Apex umbrella for all cooperative entities in
Nigeria, CFN exercises a Self-regulatory role in relatively limited capacity. as an SRO it exercises some degree of regulatory authority over the cooperative sector in addition to government regulation which course forth from the Federal and States Departments of Cooperatives.
How to Promote Accountability In cooperatives:
Every member of the Cooperative Society; primary, Secondary or Industrial has a role in safeguarding the cooperative and the commonwealth created. This would be possible if all members exercise a duty of care and expand their capacity for ‘watchdog’ role.
The Cooperative Act 2004 Part 3 (37) provides for three categories that may
send application to their respective states’ Director of Cooperative or the Federal
Director of Cooperative thereby invoking inquiry and Inspection. These include:
i. a simple majority of the members of the committee
ii. not less than one-third of the members of the registered society
iii. a creditor of a registered society
Any of these categories of petitioners may through their application to the
The director of cooperatives call attention to anomalies in their cooperative societies’ activities or books.
Upon receipt of such application, the Director of Cooperative shall cause an
inquiry to hold an inquiry into the cooperative constitution, working state and the financial state of the society provided it was registered in the first place. Every member of the cooperative must be proactive on the wellbeing of the cooperative and report abuse to deter unchecked individual exco member abuse.
Such watchdog vigilance is necessary because the Directors in the respective state are not ‘all-seeing’. They will act when they are informed.
The penalty for a proven infraction is/are fines and or jail term.
In fact, the Director is constitutionally empowered to deregister errant
cooperatives on proven grounds.
To create check and balance and forestall absolute power which may corrupt, the constitution allows for an appeal of the Directors ruling through an appeal to the supervising Minister or commissioner (in the case of Federal Director, or state Director, respectively). Another effective way to promote accountability is cooperative practice is the promotion of Cooperative process automation (CPA). CPA will reduce errors that result from manual inputs, it reduces stress on cooperative personnel, members and external clients.