Creating Enabling Environment to Foster Growth of Worker Cooperatives in Kenya

By Pamela Kaburu

Though popular in western countries, the worker cooperative business model is relatively new in Africa and Kenya is among the pioneer countries testing this model under the USAID funded Cooperative Development Program -CLEAR (Cooperative Leadership Engagement Advocacy and Research) Program implemented by Global Communities.

Worker cooperative is a business owned by workers, combining skilled member labor to create a business that can set appropriate wages, demand safe working environments, and contract for steady employment.

These cooperatives are value-driven businesses that put workers and community benefits at the core of their purpose, anchored on the cooperative principles and values. The business enterprises are owned and run by their members, who are the owners -individuals who have a goal and urge to form and grow their businesses.

Although it has begun to attract interest from various sector stakeholders, little attention has been drawn to it as an economic development strategy. Because of this, the model has faced bottlenecks most of which were systemic in nature.

For instance, lack of proper legal framework to anchor the model inhibited registration and operationalization of these cooperatives here in Kenya.

Previously, during registration, newly formed worker cooperatives were required to register as marketing or Savings and Credit Cooperatives (SACCOs) as there were no legal provisions for registering service and worker cooperatives in the country. This is because SACCOs are a more popular type of cooperative while little was known about worker cooperatives.

It was as a result of this challenge that Global Communities through USAID-funded CLEAR Program, collaborated with the State Department for Cooperatives (SDC), Council of Governors (COG) and county governments to help find a lasting solution for worker cooperatives to gain their footing within an already robust and vibrant cooperative movement in Kenya.

Global Communities’ approach has been a broad engagement strategy involving a wide range of stakeholders for their buy-in and support.

This multi-stakeholder partnership was designed to push for the creation of an enabling environment for worker cooperatives and advocate for the same. In collaboration with the SDC, Global Communities led the co-creation of legal frameworks to ensure that worker cooperatives are anchored in law and provided for in policies and bills, advancing sector’s best practices both at the national and county levels.

Further, it advocates for worker cooperatives model as a sustainable tool to address the ballooning youth unemployment in Kenya.

The worker cooperative model has been embedded in the National Cooperative Policy and Bill that was approved by the previous cabinet and has been re-introduced to the new cabinet for information and ownership ahead of transmission to parliament for debate. This cooperative model has also been anchored in the model county cooperative legislations developed in collaboration with the COG that counties are customizing for their county specific legislations.

To ensure adoption of this business model, CLEAR has rolled out a series of capacity strengthening sessions targeting county cooperative officials. Additionally, the sessions were designed to provide legal guidance to newly formed worker cooperatives.

The program has also enhanced its engagement with the SDC on this cooperative model including the development of model bylaws to aid in the registration and operationalization of worker cooperatives, and facilitating public-private dialogues for a wide stakeholder buy-in.

This engagement brought together the national and county governments to dialogue with the registered worker cooperatives to understand the role they play to support the cooperatives.

Partnership with cooperative development organizations at national and county level plays a valuable role in collectively representing the sector’s interests and perspectives.

CLEAR has prioritized strengthening the capacity of these institutions to take lead in engaging on legislative and regulatory needs for worker cooperatives so they themselves can advocate for the significant role worker cooperatives can play in the Kenyan economy.

With the right support, worker cooperative model has the potential to be the next big thing in Africa as a solution to youth unemployment. With the many challenges facing humanity and an ever-increasing urban population in all towns in Africa, there are innumerable opportunities for worker cooperatives to thrive and gain popularity in the coming years.

Such efforts can be advocated for and championed by the governments of the day in a bid to create youth employment, which has been a challenge for every government that has been and will be.

To achieve this in a sustainable fashion, the agility of the worker cooperative model needs to be communicated to would-be cooperators, educators, and policy makers. The Worker Cooperative model is highly applicable to new generations of Kenyans who are increasingly urban and part of the knowledge and service economy.

Finally, the glue to hold together all these gains achieved and the dynamism of Kenya’s cooperative sector is embedded in the ongoing legal reforms both at the national and county levels.

Spearheaded by the SDC, the legislative reforms seek to strengthen coordination and break silos within the sector while ensuring increased accountability in the governance of cooperatives.

A harmonized policy and legislative framework at the two levels of government will enable cooperative businesses to thrive and the worker cooperative model to gain further popularity.

Pamela Kaburu is the Monitoring and Evaluation Specialist at USAID/CLEAR Program