Socio-Economic Development Contributions of Cooperatives and Encountering Challenges in Ethiopia

Abstract

Cooperative is a useful instrument to alleviate the socio-economic problems of the societies in many countries in general and in developing countries in particular, including Ethiopia. Cooperation among people has existed since time immemorial. However, formal cooperatives began in Ethiopia since 1960. The objective of this study was to show the socio-economic development contributions of cooperatives and the challenges encountering the sector. Intensive conceptual and empirical literature reviews were made in the areas of cooperative development, cooperative policy and regulatory framework documents, and cooperatives periodic activity reports from the Cooperatives Commission of Ethiopia. The study indicated that the number of primary cooperatives has increased from 149 to 99,542 from 1960 to 2021 showing 66,000% rate of growth. The number of members increased from approximately below one thousand to about 21 million during the same period demonstrating very high growth rate. Likewise, their capital was increased from about a million to 28.8 billion Ethiopian Birr during the stated periods. The finding identified challenges of cooperatives such as low participation and lack of awareness, low involvement of the stakeholders, lack of professionalism, weak linkage, inadequate support and lack of good governance. It necessitates provision of cooperatives education and training to promote members’ participation, involving stakeholders, attracting professionals, creating strong linkages, solving capital related problems, promoting cooperatives’ good governance and providing enabling legislation and regulation for the development of the cooperatives.

Keywords: Challenges; Modern Cooperatives; Primary Cooperatives; Stakeholders’ Participation, Socio-Economic Contributions.

DOI: 10.7176/JESD/13-1-04

Publication date: January 31^st 2022