Cooperatives urged to sign performance contracts
The Minister of Trade and Industry, Francois Kanimba has called on cooperatives to take up signing performance contracts in a bid to ensure development. Kanimba was addressing cooperative representatives on Sunday while celebrating the international cooperatives day.
The celebration, held annually on the first Saturday of July all around the world, took place under theme “Cooperative enterprises build a better world.” Kanimba said that this year’s theme is in line with the government’s expectation from cooperatives to foster national development with the aim of transforming Rwanda into a middle-income country.
“The government is determined to support cooperatives because we expect from them to implement national development targets both in the medium and long term,” he pointed out, adding that the Rwanda Cooperative Agency (RCA) was established to strengthen cooperatives.
In this regard, there is a plan to conduct a study assessing the contribution of cooperatives to the national GDP and the Minister said the findings will serve as a baseline of the development framework.
To make the cooperatives more efficient, they are requested to sign performance contracts, which should include the cooperatives’ investment scheme, their savings as well as their comprehensive business plan. “Rwanda is very ambitious to become a middle-income country by 2020,” Kanimba pointed out. “This requires stepping up efforts and increasing our annual economic growth to 11.5% from 8.5% which we have been achieving over the last years.”
With the performance contracts, he added, cooperatives will boost their revenues, thus helping to achieve these targets. Within this framework, the number of people living below the poverty line should be below 20% by 2020, compared to 45% today, Kanimba remarked.
The Minister emphasized that cooperatives are great channels to take investments to rural areas, hence a great need to strengthen them. One of the ways to do so, he said, would be to consolidate Savings and Credit Cooperatives (SACCOs) at district level so that they can become financial institutions dedicated to fund projects in rural areas.
According to Damien Mugabo, the director general of RCA, there have been great achievements in cooperative development over the years, though some challenges still remain, especially when it comes to financial management, where members should hold their leaders accountable.
Lack of skills to add value and the reluctance of some banks to grant loans to cooperatives were also identified as major obstacles.
RCA has registered so far 4,442 cooperatives of which 41% of Rwandans aged over 18 are members.
During the 8th celebration in the country RCA rewarded the best performing cooperatives from the district to national level with prizes ranging from Frw 200,000 to Frw 1 million. The national champion was Cooproriz Abahuzabikorwa based in Kamonyi district engaged in rice farming.