Types of cooperative society in Nigeria

Types of cooperative society in Nigeria

What is cooperative society? In the following write-up, this question will be discussed in the context of Nigeria. You will also learn more about the existing types of cooperative society in Nigeria. It is very meaningful data for understanding which areas can be profitable nowadays.

cooperative society in Nigeria

In Africa, the first cooperatives appeared at the beginning of the 20th century. It happened because the colonial administration intended to establish contacts with the local population through cooperation. The development of cooperative society in Nigeria has been slow and difficult. This can be explained by the following factors.

The first is that cooperatives were allowed to operate only in the status approved by the colonial power. Any deviation from the existing order was impossible. Such cooperatives were short-lived due to their weak material base.

The second, large landowners, tribal chiefs, and community leaders looked towards the emergence of cooperatives involving the poor. They knew that this kind of cooperation will spur the organized struggle of the peasants against the exploiters. These factors explain why, in the colonial period, the idea of cooperation was spreading very slowly.

The first attempts to create different types of cooperative society in Nigeria were aimed at the peasants. For example, agrarian cooperative society in the city of Ibadan (1904), the cooperation of growers Agege (1907), and the Association of farmers, EGBA (1910). These cooperative societies appeared in the region of cocoa cultivation and regardless of state support.

Types of cooperative society in Nigeria

The sharp economic decline has become a reason for the appearance of the new types of cooperatives. The idea was to provide financial assistance for the under-privileged. So that they could afford to buy essential things and get basic needs.

First of all, it should be mentioned that Nigerians can’t meet all their demands. It is obvious, as the majority of people live at a level less than the federal poverty line. Everyone understands it is impossible to obtain any property with cash wages of less than $1 per day. That’s why the community strives to organize different forms and types of cooperatives in Nigeria.

A cooperative is a private business organization that is owned and controlled by the people who use its products, supplies or services. Although cooperatives vary in types and membership size, all were formed to meet the specific objectives of the members, and are structured to adapt to a member's changing needs.

Types of cooperatives in Nigeria

1. Consumer cooperatives

societies in Nigeria

Its role is to provide affordable price for goods and services which are essential for the overwhelming majority of people. It is crucially important in the case of domestic commodity shortage.

2. Credit cooperatives

Such cooperatives exist for providing savings and loan services to its members. There are such advantages as: convenient collateral for loans, low-interest rates on issued loans, high speed of decision-making on granting of the required amount of money, the minimum difference between interest on deposits and loans.

3. Agricultural/Farmers' cooperatives

Nigerian cooperative society

In Nigeria, the agricultural sector is the main sphere of production. It involves the overwhelming mass of the population (about 43% of the working population). However, the low level of development of productive forces and the predominance of traditional low-productivity types of farming make this industry the most deprived in the structure of the national economy.

The ability of the agricultural sector to play its traditional role in the economy of Nigeria was limited by various socio-economic and structural factors, since independence in 1960. Some of which included the civil war in the late 60s, a severe drought in the early 70s and 80s, as well as the discovery of oil deposits. The oil boom in the 70s created a relative loss of interest in agriculture in comparison to other sectors of the economy. Nevertheless, oil prices in the 80s fell to some extent, refreshing the interest in the agricultural sector.

This type of cooperatives is the most popular among Nigerians. World practice shows that development of agriculture is largely determined by the use of the benefits of farmers’ cooperative society. The development of a system of agricultural cooperation is the question of social, political, and economic importance.

4. Housing cooperatives

It is a cooperative where every member can buy a piece of land, take part in building houses, and make investments on a profitable basis in real estate business.

5. Fishing cooperatives

fishing in Nigeria

These kinds of cooperatives also still exist. They are usually organized for providing either fresh or processed fish products. There is even a special discount for its members for buying nets and gears. The fact that the prices are reasonable is why it is easy to get into this kind of cooperation.

READ ALSO: How to register a cooperative society in Nigeria?

6. Multipurpose cooperatives

multipurpose cooperative society in Nigeria

Cooperation has an important role to play in the economic system for the efficient development of any industry in Nigeria. It best combines the personal, collective, and public interests. Its role and importance have considerably increased. More people are paying attention to cooperation, seeing in it the possibility of surviving despite the difficult economic situation. Potential advantages and disadvantages of cooperative society in Nigeria are as follows:

- The cooperative movement is able to concentrate the employment, logistical, financial, and other resources for effective use.

- Due to this cooperation business abilities of the members are increasing: the social and economic conditions of their lives and the rural population are improving as a whole.

- Cooperation provides a more sensitive reaction to market fluctuations. However, in cooperative groups, it is easy to achieve a rational use of local, natural and economic resources.

Under ideal conditions, the presence of multipurpose cooperative society traditions is an important part of the successful implementation of the cooperative;s goals. Cooperation, in our opinion, will play a crucial role in promoting the process of development and togetherness. It also leads us on an important direction of industrialization of the economy which will aid our developing country.

Types of cooperative society in Nigeria

In summary, we would like to provide the following key findings and suggestions, according to the scientific studies. They can be useful for a deeper understanding of the state of cooperatives' in Nigeria today:

1. Analysis of the socio-economic relevance of cooperation shows that this phenomenon is developing. Sequentially, it passes through several stages. Cooperation in Nigeria is only at the beginning of its development. It has a great potential to strengthen its impact on economic, social, and political processes in the country.

2. Cooperative society in Nigeria is an important part of agrarian reforms in the country. Redistribution of land, new organizational forms of its use and funding of individual households is expected to be carried out mainly through cooperatives. Their activity stimulates the development of commodity-money relations and the acceleration of growth of the productive forces.

productive society in Nigeria

3. In Nigeria, the majority of cooperatives are controlled by bureaucratic staff, who are not competent enough when it comes to economics and management. There is no established coordination and effective cooperation of the leadership of the cooperatives. As a result, the activities of cooperatives are not competitive in a market economy.

4. The Nigerian government should make cooperative policies that promote greater development. They are responsible for the rationalization of organizational structures and usage of innovations that promote business activity and economic efficiency.

5. International and domestic experience has shown that cooperative aids the economy and the benefits create a unique system of market entrepreneurship. It is the embodiment of genuine economic democracy, an organic combination of private property rights with collective organizational and economic foundations of its practical use. This opens up great prospects for the cooperative movement in Nigeria.

READ ALSO: NNPC Cooperative in N500 million scandal

Source: Legit.ng

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