THE IMPACT OF COOPERATIVE SOCIETIES ON THE ECONOMIC DEVELOPMENT IN NIGERIA

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY: A cooperative is defined as "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise" by the International Cooperative Alliance (ICA), which issued its Statement on the Cooperative Identity in 1995. This definition can be found in the ICA's document (Abell, 2021). It is a company that is voluntarily owned and managed by the patrons who are members of the organisation, and it is operated for those patrons and by those patrons on a cost basis or as a nonprofit (UWCC, 2002). Cooperatives are distinguished from other types of businesses by three distinct characteristics: ownership, control, and the use of services provided by the cooperative. This type of business enterprise strives to achieve complete identity among the component factors of ownership, control, and use of services (Birchall, 2022).

It is impossible to discuss the history of cooperative societies in Nigeria without mentioning the pioneering work done by great men such as C. F. Strickland, Major F. G. Haig, Captain W. J. W. Chessman, Captain A. G. C. Stainforth, Chief Akinpelu Obiasesan, O. Bateye, J. U. Eka (MBE), Chief A. A. Laditan, and R. M. Leslie, who was (Carroll, Etienne, Flores, & VonMuralt, 2021). It is fascinating to see that after thirty years and more, the advancements made by firms have had a very positive impact on all aspects and subsets of Nigeria's society and economy. Since agriculture is the primary sector of Nigeria's economy, it is only logical that agricultural cooperatives would come into existence in the country before any other kind of commercial organisation. Whenever there is a discussion about cooperatives, the topic always begins and ends with agro-allied products and agricultural goods (Abell, 2021). The Agricultural Department, which has its headquarters in Ibadan, brought together the cocoa farmers of the Western Region to form a group so that they could be instructed in more effective planting and processing techniques (Birchall, 2022). These cooperatives were taken over by the newly established Cooperative Division of the Agricultural Department in 1936 for the purpose of organised marketing after having been in existence since the previous year. The same year, for the same reason, many other organisations in Eastern Nigeria that were engaged in the production of palm products were also taken over by cooperatives. These groups were also taken over by cooperatives (Carroll, Etienne, Flores, & VonMuralt, 2021). It was during this time era that the Abeokuta Catholic Teachers established the first Thrift and Loan Society, and it was also during this time period that the first Thrift and Credit Societies came into existence. By the end of 1943, there were already 180 cooperative societies registered, and by the conclusion of the first 10 years after their formation, cooperative societies had established themselves firmly across the nation (Abell, 2021).

The Rochdale Society, which also created between 1850 and 1855 a flourmill, a shoe factory, and a textile plant, served as a successful model of cooperative company that was rapidly replicated throughout the country (Birchall, 2022). By 1863, there were over 400 cooperative societies in existence across the United Kingdom, all of which took their cue from the Rochdale Society. After then, the movement in England continued to grow, and it eventually became the model for movements of a similar nature all over the world. Countries in Europe such as France, Germany, Belgium, Austria, Italy, Denmark, Finland, Norway, and Sweden stand out as particularly notable examples of those in which consumer cooperation was first met with early popular support (Abell, 2004).

According to Lawal (1982), this organisation is an example of an industrial organisation since it allows a group of individuals to work together as consumers to produce a commodity, and then the profits from that commodity are split among the participants. According to Brown (1986), a cooperative society can be defined as a type of business organisation in which a group of people who share a common interest mutually agree to join together to establish this business in order to promote their economic activities, such as the production, distribution, or marketing of goods and services, and for the provision of welfare benefits to their members (Birchall, 2022). It is possible to argue that the definition provided by the International Labour Organization – ILO is the most inclusive of all of these. According to this definition, a cooperative is "an organisation of persons, usually of limited means who have voluntarily joined together to achieve a common economic end through the formation of a democratically controlled business organisation making equitable contribution to the capital required, and accepting fair share of the risks and ben­efits" (ILOWorkers Manual, 1978).

​​​​​​​STATEMENT OF THE PROBLEM

The success of any cooperative society towards its economic development depends on the managerial ability of the executive and the unification or cooperation of the members. Therefore, poor management planning and market planning has been the case of many community towards its economic development issues and revenue generation. Another problem facing cooperative societies is inadequate organizational structural and execution of plans. Other problems among others include: illiteracy of some members which unable them never to have the opportunity to attend workshops, seminar or conferences on cooperative society management and inadequate and effective allocation of funds to business ventures which also hinders cooperative management. Irrespective of all the policies and programmes of successive government in Nigeria, yet most of the community in some local government in Enugu State still suffers from inadequacy of social services, high birth rate and death rate, low life expectance, malnutrition and Ignorance, hunger, poverty, disease, unemployment, poor housing, under-employment, poor infrastructure facilities, technical and managerial skill to improve production. It is in the light of these problems; the researchers therefore boarded to examine the activities of co-operative societies and their contributions towards the economic development of in Enugu State, Nigeria. The problem of this study, therefore, put in question form is: What are the contributions of co-operative societies towards economic development of Udi local government area of Enugu State, Nigeria.

​​​​​​​OBJECTIVE OF THE STUDY

The objectives of this study are;

1. To find out if there is a relationship between cooperative societies and economic development

2. To examine the challenges affecting the contributions of co-operative societies to economic development.

3. To suggest solutions to the problems discovered

RESEARCH HYPOTHESES

Hypotheses one

Ho: There is no relationship between cooperative societies and economic development.

Hi: There is a relationship between cooperative societies and economic development.

Hypotheses Two

Ho: Financial management is not a problem for cooperative societies in Enugu

Hi: Financial management is a problem for cooperative societies in Enugu

1.5 SIGNIFICANCE OF THE STUDY

This study on cooperatives and economic development will be useful to economy planners and the government in making relevant decisions and policies that will strengthen and enhance the operations of cooperative societies in Nigeria. It will provide information to the leaders of cooperative   societies on the problems of the society and the possible solutions.

This study will also be useful to other researchers who intend to carry out the same or similar projects.

 1.6 SCOPE AND LIMITATION OF THE STUDY

This study is primarily concerned with the impact of cooperative societies on the economic development in Nigeria. This study covers Udi local government area. The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following.

a) availability of research material: The research material available to the researcher is insufficient, thereby limiting the study

b) time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study. 

1.7 DEFINITION OF TERMS

COOPERATIVE: A cooperative society is a group of individuals who have specific common needs. It is an economic enterprise, the purpose of which is to improve the economic status of owners or members. Most cooperative societies offer their products to their members and others do not serve non-members

ECONOMIC DEVELOPMENT: defined as efforts that seek to improve the economic well-being and quality of life for a community by creating and/or retaining jobs and supporting or growing incomes and the tax base.

 1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concerned with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study