The President Total E&P Cooperative Society, Olawale Olasoji, in this interview with Ugo Aliogo and Oluchi Chibuzor, speaks about the benefits of cooperative societies as well as the need to encourage more of such groups in the country. Excerpts:
What is your perception about cooperative society in Nigeria?
In 1935, the Nigeria cooperative society ordinance was enacted through the recommendation of Mr. C. F. Strickland which was fashioned out of the India Cooperative Society’s Act of 1912. The ordinance provided for recognition of cooperative as a separate business enterprise, prohibition of the indiscriminate use of the title ‘cooperative’ and appointment of a registrar of cooperative to control and administer cooperative laws and fostering of cooperative development. A study that was conducted on the Nigeria Cooperative Movement in the early 90s by the African Confederation of Co-operative Savings and Credit Association (ACCOSCA) indicated that there are over 15,000 cooperatives operating in the country. Cooperatives are grouped into unions at the district level. The unions are encouraging regular meetings with cooperatives and providing membership education and other technical services to cooperatives. In Lagos, the number of registered cooperative societies has grown from 108 from 1967, to well over 15,000 with a net asset of over N100 billion. The cooperative movement in Nigeria is very strong and growing stronger.
What are those things that prompted your group to engage in various projects across the country?
Financial services and treasury department is a major revenue generating source for Total Cooperative, with its operations in loans, investments and financial instruments. Business development and commerce department is engaged in various profitable commercial ventures which include; Coop Mart, Coop Laundry, Coop Travels, Coop Educational Services, Coop Lube Bay, Coop Le Petit Marche, Coop GSM services, Coop Guesthouse, Coop Café, Coop Event Management, Coop supply and procurement and Coop Fueling station. Total Living, the real estate department of the cooperative has embarked on the construction of an ultra-modern state-of-the-art mixed-use development in Victoria Island, with state-of-the-art recreational facilities, smart living features and a view to envy. Total living has successfully executed the construction of the logistics base. A fully functional serviced facility that provides warehousing, police accommodation, lube bay, fire station, car park and office spaces.
What has been the driving force behind your CSR initiatives?
Cooperate Social Responsible (CSR) is a way of giving back to the society and we a robust CSR team and process. We have provided the following welfare services. We have charity request for help the poor with your donation initiative, purchase of items for CSR events in Lagos, monthly salary for IDPs Teachers from July-December 2018, monthly salary for IDPs Teachers from January to February 2019. We have equally donated to over eight Non-Governmental Organisations (NGOs) to the tune of N9,360,200. Today, in an era when many people feel powerless to change their lives, cooperatives represent a strong, vibrant, and viable economic alternative for people to gain mutual needs.
But has this been achieved by your members?
Cooperatives around the world employ or are the main source of income for more than 279 million people, almost 10 percent of the total employed population. Without counting the jobs and economic activities that have been created through loans granted by credit cooperatives, or through other key inputs provided by insurance cooperatives or electricity cooperatives to millions of producers, nor the indirect jobs generated for providers and clients. Cooperatives play a prominent role in national and local economies. They exist in nearly every sector, serve multiple functions, and range in size from very small, local cooperatives to international businesses. They also vary in terms of ownership. Most cooperatives are owned directly by their members, but others are owned by other cooperatives. Some cooperatives limit their membership to a certain number, others to their workers. Today, in some states, cooperatives are opening their memberships to include an investor class.
Our members are current employees and retirees of Total E and P Nigeria who can save and access loans at competitive rates. They have also enjoyed our business and commerce products; this have boosted their economic leverage.
To be effective and successful, cooperatives must continuously achieve two inter-related goals: enhance viability and improve ability to service its members; and remain an economically viable, innovative and competitive enterprise how has Total E and P fared in these areas?
This is an ongoing debate as the pendulum swings back and forth between service/welfare of members to being economic viability. In many respects, cooperatives are quite similar to other types of corporations. They all participate in the same labour and capital markets and must pay similar wages, management compensation, and interest rates. Many operational practices, such as packaging, storing, transporting, processing, and advertising, would also be the same across all business models. Research have shown that cooperatives and other corporations are equally efficient. Certainly, general economic conditions such as unemployment, interest rates, inflation, and others affect all corporations. The casual consumer usually cannot tell whether they are doing business with a cooperative or a non- cooperative unless of course ‘cooperative’ is part of the company name. The fundamental difference between cooperatives and other corporations is member versus investor-orientation. Cooperatives focus on generating benefits (which may or may not be profits) to members, while other corporations focus on creating returns for their investors. Because of this difference, the operating philosophies between the two can differ greatly. Cooperatives are often created to correct market failures such as provide an important local service and not to simply make corporate profits. An innovative cooperative society cannot be sustainable with only a socialist model. There must be balance between the two extremes.
A cooperative is different from a limited liability company as it looks at profit making only while a cooperative society must seek the welfare of members as well as making surplus. Cooperative don’t make profit, but make surplus which is shared with the members at the Annual General meeting.
In almost all parts of the world, cooperatives face one or more of the following crises: crisis of ideology, crisis of capital, crisis of credibility and crisis of management, what is the best way to address this?
Crisis is a normal and constant experience. However effective management and communication is the antidote to crisis. The changing business environment and growth of cooperatives has accelerated the need for member information. Dialogue with new members, potential members, government agencies and the public is the best way to handle crisis.
What is your corporate governance structure in maintaining sustainability?
Clearly, the board of directors has weighty responsibilities and selection of an active, well-qualified board is critical to the success of a cooperative, strong and effective boards make strong and effective cooperatives. Members with the following traits should be encouraged to run for board seats: good business judgment; independent thinking and a willingness to ask critical questions; respect for other members; integrity. Also a strong work ethic-ability to work well with others makes and keeps commitments, manages time effectively. And with a comprehensive understanding of cooperatives framework. However, our board of director responsibilities; attend every board meeting, actively participate, and be willing to ask questions. Be prepared for every board meeting (read the packet of information sent by management; keep informed by reading newsletters, news articles, and past annual reports). Seek additional information or training when needed to make the right decisions such as financial training. Elect board officers such as chairman, vice-chairman. Hire and supervise the Chief Executive Officer or General Manager. Ensure that management abides by the cooperative’s bylaws and policies. Do not micromanage the CEO; let him or her do the job you specify. Do not expect special treatment by the cooperative and do not vote on issues where there is a conflict of interest. Bring appropriate decisions to the broader membership for approval and make sure the decisions are implemented. Raise capital, supervise loan repayments, manage member equity, and determine and distribute annual Surplus. Select financial institutions (banks) and auditors.
What can the government do to promote cooperative society at micro levels?
Government should encourage them with a more avenues to access credit at a lower interest rate, most especially cooperative education because a lot of cooperative are not doing great as where they ought to be and most of them do not know what to do. The areas that needs most urgent intervention is the cooperative of farmers, funding is their major issues because when the talk to banks, the kind of requirements the banks asks the farmers to bring are not what they can afford or even have access to. This is because there is no serious business they can do with those interest rate that will make them viable. So government can either through the Bank of Industry(BOI) or even dedicated special purpose fund with commercial banks can help these cooperatives have access to cheaper funds to grow their businesses. I know BOI is helping some individuals today, but I am not sure if it is at cooperative level. There are certain things in coming together of individual can do to help themselves, which individual members may not be able to do by themselves.