Tuesday, 21 August 2012

Rwanda : Trade minister vows to eliminate ghost co-operatives

Minister for Trade and Industry, Francoise Kanimba recently vowed to eliminate ghost co-operatives. Illegal or “ghost” co-operatives continue to plague Rwanda’s small business sector and threaten already established co-operatives.
This was revealed in interactions between the Minister of Trade and Industry Francois Kanimba and participants in the “Ask Minicom” Twitter session.
“Most of these ghost co-operatives were formed many years ago, when regulation of these groups was weak. But with this new regulation system, am sure ghost co-operatives won’t survive” Francoise Kanimba, the minister of Trade and Industry says.
Minister Kanimba added that local authorities are now responsible for checking out co-operatives before they can be registered by RCA.
But Damien Mugabo the Managing Director of the Rwanda Co-operative Agency says they are now in place to control co-operatives in the country.
There are many types of ghost or illegitimate co-ops. Some even made up of only one family or household.
Others are owned by one single person while some may simply be co-ops that have not had economic activity in some time, and are effectively no longer operating.
And others are those that are listed as co-ops but operate like companies, where all decisions are made by a board of directors, not the co-op members.
According to MINCOM officials, these groups try to become co-ops because registered co-ops can access opportunities that a single-owner can’t: like funding from NGOs, assistance from government, and better insurance coverage.
Minister Kanimba says these ghost co-operatives will most likely be caught as the RCA searches out co-ops that have not updated their legal status in many years,
Between five and six hundred co-ops still have not been active or doing any activity for public since around 2007.
If these co-ops do not validate by the end of 2012, Minister Kanimba says they will be liquidated.
Ask MINICOM session revealed that two million Rwandans are involved in co-operatives and expanding and strengthening co-operatives is part of the Government’s Vision 2020 policy.


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