Sudan: Can the Revival of Cooperatives Calm the Rocketing Inflation?

18 October 2020

Khartoum — The crazy hikes in the cost of commodities and services is one symptom of the economic problem in the Sudan that plagues the politicians and the citizens. Proposed approaches of sorts for solving the problem were put forward to no avail. Foremost among those propositions was a return to consumer cooperative societies. The trend has now become part of the transitional government policy. Only recently the government has ratified the new cooperatives law, which is hoped to allow for the launch of cooperative societies in all aspects of the economy. Accordingly, a hectic movement is now underway to register consumer cooperative societies.

So, what did the government do to reinstate the long-neglected cooperatives and how did the cooperative experiment looks like in the past and will the proposed cooperatives achieve their aspired objectives?

Maha Mahjoub, an expert in cooperatives, describes cooperatives as "a voluntary popular practice that seeks to pool the limited energies and resources of communities in a bid to create effective entities for socio-economic development that could provide commodities and services."

She said in this bid the cooperative societies, addition to provision of consumer commodities, can launch big flour mills, oil mills, textile plants, in addition to other manufacturing facilities.

The cooperatives are not profit-based but, rather, seek to serve the citizens.

According to Ms. Maha, the cooperatives are based on certain principles, the most outstanding of which is that membership is open for all the community members, who also pay equal shares.

The cooperatives are run democratically, where the supreme authority is for the shareholders on equal footing.

The society members run their society and decide upon its functions and fate without intervention from an external power that can dictate what should be done.

These principles are observed by the cooperative movement the world-over.

"Cooperative activity has an effective role in social development. It is an instrument for social change, because it works to change the citizens' ways of living" Maha said.

Unlike a private venture, the cooperative society is not profit-based. And unlike a government project, the cooperative society does not function by orders from a senior authority.

The cooperative is driven by the needs of the members for commodities and services. It is those needs that drive the community to act positively for resolving its problems. It is the development of man for the sake of man himself, added Ms. Maha..

Cooperative societies can also be launched to provide services in areas not covered by the traditional cooperative activity like in the environment, tourism and other services that can open job opportunities for the youth which, in turn, can enhance the income of the individuals.

History of Cooperatives in Sudan:

Sudanese had continued to launch cooperative societies for a long time. But this activity had seen a big jump during the rule of General Ja'afar Nimeiri (1969-1985) with the government using those societies to solve the scarcity in some commodities such as sugar, soap and edible oil.

Maha Mahjoub

By the early 1980s the Ministry of Cooperation was launched as an independent ministry.

But after the 1989 military coup of General Omar Albashir, the cooperative system was harshly attacked by the regime: A law decentralizing the cooperative movement was launched when differing cooperative laws were adopted by some regions. This was incommensurate with the federal cooperation code. The regime also tried to change the objectives of cooperative groupings.

Countries differ in their outlook towards the cooperative activity. Some countries seek to protect the majority of the citizens, hence having no problem with the cooperatives. These countries embrace the cooperative movement and support it. Such countries consider the cooperatives a helping and complementary activity of the state's socio-economic plan. They are seen as part and parcel of the country's economic plan.

But there are countries where some individuals control the means of production and thus control governance. The interests of this class do not cope with the interests of the majority citizens. The privileged class owns the means of production and deprives the real producers, because it lays the rules and determines the production relations in a way that exploits the effort of those real producers. And because the cooperative societies are meant to stop this exploitation, they are not welcome in countries that do not appreciate this trend because of conflict of interests.

A Return to Cooperatives:

A return to cooperatives is now a government-adopted policy to tackle one aspect of the economic crisis: inflation. So, what is the government preparing for this movement? And how far these preparations have gone?

Abdelmajeed Mohammad Ahmed

The answer to these questions is given by Abdelmajeed Mohammad Ahmed, the director of cooperatives in the Ministry of Commerce and Industry in the Khartoum State, who is also caretaker registrar of cooperatives in the Khartoum state:

The defunct regime was bent on the complete derailing of the cooperative system of the country. Ever since its outset, that regime had targeted the cooperative system with destruction, preventing it from playing its natural role in the economy.

Now the government, with its adopted policy of supporting the citizens and directing the energies of the young generations towards production, has strived to revive this vital sector that can bring the people together in economic groupings that can constitute integrative economic entities.

The cooperation system is one of the sectors the government is targeting for revival at the moment. The idea is to bind the producers and consumers together for more productivity. When these energies are pooled together, more jobs can be created for the youth. This can be done through agricultural and artisan cooperatives of sorts, adds Mr. Ahmed.

The cooperatives administration has distributed teams in the Khartoum localities and neighborhoods to educate the citizens about cooperatives and register the cooperative societies' general assemblies.

At the moment we can see a huge turn out of citizens to register new cooperative societies. We have opened windows all through Khartoum state and assigned a cooperation officer whose main job is to compile files for the launch of cooperative societies close to where the citizens live. Procedures of a number of consumer cooperatives are now complete and the societies have already started to render their services to the members.

A cooperative store

In the Redmia Block 15 of the Haj Yousif suburb, a consumer cooperative society member, Aa'isha Edowaym, said as she was preparing to return home after buying what she needed from her area's cooperative society told Sudanow that: "It is unbelievable! Every commodity is nearly half its cost in the market. For instance, a ten kilogram bag of sugar is sold here at 800 pounds, whereas as it is sold for 1500 pounds in the grocery. The 4.25 liter cooking oil jerry can is sold here at 920 pounds as compared to 1600 pounds in the neighborhood shop. A kilogram of rice is sold here at 135 pounds while it is priced at 300 pounds in the grocery. A kilogram of lintels is sold for 210 pounds, as compared with its market price of 360 pounds. The same can be seen in other commodities. A pound of tea is sold here for 225 pounds, as compared to 600 pounds in the grocery. It is this high price of tea that forced some families to quit drinking tea altogether."

According to Aa'isha also, the cooperative society is providing all necessary commodities, including wheat and sorghum flour, too badly needed commodities in this bread shortage families face now.

My Commodity Project:

Dr. Hassan Bashir, Professor of economics, Vice Chancellor of the Red Sea University, attributes this positive difference the cooperatives can create to the Sela'ati (My Commodity) Project the ministries of Commerce and Finance have launched. The Project aims to provide commodities at lower costs, in prevention of harmful speculations.

Logo of Selatie Project

He said the cooperative societies are the Project's sale windows. The project is a market place for producers where commodities can directly reach the consumers without anybody in between. The Project provides necessary commodities. It is an experiment existing all over the world and helps reduce the cost of living, in particular with respect to consumer goods. It provides these needs to a considerable portion of the society: the persons with limited income.

Prof. Bashir is, however, of the view that solving the entire economic problem is a problem related to the macro-economic policy of the country and the government's role in the economic activity in general.

Impediments:

But some impediments could slow the formation of cooperatives: According to Mohammad Mubarak of one of the Burri suburb committees that help in the formation of cooperative societies, the committees are facing complicated and time-consuming procedures.

Shares fixed at a certain sum at one point in time no longer cope with the current economic situation. There must be a rise in the share price and this requires a decision of the concerned society's general assembly. One more problem is the society's sales venue. "I don't believe all the neighborhoods have the ability to prepare suitable sales venues," maintains Mubarak.

All in all, the citizens have gained quite a lot from these cooperatives, given what citizen Aa'isha had said. Such gains can, however, encourage the citizens to come together to solve problems.

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