21 Oct 2014

Etsha 6 Cooperative Society is still operating, despite challenges such as internal theft, which is the major cause of the demise of most of the country’s co-operative societies.

Etsha 6 Cooperative Society, which has branches in Seronga, Gumare, and Nokaneng, is one of the only two such societies that still exis. The cooperative's general manager, who has worked for the co-op for 40 years, Mr Malcolm Thomas said in an interview that co-ops did not have a future in Botswana as an average Motswana was a capitalist yet co-ops were a socialist concept.

Mr Thomas said while there was nothing wrong with the concept, it did not augur well for the development of co-operatives where people should put the good of their society before their personal interests. Swaneng co-op was the first to be established in Serowe in 1964, followed by other societies in most of the major rural villages where they were reasonably successful.

At the time, the lack of infrastructure such as roads and telephones discouraged big business from setting up and competing with them in rural areas,” he highlighted. However, Mr Thomas said co-ops were not started for any ideological reasons, but rather by the need of the people to have access to the goods that they required.

He said in the 1970s, the movement expanded to include a wholesale, Botswana Co-operative Union, a Botswana Co-op Bank and an Insurance Brokers, which suddenly went down in the 1990s due to mismanagement of funds, lack of management skills and mainly internal theft.

He said at the time, the Co-op Bank could borrow money from the Government Public Debt Service Fund (PDSF) at a very favourable rate then lend it to Co-ops at the existing prime rate but they instead lent money to themselves and in one instance they lent P5 million unsecured to a private construction company.

The business veteran said the Etsha 6 Co-op had requested a loan of P800 000 which was rejected even though PDSF had already allocated this amount to the Co-op Bank which resulted in them borrowing from overseas.

“The Co-op Insurance Brokers accepted our payments but never passed them on to the insurance companies which unfortunately led to the clients dealing with them, us included having their claims rejected and we lost P100 000 worth of goods in transit. Both of the scenarios can be termed as mismanagement of finances,’’ he lamented.

He pointed out that there is no how one is going to revamp co-ops in Botswana into globally competitive businesses when they don’t even compete very well in their own local market. 

Mr Thomas said 20 years ago if co-ops had developed the way they should have then they would have been where Choppies is today.

He said he had made a few suggestions to the government in order to sustain the life of co-operative societies. This, he noted, included co-ops being given the responsibility to supply government and parastatals with goods without the need to tender. 

He said he suggested to the Local Government ministry that they should let co-ops supply orphans, destitutes, schools and hostels as that would serve three purposes being to guarantee co-ops a regular income, save the government millions of pula and to help reduce corruption.

‘’The government set up Botswana Development Cooperation and gave them a sole franchise to import sugar thus ensuring they would have sufficient income to cover all their expenses, why not do the same for the co-ops,’’ he asked. ENDS