The Relevance Of Cooperative Societies In Integrated Rural Development In Nigeria

By | July 24, 2014
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Ahangba Thaddeus Gbangban

Department of Social Studies

College of Education, Katsina-Ala, Benue State





The problem of integrated rural development is one that has continued to defy solutions for a very long time especially in less developed countries of the world including Nigeria.  In the light of this, strategies that involve wide-spread, rural oriented socio-economic development organizations become expedient.  Cooperatives as rural-based organizations that operate on the principles of democracy, voluntarism, equity and service to the people amongst others are seen in this article as the starting point for any meaningful integrated rural development effort in Nigeria.  These could take the forms of Savings/Credit Cooperatives, Market Distribution Cooperatives, Workers Production Cooperatives and Community Services Cooperative societies. The article posits that it is incumbent on government at different levels in Nigeria to create the necessary enabling environment for formation and proper operation of cooperatives in order for them to take their rightful place in integrated rural development endeavours in the country.




Cooperation among people has been a normal way of existence since the beginning of humanity. This is so because without cooperation, any form of civilization however primitive would be impossible.  Men must have learned very early to combine their ideas, skills and efforts in order to do things, which could have been more difficult done all alone, such as hunting large game and defending themselves against enemies.  This is generally referred to as altruistic behaviour, and this is one of the distinguishing features of man from other animals (Otite et al, 1979).

Cooperative organization is based on the ‘Gessellshaff’ principle of formation of associations as postulated by Tonnies (Marshall, 1998), whereby people associate without knowing each other very well.  This implies that the cooperative movement is predicated on secondary group principles through which any set of people may share some organized patterns of recurrent interaction based on established procedures, rules and expectations (Igbo, 2003).  Igbo goes on to explain that participation in a secondary group such as a cooperative society, is not total but segmental, meaning that part of the individual actor’s life or personality is involved especially with regard to the role assigned to the individual actor.  Thus people in a secondary group tend to follow rules and procedures and are expected to behave unemotionally in an impersonal setting.

Cooperative principles emphasize democracy, membership control, voluntarism, equity and autonomy from government, service to members as well as provision of education and enhancing sustainable development of countries (UN, 1996).

This article focuses attention on the perceived and actual roles which cooperative organizations based on the principles enumerated, can and do contribute to integrated rural development in Nigeria and elsewhere in the world.  Particular attention is paid to the meaning and origin of the cooperative movement as well as the evolution of the cooperative movement in Nigeria.  After describing the Nigerian rural environment and the concept of integrated rural development, the article goes on to consider ways through which different types of cooperative societies can contribute to integrated rural development.  Recommendations are made on how best cooperative organizations in Nigeria can be repositioned towards playing a greater role in integrated rural development efforts in the country.


Meaning of Cooperative

The word ‘cooperative’ has for many decades become a household word in Nigeria, though many users of the word apply it to different situations and circumstances.  Generally however, the term ‘cooperative society’ is simply defined as a voluntary association of free and independent minded persons for the betterment of their economic conditions (Okonkwo, 1979).

In the above definition, three key concepts are emphasized and these are, ‘voluntary’, ‘free’ and ‘economic’.  These together emphasize the fact that cooperative societies are and should be purely voluntary without any element of compulsion and that members join cooperative associations out of their free will in which case, they may choose not to join.  From the above definition also, it is implied that cooperative associations are within the realm of economic associations which exist specifically to improve the economic conditions of members.  This makes them non-political, non-religious, non-sectional and non-clandestine associations.

In a study on status and role of cooperatives in the light of new economic and social trends, the term 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 (UNO, 1996).


It can be deduced from the above definition that apart from economic needs which are primary in cooperative organizations, there are also social and cultural needs which though not primary, are equally important goals of cooperatives.  When put together, it is pertinent that economic, social and cultural needs will sum up to the general welfare of the members.  This also implies that cooperatives are generally formed to provide services to members and that this encourages cooperative members to have a strong incentive and motivation for efficient operation and continuous innovation in response to changing business environment, which in turn makes cooperative societies to achieve high rate of both initial success and long-term viability (UN, 1996).

The United States’ Agency for International Development (USAID) defines cooperatives as ‘voluntary independent business enterprises formed to meet specific needs of their members through a common venture (USAID, 1985).  This definition emphasizes the independent nature of cooperative societies which implies that cooperative movements have to be permitted to disengage themselves from the State at least for three reasons.  First, the cooperative movements cannot become member-governed and member-controlled popular movements unless there is significant withdrawal of state involvement.  Second, state disengagement has to involve a withdrawal of state intervention and influence on factors which directly or indirectly may affect the business operations of cooperative organizations. And third, the state should no longer see the cooperative movements as a means or instrument which can be used to implement its general development policies and various rural development programmes (ICA, 1994).  This implies that the State should set the statutory and legal frameworks for establishment and functioning of member-controlled cooperatives rather than hijacking their activities for government purposes.

In a study on prospects of cooperatives in Central and Eastern Europe, it was noted that the whole background for the current development of cooperatives in the region must be understood in the context of the metamorphosis of economic structures changing from a social system based on a planned economy to a market economy. The study further regarded a cooperative as:

An association of persons who are as a collective, running an enterprise based on self help with variable capital assets and a variable total number of members.  The cooperative promotes mainly the common economic interests of its members and has to be somehow officially registered (ILO, 2004).


From the above definition, it is evident that cooperatives in the central and eastern European region essentially existed within a socialist orientation and at the present however, they find themselves at cross roads between socialist history and capitalist future.  This includes an increasing set of possibilities, which could be seen as chances as well as dangers.   To ensure the continued existence of cooperatives in post socialist countries, they must have to recognize the demands resulting from the transformation process and they have to learn how to solve the expected myriad of problems.

From the perspective of this work, a Cooperative Society can therefore be defined as a legal association of persons who have joined resources together based on principles of democracy, unity, equity and liberty for purpose of achieving their collective economic and social gains through provision of services to their members.


The Origin of Cooperative Movement

The origin of the cooperative movement is usually traced to the problems of the Industrial Revolution in Great Britain in the late eighteenth and early nineteenth centuries, which resulted in the capitalist system whereby human labour was replaced by machines in industries.  The factory owners were only interested in making money and this acquisitive tendency made them insensitive to the sufferings and hardships of the workers they employed in their factories.  The workers suffered from poor wages, insanitary working conditions, long hours of work, and they were exploited in many and varying other ways.  There were cries for the amelioration of these evils to no avail.  However, some humanitarians carried these cries beyond rhetorics, which led to the beginning of the cooperative movement, and according to Okonkwo, (1979):

The working class had appealed to the government to alleviate their suffering but their pleadings fell on deaf ears…Having got no consolation from government, the workers believed that they could band themselves together and solve their problems.


The year 1884 is generally regarded as a memorable one in the history of the cooperative movement, when precisely on August 15th, a group of twenty-eight working-

class people launched the first ever successful cooperative society in the small village of Rochdale near Manchester in England.  According to Allen (1958), the society was registered as ‘Rochdale Society of Equitable Pioneers’.  Okonkwo (1979) recalls that:

Their cooperative society was a consumer shop. They mobilized capital by contributing few pennies weekly.  They later opened a small consumer shop where they sold goods of high quality and of everyday consumption at reasonable prices which was not possible in other shops in England at that time.


From this beginning and gradually too, the gospel of cooperative societies spread from Great Britain the whole of Europe, America, Asia, Africa and the other continents.


History of Cooperative Development in Nigeria

The history of the cooperative movement in Nigeria dates back to the 1930s.  The cocoa farmers in the then Western Region were organized into miniature cooperative societies.  The Nigerian Government in 1933, appointed a cooperative expert – Mr C. F. Strickland – to study and report on the desirability of establishing cooperative societies in what was then the colony and protectorate of Nigeria and according to Okonkwo (2001), his report in 1934 pointed out that Nigeria was fit for introducing cooperative societies.  It also stated the objectives of cooperatives, the nature of cooperative societies and the types of cooperative societies which were most suitable.

In the year 1935, the Nigerian Cooperative Ordinance was enacted and by 1936, regulations were drawn up to guide the running of cooperative societies.  According to Okonkwo (1979) there were about 181 cooperative societies in Nigeria as at then, and the cooperative federation of Nigeria was formed in the same year.

Until 2002, Nigeria had no cooperative policy in the sense of a formal deliberate official statement accepted and respected by succeeding governments.  The lack of a long standing cooperative policy is evident at both the federal and state levels, but is most noticeable at the federal level on account of its leadership position.  The Nigerian Cooperative Societies Decree 1993, for instance, was passed without a federal policy statement.  As a result of this, the decree was clouded with inconsistencies and contradictions which include a lack of clear definition of the term ‘’Cooperatives’’, absence of vision statement on the goal situation, non inclusion of a report on the state of cooperatives as well as the role of the apex organization, etc.  This has made it pretty difficult to have the needed restructuring effect on the movement.  In fact, the cooperative movement in Nigeria since 1993 has had no sense of direction since no definite goals were set.

Since 1935, Nigeria has had cooperative laws and rules from which an implicit policy may be deduced.  There have also been some policy statements on cooperatives made now and then by Heads of state and state governors on various occasions, especially in annual budget speeches, and more particularly in the development plans of the federal government which have not been backed up with action.    The following extract from the Third National Development Plan (1975 – 1980) illustrates the conception of the cooperative movement by the government:

It is the objective of government during the plan period to foster the growth of cooperatives more consciously as instruments for achieving increased agricultural productivity and rural transformation (FRN, 1974).

What one understands from this kind of fragmentary policy statement is that cooperatives are perceived as government tools for promoting not the objectives of members but rather the objectives of government.  Generally therefore, the cooperative policy in Nigeria has been observed to have been inconsistent with the generally accepted concept and has been applied differently in different regions of the country.

During the military era, cooperatives were remembered at the launching of populist white-elephant programmes such as Operation Feed the Nation (OFN), Better Life for Rural Women, Family Economic Advancement Programme (FEAP), etc.  Under these programmes, cooperative societies were expected to dish out large numbers of registered cooperative societies to benefit from government grants with little regard for due process or quality.  Such cooperatives went moribund with the demise of the regime concerned (Onuoha, (2001).

Nigerian governments have however adopted an implicit policy of active government sponsorship (paternalism) expressed in terms of grants, loans, subsidies, and a willingness to interfere directly in the management of primary, secondary or apex  societies.  This, according to Onuoha (2001) has resulted in a movement that is government led, that is to say, an economic enterprise in which the entrepreneurial initiative rests with government officials.  To Onuoha  (2001) therefore, this is why the movement since 1935 has not made significant impact on the lives of its members as well as the national economy as a whole.  The author concludes that the policy is characterized by government domination, bureaucracy, inefficiency and official corruption, and that this is why government cooperative policy has largely been a failure.  This also explains why the International Labour Organization in Geneva has attributed the failure of cooperatives in Africa to faulty policies and faulty cooperative legislation, that is, an unstable legal, administrative and institutional environment (ILO, 1995).

A good cooperative document must contain a clear definition of the term cooperative, a vision statement on the goal situation and report on the state of cooperatives in the country, the objective of the policy and the role of the national apex organization.  It must also include establishment of a cooperative advisory body to the presidency, principles guiding future cooperative law, role of government and other relevant agencies in cooperative development, as well as progressive de-officialization and privatization of support services.

An expert opines that a national cooperative conference should prepare the draft policy paper which is then presented to the government for adoption (Onuoha, 2001).  A look at the cooperative development policy for Nigeria issued by the federal  ministry of agriculture and rural development in August, 2002 shows that the policy is lacking in most of what is expected in the content  of a good cooperative policy document.  This is a likely indication that the planners of the policy must have been government agents and not necessarily experts on cooperative development education.


The Nigerian Rural Environment

The rural areas have distinguishable characteristics especially when compared with urban settlements.  The Nigerian rural environment is of utmost importance because it is from it that we find a concentration of the farming population which produces over 70 percent of the food and meat requirement both for export and local consumption (Olayide, 1980, Famoriyo, 1995).

According to Ellah (2005), the typical Nigerian rural area is sparsely populated with people settling in hamlets or small villages with low population density of between 50-100/  To him also, rural areas are organized on the basis of kinship or extended family ties with inhabitants, mostly farmers, cultivating different crops that can grow in their ecological zones and also rearing animals suitable to such zones.  They usually rely on simple technology and tools such as machetes, hoes, wheelbarrows, axes, etc in their farming operations.  Rural dwellers are also generally homogenous ethnically and culturally.


The Concept of Integrated Rural Development

Integrated rural development can be seen as a new and broader view which conceptualizes rural development to involve incorporation of the development of the different sectors of rural life that is in turn, intended to enhance the quality of life of the rural people by reducing rural poverty and increasing rural productivity (Akande, 1995). Until recently, rural development had been taken to be synonymous with agricultural development (Akande, 1995).  This is a fallacy because according to her, agriculture is not the only occupation in the rural areas.  As a result of this mis-conceptualization in most independent African States, rural development efforts in most of them have failed abysmally.

Integrated rural development is therefore that approach at rural development which is holistic, meaning that it involves the development of all areas of the rural sector such as health, education, agriculture, rural electrification, housing, water resources, roads/transportation, and other aspects of rural infrastructure in order to make rural life more meaningful and productive.


Role of Cooperative Societies in Integrated Rural Development in Nigeria

The cooperative movement has a major role to play in integrated rural development in Nigeria, given that it is one of the most wide-spread rural-oriented socio-economic development organizations in the country.  This is because true cooperatives can be spring-boards for a people’s own effort in community development.  This is in addition to the fact that cooperatives provide basic training in democratic procedures which are necessary in other phases of rural community development.

In a very broad sense, cooperatives are associations organized by the members to obtain a service or services which could be better obtained as a group rather than individually.  Cooperatives are very relevant to community development because the latter is a total programme involving all aspects of community progress, while cooperative as an extension is an educational service in social and economic progress which can be initially beneficial to cooperative members alone but eventually involve the community as a whole.

In the light of the foregoing, it is clear that the various types of cooperative societies can be used as viable strategies in the pursuit of integrated rural development depending on the objective(s) being sought.  Yahaya (1995) suggests the following areas of emphasis in the approach:

–        Savings and Credit cooperatives:

Generally, the savings and credit cooperative society is regarded as the most basic and necessary form of cooperative especially for the rural dwellers, as well as being the easiest of all forms of cooperative organizations to learn about and conduct.

The cooperative credit society which is the most well known in India (Yahaya, 1995) and several other countries is mainly used as an agency for credit for agricultural production.  The savings cooperative on the other hand has its impact in Canada and the United States of America (USA), where the credit unions are basically savings organizations that depend entirely on the thrift of the members for their resources for lending (Yahaya, 1995).  Most cooperative societies/organizations in Nigeria, including the Benue State University Staff Thrift and Loans Cooperative Society and the College of Education Katsina-Ala Staff Multi-purpose Cooperative Society Limited are savings-based.

–                      Marketing and Distribution Cooperative Societies:

These are generally organized for marketing and sale of agricultural and fishery products and they can also specialize in the procurement of goods such as fertilizer, seeds, fishing gears, etc for primary producers.  They can also engage in the purchase of consumer goods such as food, clothing and household supplies, usually buying in bulk and selling to their members at retail rates.  Their services are most needed in Nigeria today consequent upon the scrapping of the commodity marketing boards by the government.

–        Workers Production Societies:

Workers production societies stress traditional craftsmanship and are usually small enough for each employee to identify himself with the enterprise as a whole and to take interest in its operations.  They sell mostly their finished products to retail societies and divide the surplus between their workers and customers.  This kind of societies are found among leather workers, blacksmiths, carpenters, tailors, etc, which enables the members to obtain machinery and equipment in order to modernize their various trades.  Through their existence and activities, they will not only encourage self-reliance but also provide job opportunities for many of our young school leavers.

–        Community Services Societies.

In many parts of the world, services such as water supply, irrigation, electric power (generation and supply) hospital and medical care, transportation, telephone services, etc, are organized as cooperatives, and according to Yahaya (1995), a famous example was started in Yugoslavia where the government had not provided medical and health services in the rural areas.  The problem was taken up cooperatively where doctors were prepared to work in the rural areas and rural people cooperated to build dispensaries and houses for the doctors and later small hospitals or rooms with a few beds for minor cases.

In Portugal, it is reported that when you ring up for a taxi, you will most probably find out that it is one belonging to a cooperative.  Cooperative electricity supply societies have proved valuable in former Czechoslovakia where they supplied all needed equipment on line or line purchase.  These societies also employed demonstrators and instructors who went round to teach the rural people how to get the best of their equipment and keep it in good serviceable condition (Yahaya, 2001).

Even though cooperatives are organized mainly to serve economic interests of its members, they have certain social or community value that can equally serve the interest of the rural communities.  Thus, according to Ladilow (1962), a one-time FAO consultant on cooperatives, in many cases, rural cooperatives are organized simply to provide a service where none exists; successful cooperatives tend to stop the drain of resources from the rural community; successful cooperatives have given confidence to rural people, especially where they tend to feel dominated by urban influence and urban control; for many rural people, cooperatives have been the principal agency of adult education.



From the discussion in the article, the following conclusions can be drawn:

Cooperatives are voluntary, democratic membership-controlled autonomous organizations which exist to provide services to their members, with the main objective of bringing improvement in the quality of life of the common people, most especially rural dwellers.  Cooperatives do not only have economic benefits but also provide social services, mostly in areas such as education, social development and civil responsibility and it is for all these purposes that they originated and continue to flourish.

The Nigerian rural environment is inhabited by ethnically and culturally homogenous people who are generally sparsely populated and employ simple technologies for cultivation that is mainly aimed at self-reliance, and this makes the rural areas less developed and backward with evidences of mass poverty and income inequality.  This article therefore suggests that Integrated Rural Development which is seen as a comprehensive strategy aimed at a coordinated multi-sectored improvement in different aspects of the rural areas must involve different types of cooperative organizations in order to integrate rural dwellers into national development.

From the perspective of this article also, government is only expected to set the legal and statutory frameworks for establishment and proper functioning of different types of cooperatives which have the potential for actualization of a well integrated rural development agenda.  This it is hoped will reduce rural poverty and enhance rural productivity.



Cooperatives in this country can effectively play their role in national development, especially in rural transformation only when they are properly organized and given necessary assistance by the Federal, State and Local Governments. This assistance should mainly be in the area of establishing the legal and statutory frameworks for proper formation and organization of member-controlled popular cooperative societies.   This will provide a favourable environment under which cooperatives will be practised in accordance with its principles, methods and concepts. The following measures are hereby suggested:

–                      People of the same trade or economic activity should be encouraged and supported to form their cooperatives in order to pool their resources together and share in common services as organized groups, so that they can enjoy government assistance, especially in providing the legal and statutory frameworks for cooperatives to be effectively organized and operated.

–                      Cooperative law and regulations should be reviewed from time to time so as to meet the needs and aspirations of the cooperators.  Such reviews should reflect the economic, social, political and cultural development of our people.

–                       Cooperative societies should commence the process of sponsoring their executive members to seminars and sensitization workshops in order to further enhance their efficiency in managing the societies’ resources.

–                      Cooperative departments or units should be established, beginning from local government departments of agriculture, which should work hand in hand with the State and Federal agencies concerned with cooperative activities to boost the spirit of cooperation at all levels.

–                      The government at Federal, State and Local government levels should engage in an aggressive campaign in order to educate the members and general populace about the contributions of cooperatives to the socio-economic well-being of the common man




R e f e r e n c e s

Akande, E. B. (1995). ‘Some Guidelines for Integrated Rural Development Policy for Nigeria’  In Akeredolu-Ale, E. O. (ed.) Integrated Rural Development in Nigeria: Policy Issues and Options. Ibadan: Spectrum Books Ltd.

Allen, A. (1958). The Cooperative Story, Manchester: Holyoake House.

Ellah, B. I. (2005) Agricultural Extension and Rural Sociology, Ogoja: Sogar Printers and Publishers.

Famoriyo, S. (1995).. “The Role of Cooperatives in Rural Development in Nigeria.’’ In: Akeredolu-Ale, E. O. (ed.) Integrated Rural Development in Nigeria: Policy Issues and Options. Ibadan: Spectrum Books Ltd.

Federal Republic of Nigeria (1974). Third National Development Plan 1975 – 1980.  The Central Planning Office, Federal Ministry of Economic Planning, Lagos.

Federal Republic of Nigeria (2002). Cooperative Development Policy for Nigeria, Federal Ministry of Agriculture and Rural Development.

International Cooperative Alliance (ICA) (1994). A Strategy for Cooperative Development in Africa Part I. Report of a Study Commissioned by ICA Europe – Cooperative Adjustment in a Changing Environment in Sub-Saharan Africa.

Igbo, E.M. (2003). Basic Sociology, Enugu: Cidjap Press.

International Labour Office (1995). ‘Participatory Cooperative Policy Making.  International Labour Office , Geneva.

International Labour Organisation (ILO) (2004). ‘Creating a Favourable Climate for Cooperative Development in Eastern Europe.

Ladilow, A.F. (1962). Training and Extension in the Cooperative Movement. In: Akeredolu, E. O.(1995) (ed). Integrated Rural Development in Nigeria: Policy Issues and Options. Spectrum Books Ltd. Ibadan Nigeria.

Marshall, G. (1998) Oxford Dictionary of Sociology, Oxford, New York, Oxford University Press.

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Okonkwo, J. N. P. (2001). Introduction to Cooperatives, Dulacs Press Ltd, Enugu

Olayide, S. O. (1980). ‘Characteristics, Problems and Significance of Small Farmers’ In: Integrated Rural Development (Olayide, S. O., Eds.). University of Ibadan Press.

Onuoha, E. (2001). ‘Government Cooperative Policy in Nigeria” In: Nigerian Journal of Cooperative Studies, Vol. I,  No. I. Cooperative Research Center, Enugu-Nigeria.

Otite, O. & Ogionwo, W. (1979). An Introduction to Sociological Studies, Ibadan: Heinemann Educational Books (Nig.) Ltd.

United Nations General Assembly (1996) ‘Status and Role of Cooperatives in the light of New Economic and Social Trends’. Geneva.

United States Agency for International Development (USAID) (1985) ‘Cooperative Development’ Bureau For program and Policy, Washington D. C., 20523.

Yahaya, I. (1995) ‘Potential Contributions of Cooperatives towards an Integrated Rural Development, In: Akeredolu, E. A. (1995) (ed.), Integrated Rural Development in Nigeria: policy Issues and Options, Spectrum Books Ltd, Ibadan, Nigeria.

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One thought on “The Relevance Of Cooperative Societies In Integrated Rural Development In Nigeria

  1. Felicitas

    This is a nice article that brings out information about cooperatives in Nigeria, but i really wonder why you are using out dated references. This material is thus regarded as not useful to the academic world. This is 2016 now and at 2014 you still refer to books and articles in 1958,1979. This is sad.


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