Contribution of “Cooperatives” and “Enterprise Cooperatives” to the economy of Burundi

The National Communal Investment Fund (FONIC) carried out an evaluation of the “Sangwe Enterprise Cooperatives” throughout the month of July 2021. At the end of this evaluation, 1807 cooperatives out of 2911 in Burundi and which benefited from a government credit of 10 million each, succeeded 62%. However, two cooperatives were unable to use their funding following the closure of CAPEDEBU – a local microfinance.

The financing granted by the Burundian State was 29,110,000,000 BIF or 1,072,652 USD for 2,911 cooperatives or 10 million BIF per year each. However, only 29,038,000,000 BIF were used, ie a percentage utilization of 99.25%. At the end of one year of exercise, the valuation of these cooperatives shows a current holdings of 33,000,000,000 BIF in these companies, or 4,000,000,000 BIF approximately 2,032,500 USD in profit. Before granting these loans to “Sangwe Enterprise Cooperatives”, FONIC explains that it analyzes projects in three dimensions, including economic, social and environmental.

The challenges encountered by these companies are often the vagaries of the weather and the plague. In addition, the lack of a common vision and the interference of certain administrators in their management are part of the handicap they have; some managers having gone so far as to divert the 10 million credit the state had granted to the “Sangwe Enterprise Cooperatives” on each hill for their own purposes. Other challenges are the absence of hill storage sheds for production and surplus yield without a market, the scarcity of veterinary pharmacies, the lack of a written and formal commitment to purchase livestock. The Burundian authorities order them to think about handing over this money under penalty of being sanctioned and sensitizing them to build storage sheds during community works. As for the outflow market, the Burundian government has already found a way out by purchasing the production at a price that encourages agro-pastoralists. Nevertheless, the fear is perceptible in the management of these groups as regards the criminal proceedings in the event of default of repayment.

As for the success factors for these “Sangwe Enterprise Cooperatives”, a leadership of the “Enterprise Cooperatives” up to the task is the involvement of the municipal administration in the follow-up. The support of decentralized technical services, regions favorable to certain cultures as well as a common vision shared and understood in the same way are success factors of the aforementioned companies. Moreover, the members materialize the membership of the cattle in a cooperative as a legal person.

But then, why the “Sangwe Enterprise Cooperatives”? Indeed, doomed to failure in their prescribed missions following non-compliance with the law governing them, “Cooperatives” were abolished and “Cooperative Societies” were created in Burundi. Indeed, the cooperatives suffered from a lack of coordination. While the regulatory texts of the “Cooperatives” focused on the social, the latter in fact engaged in commercial activities with excessive exemptions from the Burundian government, which cost the state a lot of money. In addition, the Government did not have the right to oversee their operation.

All these shortcomings led to the abolition of cooperatives by law № 1/12 of June 28, 2017 to make way for “Enterprise Cooperatives”. The “Enterprise Cooperatives” therefore not only benefit from state aid at the administrative and financial level but also have other advantages since they now operate as companies capable of importing and exporting and of carrying out their own operations. development projects. It is in this logic that the “Enterprise Cooperatives” called “Sangwe Enterprise Cooperatives” were created in Burundi. These are therefore the pillars of development. They are par excellence the node for multiplying wealth on the hills and in the municipalities through agro-pastoral care. They facilitate social cohesion, intercommunal and provincial bartering, the creation of tourism opportunities, the strengthening of good customs and manners which have always characterized Burundian society. It is also a place of supervision and capacity building in telecommunications, design of action plans, modern management of companies, request and repayment of bank loans.

If cooperative societies continue on the same path, no one can doubt that Burundi will experience exemplary economic, social, tourist and cultural development both in the region of the great lakes and in the concert of nations. As well, the vision of the Government of Burundi that the Sangwe Enterprise Cooperatives will contribute to the liquidation of the public debt and Burundi will not show any budget deficit since 2027 according to the projections of the government planners.

By Jean Bosco Ndayizeye, Executive Secretary Burundi

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