Lessons Uganda can learn from Germany cooperatives

In January, I travelled to Germany for an exposure visit on the invitation of the Confederation of German Cooperatives (DGRV).
The German cooperative movement is very organised, with high business turnover and an overall positive impact on members’ wellbeing. However, various factors are responsible for this performance.
Germany is a small and medium enterprise (SME) based economy. In fact, 99 per cent of her enterprises are Germanyrun by SMEs, many of which are cooperatives, contributing 55 per cent of the annual GDP and employing 60 per cent of the country’s labour force.
The structure of the German economy is a key lesson for a young nation like Uganda which is currently grappling with youth unemployment, and efforts to transform the economy from a peasant to an industrial one, have had dismal results so far.
The German labour force is built on a historical national culture of apprentices. Youth from 16 years and above takeoff two to three years from formal education usually after an equivalent of Senior Six in Uganda, into internships, to work and grow their practical skills in particular in fields. After apprenticeship, the youth are awarded certificates of completion.
The apprentice often takes two to three years and thereafter, the youth can choose to join formal employment or continue with academic education – pursue a university degree, among others.
Going through such an elaborate, experiential skills-based learning, young people are better skilled to either work in the very company where they took their apprentice or set up and run their own businesses.
The German Cooperative and Raiffeisen Confederation (DGRV) is an umbrella body for cooperatives in Germany and draws its membership from four large regional federations with a combined total of 19.5 million members. The regional federations provide training, mentorship and coaching services to primary cooperatives. These cooperatives are therefore member-centred organisations, independent of the rather chaotic partisan political interests, like is the case in Uganda.
The resilience of the German cooperatives is quite remarkable, and it is not by accident. It all starts from an elaborate registration process which includes generating a business idea; finding like-minded partners, developing a business plan; drawing bye-laws; holding a founding member’s meeting; paying up initial membership fees and share capital undergoing a rigorous audit by the federation and getting a recommendation before a cooperative can be registered.
The registration of cooperatives in Germany is done at the district court, making it accessible and affordable to everyone in the country. No cooperative can be registered without an approved business plan and audit report from the cooperative federation. This process sets a firm foundation for an effective cooperative with a shared vision from the very beginning.
Nearly all cooperatives in Uganda are registered without any clear business plans rendering them unfocused and dependent on external support.
German cooperatives are self-regulating and self-supervising with no registrar and specific ministry as is the case here. The German government’s focus is on providing an enabling environment that is supportive of the entire economy reinforced by the fact that the notion of cooperation is engrained in the culture and lifestyle of most Germans.
The Confederation of German Cooperatives runs a specialist audit firm – the Genossenschaftsverband Bayern e.V (GBV). By law, every cooperative must register with GBV and undergo regular annual audits for big cooperatives and bi-annual audits for small ones. Uganda can establish a deliberate strategy for building a competent specialist cooperatives audit framework.

The writer is a chief executive officer, Uhuru Institute for Social Development