Full Project – Cooperatives – an effective tool for employment creation and economic development

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CHAPTER ONE

1.0 INTRODUCTION

In Nigeria, there are approximately 192.443 cooperatives up to May 2012 with a total of 33.68 million members or 14,14 percent of the total population. Most of these cooperatives (around 70 percent) are located in rural areas. The cooperative movement in Nigeria is considered as one of the largest civil society organizations as well as social enterprises with great potential in rural development and employment creation.

In responding to the increasing role of cooperatives in poverty reduction and economic as well as social development, the international labour organization (ILO) in collaboration with the ministry of cooperatives and agricultural scheme and Allianz, a private insurance company, will organize a one-day seminar titled ‘reducing poverty and creating jobs through cooperatives” on Tuesday, 12 June, 2004 agriculture, at Jakarta. The seminar is conducted in conjunction with the commemoration of the international year of cooperatives.

The seminar will be officially opened by HE. Dr. Syarief Hasan, minister for cooperatives and agricultural scheme, Handojo Kusuma, vice president director Allianz life Nigeria, and Peter Van Rooij, country director of the ILO in Nigeria. The seminar is aimed to raise the awareness of cooperative values and principles as well as the important roles of cooperatives as an alternative means of doing business.

In addition, the seminar brings together national, provincial and district governments, together with social partners, and identify how they can work together to develop effective strategies and generate better policy recommendations to enhance contributions of cooperatives to socio-economic development in Nigeria.

“They year of 2012 is an important year for the cooperatives. I greatly welcome the organization of the seminar as it is in line with the government’s goal and programme to revitalize and improve the cooperative movement as the small and joint business ventures are the key to boost the economic growth that, in turn, will reduce poverty and create more job opportunities,” said HE. Syarief Hasan, Minister for cooperatives and agricultural scheme.

Allianz life in collaboration with Allianz Peduli Foundation, ILO, and Ministry of cooperatives and agriculture have decided to improve risk protection services and financial literacy for unbanked, low-income groups by enabling cooperatives to serve as partners for insurance provides and by providing training on financial education. By working with cooperatives, Allianz with explore the market potential to micro insurance products and gain insight in the insurance needs from selected cooperatives.

To empower the selected cooperatives as its partners, Allianz life will equip them with knowledge through class-training on how to distribute, manage and administer insurance products and prepare cooperatives to be a competent partner of private insurance providers.

The international year of cooperatives is declared by the United Nations to draw attention to and encourage action on major issues. The year is intended to raise public awareness of the invaluable contributions of cooperative enterprises to poverty reduction, employment generation and social integration. The year will also highlight the strengths of the cooperative business model as an alternative means of doing business and furthering socio-economic development.

1.1 BACKGROUND OF THE STUDY

With the increasing and persistent rate of unemployment in Nigeria with the constant outflow of young graduates from higher institution and no corresponding job opportunities (especially white collar jobs which most youths anticipate) there is need for alternative source of employment which the banks, industries, government, ministries and parastatals, oil company etc are not sufficient to provide. In talking about alternative source of employment we have the skilled jobs-carpentry, mechanic, tailoring, etc but by interest centers on co-operative as a means of employment creation.

Co-operative which by definition is an association of persons united voluntarily to meet their common economic, social and cultural needs through a jointly owned and democratically controlled enterprise. Going by this definition we see that these persons which have a common felt using co-operative societies as a tool for raising the economic standards. The people especially those in the rural areas who are those most hit by the unemployment pandemic. We also must consider the fact that when there is employment opportunities there is an improvement in the standard of living hence economic development.

It is based on this that the researcher decided to write on “C-operatives an effective tool for job creation and economic development” to show case how co-operative has over the years tried to improve the socio-economic level of the people.

1.2 STATEMENT OF THE PROBLEM

Having said the co-operative is an organization that is aimed at promoting the economic standards of it members. The question now is how many activities do co-operatives engage in that will be enough to reduce unemployment as one would expect? Although co-operatives may have various aspects that they get involved another issue is how much money do they generate as surplus to share out to members? And this money given out as surplus is enough to sustain the co-operator and his family thereby raising his standard of living which means economic development.

Another issue is how much support does the co-operative receive from the government by way of grants, education, advice, finance to help reduce some of the constraints faced by the society in its bid to help reduce unemployment.

Having said all this the question is can co-operatives truly generate employment opportunities which will lead to economic development. This research will therefore help to answer this question.

1.3 OBJECTIVE OF STUDY

The objective of this research includes:

To identify how co-operatives organization can create employment opportunities to members of the society.
To determine how this job opportunities created and co-operative business can enhanced economic development in Nigeria.
To identify the constraints encountered by the society in achieving this aim.
To identify the role of government in helping the society solve these problems and its role helping the society to achieve the aim of creating employment opportunities.
To ascertain if people are award that co-operative societies can create jobs.
To make recommendations.

1.4 RESEARCH QUESTIONS

What is the role of co-operative in employment creation?
How can co-operative organization enhance economic development?
What are the problems faced by co-operatives while performing its role?
What are the possible solutions to this problem?
What is the role of government in enhancing the growth and progress of co-operative?

1.5 SIGNIFICANT OF STUDY

Co-operative business is the route to ownership of capital and small scale business and like wise participation towards the economic and industrial growth of the nation. Hence I am sure this research is important to:

Individuals who are not aware of the employment creating potentials of the co-operative organization.
To the co-operative societies and co-operators to be aware of the job opportunities available in a co-operative society and how the society can use it to its advantages.
To the Nigerian government as it affords it the opportunity to appreciate the problems facing the establishment and how and what aspects to support the society so as to enhance economic development through its activities.

1.6 SCOPE OF STUDY

There are various ways through which employment could be created but our attention in this study is focused on co-operative as a tool for employment creation. And the area of study is Ibesikpo Asutan Multipurpose co-operative Society Limited, Akwa Ibom State.

1.7 LIMITATION OF STUDY

Since the area of study is only a co-operative society it may not have adequate data as should be. Another is how much information members of the society are ready to increase and also as a limitation is finance.

1.8 DEFINITION OF TERMS

Economic development: This is the process of change in the society which leads to an improvement in the standard of living and welfare of the masses of the people.

Employment: This is the situation in which people work and are paid.

Co-operative: This is an association of persons united voluntarily to meet their common economic, social and cultural needs through a jointly owned and democratically controlled enterprise. The society as a matter of fact must be registered.

Business: Which can be classified under corporate or incorporate can be defined as a series of activities engaged in which yields profits.

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