District Based Organizations
Informal farmer-based organizations, groups of women, sports teams, and other groups in local communities undertake activities for the benefit of local communities, such as building and maintaining new schools, feeder roads, health clinics, or soccer pitches. With the backing of various donors, the Government of Ghana wants to support groups of citizens in local communities to plan, construct, and manage rural infrastructure, such as a local marketplaces for farm products, boreholes for water, or irrigation schemes. Finally, many groups in villages and rural areas engage in for-profit activities, such as operating a warehouse, plowing fields for a fee, or operating a fishing boat.
For these activities to be conducted on a sustainable basis, on a significant scale, or by a large number of people, these grassroots groups should have legal existence and an established structure – e.g., the right to maintain a bank account, hire employees, rent space, access credit, seek grants, etc. In addition, they need clear rules for determining membership, for self-governance, for financial management, etc. Just like legal entities formed in the ways permitted by current law, these District based corporations need to have perpetual existence, limited liability, and the right to sue or be sued in their own name. The self-governance and management structures inherent in a legally registered entity will increase the capacity, effectiveness, and accountability of community groups. In short, to meet the needs of the people, it should be possible to establish a legally recognized District-based corporation at the village level, either as a for-profit corporation (DC-F) or as a not-for-profit corporation (DC-N).
At the current time, however, the procedures for establishing a legal entity – e.g., a cooperative, a company with shares, or a company limited by guaranty – are complicated, time consuming, cumbersome, and often require legal assistance and/or going to Accra.
This project, which has been contracted to ICCSL, involves developing forms, instructions, and other guidance for setting up DC-F’s and DC-N’s at the District level. The goal of this project is to make it possible for any group of people to be able, quickly, easily, and inexpensively, to create a legally-recognized corporation in the District where they live. The procedure for creating a District-based corporation will be completed using model documents and filling out simple forms.
The drafting has been completed, and the process is being tested in two pilot districts. Changes and improvements will be made in light of what is learned from these pilot projects, and national legislation will be prepared to enable district based corporations to be established in each of the 138 districts in Ghana.
Many ethnic groups in Ghana have long traditions of working cooperatively in agriculture and at the village level through traditional organizations, such as “nnoboa” groups. Co-operative societies as known in the United Kingdom were introduced in Ghana in the 1920’s, but they were not given legal recognition until promulgation of the Co-operatives societies Ordinance in 1931. This law was substantially revised in 1937. The Department of Co-operatives was established in 1944.
At the bottom of the Co-operative movement in Ghana are primary Co-operatives, which are normally single purpose or single crop Co-operatives. Most primary Co-operatives are small. They are active in most areas of economic activity, and fewer than half of Co-operatives are engaged in agriculture.
Virtually all primary co-operatives belong to district, regional, and/or national associations of co-operatives, normally according to their type of activity – e.g., credit unions, distillers, etc. Examples include the Ghana National Association of Farmers and Fishermen and the Cocoa, Coffee and Sheanut Farmers Association (“GNAFF”). A 1997 decision of the Supreme Court of Ghana, however, emphasized that co-operatives enjoy the freedoms of association and of non-association, and cannot be required to belong to a district, regional, or national association of cooperatives.
Between 1990 and 2001 15 sub-Saharan African countries adopted new co-operative laws. Others have substantially amended existing legislation, and many more have elaborated drafts for new co-operative legislation. Reform of the law for co-operatives in Ghana is clearly timely. In almost all cases the reforms have been aimed at giving co-operatives greater independence and autonomy. Another trend in the law reform movement in Africa has been to make affiliation with secondary and tertiary co-operatives optional and voluntary. This change is consistent with the general policies of deregulation, privatization, and liberalization that have been adopted by countries throughout Africa as well as in the rest of the world. Because they provide mechanisms for horizontal and vertical integration, however, co-operatives are effective mechanisms for combating many problems caused by globalization. Integration allows co-operatives to combine their strength as locally-rooted organizations with the advantages of large-scale enterprises.
The Co-op Policy Statement specifically identifies “cumbersome laws and regulations” as a significant reason for the current weakness of the co-operative movement in Ghana. The Department of Co-operatives is housed, has undertaken a review of laws and regulations governing co-operatives to remove clauses that are inimical to the development of co-operatives and other informal groups. The Attorney General’s office has commented extensively on the draft legislation, and there have been several conferences to discuss and debate the issues.
The Ministry of Food and Agriculture has contracted with Dr. Leon E. Irish of ICCSL to provide and evaluation of the current Ghana Co-operatives societies Decree, the draft Co-operatives Bill (“Co-op Bill”), the Attorney General’s comments, and to prepare a final draft for presentation to parliament.