Chapter 8 - Cooperatives in Sub-Saharan Africa

Abstract

Agricultural cooperatives are important institutions in agricultural development in sub-Saharan Africa (SSA). Cooperatives comprise individuals who have pooled resources to provide input, output, and capital resources to members at a low cost. Major agricultural cooperatives include production and marketing cooperatives, poultry and livestock cooperatives, fishing and fish marketing cooperatives, and food processing and marketing cooperatives. The economics of cooperatives is based on Coasian theory. Cooperative governance structures solve information asymmetry and monitoring problems encountered in agency relationships such as the free rider problems that arise when property rights are poorly defined. The cooperative form of organization is also effective in reducing the transaction costs associated with contracting because members operate within mutually agreed rules. Court cases involving cooperatives in SSA have focused on government interference in the activities of cooperative movements in SSA.