The Role Federal Government in Co-operative Development in Nigeria


This chapter deals with different views given different views given by different authors on co-operative societies.

According to Benson Nnadozie and Luke Nwana co-operative society is a trading organisation where various entrepreneurs or co-operatives pool their resources together with a view to making profit.  For example, farmers may pool their resources together to and share items of capital equipment that they cannot afford to buy individual. They can as well pool their resources together to purchase essential commodities especially during the period of global inflation.

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Furthermore Mr. P.N Edoga in his book tittle “Co-operative Operation and Administration”, defined a Co-operative society as an association of consumers, or retailers or wholesalers with similar products, services or formed to obtain greater bargaining power ad other economic of scale.

In addition D.  J. Aderson in his book tittles “Commerce for west Africa, defined a Co-operative society as an association of people with similar interests and they provide services to their members.  The profits are divided among the members in population tot her use each member has made of the society’s services.


          The enactment of the first Co-operative societies’ Law in  Nigerian in 1935 was as a result for the report on the introduction of Co-operative societies into Nigeria submitted on 17th April 1934, by C. F. strict land.  It was known as  the co-operative societies ordnance No.6 of 1935.  C. F Strict Land appointed in 1933 by the them government of the colony and protectorate of Nigerian, and requested to advice it in the possibility of introducing co-operative societies in Nigeria.

Following the submission of this report, the first co-operative societies law was enacted in 1935 and fashioned after the co-operative society law operating at that time in India. At the time, the co-operative societies in Nigeria on which experience could be based for formulating the law, except association  of farmers organised by the department of agriculture for the training of cocoa farmers to terminate their cocoa beans correctly and to market the product.  The law was, therefore, essential by based on the experience of he co-operative Societies in India.

The Co-operative societies ordinances was amended in 1938, also in1945 and completely revised in 1948 to conform to the British secretary of states circular dispatch of 1946 which laid down the co-operative law of all the British territories.  This revised co-operative law was included in the manual for co-operative law and practice by Surridge and Digby.  As from 1952, when Nigeria was divided into three  regions, each of the region began to see its own co-operative societies ordinance of 1935 and from then, Co-operative matters became exclusive subject and responsibility of the regions.

Western region of Nigerian came up with its co-operative law in 1953, eastern region, and northern region enacted their own law in 1956 and Lagos which became a Federal territory in 1958 has its own supervision of co-operative societies within the Federal territory of Lagos.

Each region appointed its own registrar of Co-operative societies and the then registrar for the whole country became an adviser to the three regions for a short time before the past was scrapped because of its redundancy.

Following the creation f 12 states in 1967, the laws in the former regions were adopted by the states created out of the three former regions, of course the then mid-Western region had already adopted the Western laws of 1953 since its creation as a region 10 years later.

Lagos State took over the responsibility for co-operative matters for Lagos in 1968 and by so doing adopted the 1958 law formerly applicable to the federal territory of Lagos as their co-operative laws.  Consequently co-operative matters are completely taken over by the 12 states, thus creating a vacuum at the federal level. Many subsequent conference of chief registrar of Co-operative societies and meetings of member of the co-operative societies movement the whole federation indicated the need for the federal government to take more effective role in co-operative development.

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A meeting of both the Co-operative federation of Nigeria and the conferences of commissioner responsible for co-operative matters throughout the federation Charmand by the then federal commissioner for labour considered the views of the Clict registrar and co-operative movement and made recommendations that the establishment of a co-operative dimension at the federal level was a desideratum if the pace of the co-operative development in the country was to be accelerated to meet the aspirations of the federal government and the yearnings of government.  Due to rapid economic and social development in the country  pertaining to co-operative the need for the establishment of national character was soon realized it thus became necessary.



  • Registration of national Co-operative organization
  • Registration and supervision of inter-state Co-operative organizations.
  • Registration and supervisor of national co-operative societies such as the police Co-operative societies which is nation-wide primary society.
  • Arbitration of disputes between national co-operative bodies and
  • Division, almagamation and dissolution of national co-operative division in the Federal Ministry of labour, and appointment of a Federal registrar of Co-operative societies and supporting staff was made. The division was charged with the following responsibilities:-
  1. Co-operation of inter-governmental and inter-state co-operative activities.
  2. Formulation of a board of national economic policy for co-operative development and financing, and the integration of a co-operative policies into national development plans.
  3. Supervision of national co-operative societies and implementation of development policies relating to national co-operative projects.
  4. Disbursement of Federal and foreign assistance to Nigeria Co-operative movement.
  5. Liason with federal economic institution and representation of co-operative interest at inter ministrial meetings.
  6. Relation on Co-operative matters with central labour organizations and similar bodies especially in matters relating to jointly sported welfare scheme.
  7. Co-operative of research into co-operative problems.
  8. Compilation of information on all matters relating to co-operative developments.
  9. Co-ordination of publicity on co-operative matters and preparations of reports on Co-operative development in Nigeria.
  10. Co-operative Education and training at national Conferences and seminars on C0-operative matters including visits by representatives of foreign Co-operative societies and bodies.
  11. Establishment of a national advisory council for Co-operative development. In 1976, the Co-operative and social development (Transfer of functions) decree No. 28 of 1976 which took effect from 1st July, 1975 was promulgated transferring the functions of the co-operative development division from the federal ministry of labour into a newly created federal Ministry f co-operative and supply and amending section 2 (c ) of the Decree No.5 of 1976 to include “registration and supervision of national Co-operative societies.



The appointment of a panel to review the Co-operative principles, Laws and regulations in Nigeria was necessitated by representations from Co-operative movement, conference of Chief registrars and commissioners responsible for

Co-operative societies, made to the federal government, stating among other things the following reasons to support  the need for the review of the existence co-operative laws and policies

  1. Absence of clear-out policy on co-operative and wrong nations of co-operatives as an organization of “Little men”.
  2. In early 1930s when the movement was established agricultural making and credit societies where predominant, but gradual and remarkable increase in co-operative societies and diversification of their activities made it necessary to call for reviews on the existing co-operative laws and policy to meet the needs of the increase number of co-operatives and their diversified activities.
  3. Since 1935, when the first co-operation ordinance was promulgated under the colonial administrations, no significant and realistic steps had been taken in the country at the national level to harmonies the laws along the lives of the fast developing economy such as ours.
  4. After well over 40 years of introduction of co0operatives formally into Nigeria a review of the co-operative laws and evolution of an articulated and government oriented policy for co-operative is long over due.
  5. Experience of co-operatives in this and other African countries makes it necessary to complexly overhaul and streamline the present co-operative laws and policies in the light of our changing economic and political    Following the above representations and submission from the co-operative circle which were in line with the federal government policy of mobilizing the country to the grassroots level for even development through the co-operative a twelve-man Panel, healed by M. T carton – Idewu, was appointed on the 2nd August 1977 to review the entries existing co-operative principles, laws and regulations in Nigeria.
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The panel was given the following terms of reference.

  1. To review the existing co-operative societies laws in Nigeria with particular reference to the restrictions imposed by the laws on establishment and operations, of the co-operative societies and whether such restrictions constituted constraints in the growth and development of Co-operative movements in the federation.
  2. Arising from (i) above, the panel should suggest suitable amendments for the formation of an all embracing co-operative societies decree applicable throughout the federation so as to foster the achievement of the national objective of using the co-operative movement as a vehicle of social and economic development at the grassroots level in the whole federation.

The policy guideline should include but should not be limited to the following areas:-

  1. The structure of the co-operative organization from primary to the apex levels including the merits or otherwise of multi-purpose organizations vis-à-vis single enterprises organizations.
  2. The desirable relationship between co-operative organizations at primary, secondary, state apex and national levels.
  3. The role of the federal government in the development of co-operation movements and the channels of communication between co-operative organizations at state and national levels on one hand, foreign governments and institutions on the other.
  4. Identification of areas of involvement of co-operatives ie the projects and programmes in which the co-operative movement could be effectively utilized agents of development.
  5. Examination of the rules of the existing co-operative banks especially their contributions towards co-operative development. If undesirable alternative system of running co-operative banks should be suggested as well as recommendations on what should be done with the existence co-operative banks.
  6. Determination of the roles and structure of the new national co-operative organizations eg the Nigerian National Co-operative whole sale association Ltd (NCWA). The co-operative federation of Nigeria (CFN). The national co-operative insurance society of Nigeria (NCISN).   The national association of co-operative credit union of Nigeria (NACCUN) and the way the  could best be mobilized towards the rapid development of the co-operative movement in the country.

In this regard, the panel will study the present membership, and shareholding and representation in such a national organization and recommend the procedure and regulations (bye-laws) for guidance in setting hen up with a view to ensuring that such organization maintain a national outlook and character.

  1. A review of the functions and membership of the national advisory committee highlighting how it could be made more effective of if it should exist at all.
  2. A review of the suitability and standards of the curricular of various courses conduces by the federal and state co-operative collages and institutions is with a view t harmonizing syllabus ands gearing them to task of acceler.
  3. Determination of the most effective approach and methods of carrying out mass enlightenment and the mobilization of Nigerian to participate in co-operative movement and suggesting incentives that might be applied towards achieving the objectives.
  4. A review of the general attitude of Nigerians towards individuals business and firms ownership of uncalculating in Nigerian, co-operative attitudes to business and farm enterprises throughout the country.
  5. A review of the achievement of the existing co-operative industries in Nigerian and recommendation of the methods of making them viable competitive.
  6. Finally, the panel would examined all other factors that affect the growth of the co-operation movements in the federation and recommend the removal of these factors and constraints that tend to retard the acceleration of their growth.
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The panel was inaugurated on the 2nd Aug, 1977, by then honorable commissioner  for co-operative and supply, Alhaji U. A Mutallah, at the conference room of federal ministry of co-operative and supply. New secretariat, Ikoyi. In this inaugural address the honorable commissioner said inter- alia. ……in this connection, it is pertinent to not that although legislation has to be restored to as a way of matching our needs to modern day demands, it is a stark fact that since 1935, when the first co-operative ordinance was promulgated under the colonial administration no significant and realistic steps had been taken in the country at the national level to harmonize the laws along the lines of the fast developing economy. I believe you all agreed that after well over 40 years of introducing of co-operatives into this country a review of the  co-operatives laws and evolution an articulated and oriented policy are co-operatives is long over due”

The working materials of the panel were gathered form four principal sources, states tours, memoranda, overseas tour and meeting of panel.  The report of there panel has since been submitted tot he federal government in December 1997, which resulted in the federal government wile paper of 1978.


In line with the panel’s recommendation the federal government has accepted to promulgate an all embracing co-operative societies legislation applicable throughout the federation with provisions.  Setting out the roles of federal and state government in co-operative developments, the extent of the independence of the co-operative movement, types and functions of co-operative organizations and the structures of the co-operative movement.

The government has also directed the Attorney General of the Federation to take steps to amend decree of 1974, accordingly. The Attorney General and the Commissioner for justice has also been directed to prepare a “Model edict” for adoption of by states in order to ensure some measure of unism in the co-operative measurement in the federation.

It should be noted at this juncture that since the report of the panel was submitted and the subsequent government white paper on it, no concrete effort has been made on the part of the government to get the recommendations implemented.  And not until this is done, there will be still remain a vacuum of all-applicable throughout the federal republic of Nigerian that is in line with our fast drying socio-economic and political society.

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