Ghana

Legal framework

 

The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for Ghana.

 

 

Cooperatives in Ghana are highly regulated by the government through the Department at Cooperatives (DOC) which is a Department under the Ministry of Employment and Labour Relation (MELR) and a government institution. The regulation of cooperatives was found in the National Liberation Council Decree (NLCD) 252 of 1968 which occurred during a Military Regime. 

 

The National Liberation Council Decree 252, the Legislation Instrument 604 and Cooperative Credit Union Regulation 2015 are the only laws for cooperatives that operate in Ghana.

 

The NLCD 252 did not explicitly introduce the ICA principles of cooperatives. It was section 3 of the NLCD 252 that made mention of cooperative principles but did not specify which. The ICA principles of cooperatives are implicitly introduced in the by-laws, but some rights and privileges have been taken away from cooperatives. Autonomy and independence within the ICA principles of cooperatives are not totally enjoyed by cooperatives, due to over-regulation by the Department of Cooperatives.

 

Cooperative friendliness

From the view of ICA contributing member organizations, the NLCD 252 of the Cooperatives in Ghana is more cooperative unfriendly than friendly. Some of the concerns of cooperatives include: over regulations by the registrar, the law does not strengthen the financial and managerial competence of cooperative and does not create an enabling environment for cooperatives to operate as a private sector organization.

 

Key recommendations for improvement

In other for the national legislation to be more adequately for cooperative development, there should be a new co-operative law which will seek to address the following hindrance in the NLCD 252 of 1968;

  • Reduce the powers of the Registrar.
  • Recognize the ICA principles
  • The supervision of cooperatives should be a joint responsibility of the department of cooperative (Government Agency) and the Council (Cooperatives Apex Body).
  • Specifically defined the functions of the Registrar of Cooperatives.
  • Annual General meeting should approve their annual budget and accounts.
  • A cooperative may engage a private firm to audit their accounts if they have the resources.
  • The establishment of central finance facility on behalf of cooperatives and co-operative development funds for education and training of cooperatives and also promotion of cooperatives.

 

Conclusions

Cooperatives have existed since pre-independence Ghana. Some cooperative members over the years have seen their lives impacted positively through cooperatives. However, the benefits remain underwhelming as millions of people, especially small holder farmers and local workers, continue to grapple with economic challenges that a well organised cooperative sector could mitigate.

The national cooperative law is archaic and only sought to serve the purpose of a military regime at the time when it was promulgated. A reform of the law is imperative to trigger the needed positive impact that the cooperative model can have on its members.

 

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