Abstract

This study proposes the use of the cooperative model as an alternative strategy for rural development in Kenya and Tanzania. Failure of prior models and the misuse of foreign aid in these nations lead to this proposal. The research’s theoretical framework is grounded on the neoclassical economic theory. Core questions asked included but, were not limited to: finding out the types of policies implemented the role of the cooperatives in job creation and poverty reduction, the status of cooperative education and finances, the status of poverty in both nations and many more. Peter Warbasse, Adam Chambo and other proponents of the model reaffirmed the important role played by cooperatives and advocated for policies which uplift ordinary citizens from dependency to selfreliance. In Kenya, data came from the ministry websites, the ministry headquarters and its affiliates. In Tanzania, data came from the ministry’s websites and from a visit to Moshi University College of Cooperative and Business Studies research center in Moshi. The research found that in 2008, Kenya had 8,507,000 cooperative members while Tanzania had 1,600,000. Primary cooperatives alone had created 300,000 jobs in Kenya and only 34,524 in Tanzania. Indirect employments were 303,455 in Kenya while Tanzania had no figures for indirect employment nor for the total jobs created in the same year. Cooperatives created 3,445 jobs within Kenya’s government offices and their affiliated institutions versus Tanzania’s 425. The big disparity between the two nation’s data is bewildering as discussed. The policy analysis supports the hypothesis that indeed, both nations had indeed implemented policies to support their cooperative organizations right from independence but, especially to rescue these organizations from the International Monetary Fund’s Structural Adjustment Program Mandates. Most of these policies had been formulated in accordance with the United Nation’s Millennium Development Goals which strives to reduce poverty in the less developed nation by half by the year 2015. Study limitations included but were not limited to: bureaucracy, partial and unavailability of research data. There is optimism in the future of these organizations as evidenced by the latest cooperative policies which focus on improving both nations’ rural development