OACF mobilises capital for key development projects

The Oromia Agricultural Cooperatives Federation (OACF), founded in May 2009 in Addis Ababa, Ethiopia, began with 40 cooperative unions and an initial capital of 18.3 million Birr. Since then, OACF has achieved remarkable growth, now comprising 68 cooperative unions, over 5,400 primary cooperatives, and 3 million individual members, with capital exceeding 2.5 billion Birr. 

 

Dedicated to enhancing productivity across the Oromia region, OACF imports and distributes agrochemicals and agricultural inputs to both members and non-members. The Federation also produces, collects, processes, and markets various crops—including maize, barley, sesame, haricot bean, and mung bean—for both local and export markets. Currently, it operates two modern facilities: a maize processing plant in Galan and a malt processing factory in Asella, with a workforce of 513 permanent staff and 68 temporary employees.

Recognising OACF’s potential for cooperative development, Agriterra conducted a cooperative assessment in 2023, engaging an Agripool expert from the Netherlands to onboard the Federation. A key action point from this assessment was the need for Internal Capital (IC) mobilisation training. In October 2023, Agriterra facilitated this training for 27 Federation members in Adama, Ethiopia, aiming to support OACF’s ambitious projects, such as acquiring a multipurpose building for offices and meeting spaces, expanding warehouse capacity, strengthening and expanding maize processing facilities, and constructing a modern multipurpose building in Merkato. Following this, OACF successfully achieved its first two objectives, and is now prioritising the strengthening of its maize factories and the construction of a polypropylene (PP) bag production facility and multipurpose building in Merkato.


First round Internal Capitalisation mobilisation training in Adama, 25 to 27 October 2023

A significant milestone in OACF’s journey was celebrated at its Annual General Meeting (AGM) on May 18, 2024, where Agriterra and other development partners joined OACF members to inaugurate the Federation’s new headquarters in Addis Ababa. The AGM also provided a platform for members to review and approve the Union’s audit report, resulting in a unanimous decision to reinvest dividends in key Federation projects. This reinvestment allocated 250,149,336 ETB (~4 million Euros) in dividends, distributed based on share value and member participation levels. Agriterra Ethiopia’s contributions were instrumental, with an 80% attribution rate for the 200,119,469 ETB (~3.2 million Euros) mobilised through IC. In recognition, certificates of acknowledgement will be issued to members, with special commendation for those demonstrating outstanding participation and commitment throughout the 2023/24 fiscal year.

To meet growing demand and following a formal request from OACF, Agriterra delivered a second round of IC training for 11 Federation members from June 2-5, 2024. This training aimed to unify member cooperatives under a clear vision of growth and reinvestment. Representatives from 11 member unions participated, gaining essential insights into how they can actively support the Federation’s development by reinvesting dividends and encouraging other members to do the same. This training has significantly improved cooperative members’ understanding of reinvestment’s role in fostering growth and adoption of these practices across the Federation. To date, 38 members, representing 56% of total membership, have received training.

 

OACF plans to utilise reinvested dividends primarily for establishing a PP bag factory, a multipurpose building in Merkato, maize processing factory expansion, and completing an under-construction warehouse.

 

In appreciation of Agriterra’s invaluable support, OACF awarded a certificate of appreciation, acknowledging the organisation as a vital development partner. Agriterra’s guidance in internal capital mobilisation, along with its efforts to promote seamless collaboration between OACF and government entities, has been crucial to the Federation’s progress. This partnership has not only strengthened OACF’s financial foundation but also paved the way for the successful execution of its strategic projects, ensuring sustainable growth and long-term value for its members.