Economic & Entrepreneurial Cooperatives

Supporting a Village in Ghana

The University of Utah has partnered with Kwame Nkrumah University of Science and Technology (KNUST) and Komfo Anokye Teaching Hospital (KATH), in Kumasi, located in the Ashanti region of Ghana, to support members of a nearby village, called Barekuma, in their development of five acres of unused village land into an orange grove. The sale of the oranges will supply the village members who participated in the program with a much-needed source of income. This income would provide participating members of this village with access to better water, food, health services and education resources. In addition the project intends to build human capital in health, financial management as well management of natural resources through its cooperative and other educational efforts which ultimately will make the community self sufficient and eliminate or reduce their dependence on external interventions

Not Seeking a Donation

The program got underway after a local doctor made a small loan to the village that was repaid, once a maize crop was harvested. The village members wanted to expand into growing citrus and they were not seeking a donation. Instead, they were struggling with the challenge of securing a larger loan from a bank to cover startup and early maintenance costs associated with the grove.

Building a Cooperative

The University of Utah met with the agriculture council in the village to identify the issues that would be critical to the success and sustainability of the project. To garner long-term support from local partners in Ghana, the University of Utah turned to members of the faculty of Agriculture at KNUST as well as existing support from KATH. One member of the KNUST faculty volunteered his time to support this project. He identified the need to establish a cooperative organization within the village to facilitate the equitable distribution of the proceeds from the project to the members of the village who participated. The village cooperative organization has been established. It consists of approximately 60% female participation.

Writing a Business Case

KNUST graduate students have authored an initial and updated Feasibility Report on the Establishment of the Citrus Plantation (a business case). These reports overwhelmingly concluded that this project makes economic sense. Considering the analysis done by KNUST, the project required initially between US $2,000 and $5,000, taking it into the realm of a small business or enterprise loan.

Assessing Success To Date

Despite a long history of non-repayment of loans in this area, the University of Utah was able to develop a structure for the loan that met the initial needs of all the parties involved. This structure will be used to create a revolving “Barekuma Collaborative Community Development Project (BCCDP) Economic Development” fund in this area. The bank has issued the initial loan. The land has been secured and cleared. More than 700 orange tree seedlings have been acquired and planted. The current estimate is the loan will be fully repaid in 2017 (eight years from the initial grant).

Stimulating Entrepreneurship

To the extent that this plantation is successful many of the members of the cooperative have indicated that they intend to use the funds they receive, in part, to start their own citrus groves and sell the oranges for a profit.

Seeing the Current Opportunity

Changing market conditions have led the members of the project to evaluate building a processing plant that would bottle the orange juice from the oranges in this grove - which would offer the possibility of real, sustainable economic growth in the area. The internal rate of return and the overall profitability of the project are dramatically improved with the addition of the bottling plant. As the loan is repaid, funds recouped will be re-invested in the local community via the BCCDP Economic Development fund.

What This Will Mean

With the addition of these monies to the revolving fund, the Barekuma cooperative would be able to borrow (and repay) funds to build a processing plant that will bottle juice from not only their own oranges trees, but oranges produced in the nearby villages and private groves. This will create a dramatic new source of income for the local economy, generating sustainable economic growth and creating a demonstrable model of loan repayment. Once successful, this model could be used with other villages and in other regions in Ghana.

Program Director

Brian Y. Rivette is the President of Focal Concept, Inc. a Salt Lake City based firm that offers consulting in Intellectual Property licensing as well as international strategy development. In 2010 he joined the International Advisory Board to the University of Utah. He was formerly the President and Chief Operating Officer of A2D, L.P., an intellectual property licensing firm based in Los Angeles. A2D, L.P. has licensed the technology in its portfolio of telecommunications patents to over 250 of the nation’s largest and most technologically sophisticated companies. Mr. Rivette helped found the company in 1994. Prior to that, he was Vice President of Marketing and Government Affairs for Call Interactive, a joint venture of AT&T and American Express Information Services Corp. Mr. Rivette has held a number of sales and marketing positions in the telecommunications and pharmaceutical industries. He is an avid jogger who enjoys traveling overseas, multimedia creation and oil painting.