An Original Investigation into the Determinants of Cooperative Sector Formalisation in Sub-Saharan Africa with Application to Nigeria

A significant proportion of cooperative activity in sub-Saharan Africa occurs informally, outside official registration systems, creating governance gaps, regulatory exclusion, and limited access to institutional support. The determinants of cooperative sector formalisation, including the decision to register and the quality of post-registration compliance, have not been theoretically or empirically investigated in a comparative sub-Saharan African framework with application to Nigeria. This study conducted an original investigation into the determinants of cooperative sector formalisation in sub-Saharan Africa with specific application to the Nigerian context. A comparative political economy analysis and theory-building methodology was employed, combining institutional analysis of cooperative registration systems in eight sub-Saharan African countries, econometric analysis of cooperative formalisation rates across Nigerian states, and grounded theory fieldwork with 45 informal and formal cooperative society leaders from Anambra, Kano, and Rivers States. Institutional analysis identified regulatory burden, perceived formalisation benefits, and social network channels as cross-country formalisation determinants. State-level econometric analysis for Nigeria identified cooperative department staffing ratios, state agricultural sector share, and state human development index as significant formalisation predictors. Grounded theory generated an original Cooperative Formalisation Decision Model capturing the calculative and normative processes through which cooperative groups choose formalisation. The model distinguishes strategic formalisation (driven by access to external resources), normative formalisation (driven by principle acceptance), and coercive formalisation (driven by external regulatory pressure) as distinct formalisation pathways with different compliance implications. The study constitutes an original contribution to cooperative institutional economics.

Keywords: cooperative formalisation, institutional economics, Sub-Saharan Africa, Nigeria, grounded theory