the role of cooperatives as engines of social economic development in the south african rural...

THE ROLE OF COOPERATIVES AS ENGINES OF SOCIAL ECONOMIC DEVELOPMENT IN THE SOUTH AFRICAN

RURAL COMMUNITIES.

BYNndwakhulu Lawrence Bale

Presentation on the South African National Apex Co-operatives (SANACO)

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OUTLINE INTRODUCTION

THE STATE OF COOPERATIVES IN SOUTH AFRICA

THE ROLE OF COOPERATIVES IN PROMOTING SOCIAL ECONOMIC

DEVELOPMENT.

• THE ROLE OF COOPERATIVES IN PROMOTING SOCIAL ENTREPRENEURSHIP AT

GRASSROOTS LEVEL

THE ROLE OF SOUTH AFRICAN NATIONAL APEX COOPERATIVE (SANACO)

CONCLUSION

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OUTLINE

SANACO – means South African National Apex Co-operative It is a national representative body of cooperatives in South Africa It is a member of the NEDLAC It has Provincial and Municipal Structures throughout the country Initiated the formation of the SADC Cooperatives Federation

launched in March 2011 A National Launch was held on 01st October 2009 in Johannesburg

were the leadership was elected to serve a five(5) year term. SANACO is a registered as an Apex with the Registrar of Co-

operative at CIPC in terms of Co-operative Act, Act No. 14 of 2005

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INTRODUCTION

The majority of the rural communities are facing hardships, unemployment and poverty and hence

the government’s decision to make ‘coops’ as agents of social economic development.

• The South African government decided during the Presidential Growth and Development

Summit held in 2003 to endorse special measures to support cooperatives as part of strategies

for job creation in the economy.

The majority of the rural communities are facing hardships, unemployment and poverty and hence

the government’s decision to make ‘coops’ as agents of social economic development.

• The South African government decided during the Presidential Growth and Development

Summit held in 2003 to endorse special measures to support cooperatives as part of strategies

for job creation in the economy.

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INTRODUCTION

In 2008 thedti convened an International Cooperative Week Conference

During the conference the a Steering Committee representative of all the country’s Provinces

The mandate of the Committee was to revive the cooperative movement by establishing a Tertiary/Apex Cooperative

The 2008 Conference adopted a bottom up approach to build the Apex as a result;

the Steering Committee embarked on an intense programme throughout the country’s municipalities mobilising all cooperatives

This therefore led to the formation and registration of SANACO as the Apex body in line with the 2005 Coop Act.

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In order to address the high rate of unemployment and poverty, the government came up with the concept of

“Vukuzenzele” which implies that people must be initiative and do things for themselves instead of

waiting for “hand outs”.

This paper is addressing the role of cooperatives in enhancing social economic development (LED) in the

rural South Africa.

order to address the high rate of unemployment and poverty, the government came up with the concept of

“Vukuzenzele” which implies that people must be initiative and do things for themselves instead of

waiting for “hand outs”.

This paper is addressing the role of cooperatives in enhancing social economic development (LED) in the

rural South Africa.

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• In 2004 the new democratic government launched the

Cooperatives Development Policy and later in 2005

promulgated the cooperatives Act, No. 14 of 2005 as amended.

• In 2010, the Department of Trade and Industry launched the

Integrated Strategy on the Development and Promotion of

Cooperatives which sets out an implementation framework of

the policy and the Act.

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Common challenges facing cooperatives are;

• Lack of critical management skills

• Limited cooperation among cooperatives

• Limited access to finance and markets

• Lack of compliance with legislation

• Lack of monitoring and evaluation

• Limited access to technology

• Limited promotion and awareness

• Inadequate economic and social impact

• Poor management and technical skills

• Limited trust and social cohesion

• Underdeveloped network and economic values chains

• Is to facilitate and contribute to co-operative development and the consolidation of a progressive, strong, vibrant and sustainable through partner and other means that could assist in the development of cooperatives

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• The strategic pillars for the support programmes for cooperatives

To increase non-financial support services to cooperatives

To increase a demand for cooperatives products and

• services

To improve sustainability of cooperatives

To increase financial support services to cooperatives To advance and empower all member cooperatives

and their business• To engage and lobby all organs of state, the private sector and stakeholders on behalf of its

members,• To play any other deemed to be of an Apex Cooperative Movement of South Africa to advance

the development of cooperatives• As an apex it shall act as the mouthpiece of its members in connection with any matter of

mutual interest to its members and the cooperative movement in general

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The institutional framework and support programme included the following;

• Cooperative Development Fund

• Cooperative Business Development Support Programme

• Compliance with education and training legislation framework

• Cooperative Incentive Scheme ( start-up grants)

• Micro-Finance Loan

• Cooperative Special Projects Fund

• Enterprise Network Programme

• Export Marketing and Investment Assistance

• Bilateral and Multi-lateral agreements with foreign trade partners• To represent the interests of the members within the sector and region they function within;• To facilitate education and training to its members and the cooperative in general • Strive to establish an audit fund to assist member co-operatives to have their co-operatives

audited in particular those that are unable to afford the cost of auditing• To represent the cooperative movement of South Africa in the continent and Internationally

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• The following coordination bodies have been established;

Department of Trade and Industry and its relevant Provincial

• counterparts and agencies

National and Provincial government Departments

Cooperatives Advisory Boards

Other State entities and parastatals

• The following monitoring and evaluating mechanisms for coops were established;

Provincial committee on coops Development

Inter-Departmental committee on coops Development

Cooperatives Movement, Labour and Private Sector to advance the principles of cooperatives as outline in the Co-

operative Act of the Republic of South Africa • To cooperate and /or collaborate with other formations in building the South African economy through

co-operatives • To establish a development Trust that will mobilize resources for the benefit of SANACO, member

cooperative and their businesses in particular and the cooperative movement of South Africa in general

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• The cooperatives are key players in getting the rural masses to participate in the social and

economic development of their areas.

• Enables their members to become active and meaningful participants in local and national

economies.

• Help in creation of employment and they provide training opportunities for the non-skilled

members.

• Provide organisational framework to deliver cheaply interventions aimed at assisting members

to access series such as extension and input supply and facilitate access to financial services.

• Influence and contribute to the content of existing education and training of co-operatives – i.e adapting ILO Matcom Material for use in SA

• Contribute to the development of education and training materials consistent with the co-operative principles as defined by the Co-operative Act of 2005

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• Cooperatives create space for rural communities to get income flow through bulk

marketing and collective negotiation, collective investment in machinery as well as

promoting economic of scale.

• Facilitate expansion of productive activity and diversification to agro-processing and

other forms of value addition.

• Reduce pressure and over-dependency on government with regards to provision of

housing, health-care, electrification etc.

• Enhance family and social values and promote peace and security within communities. Facilitate research programmes to conceptualise and demonstrate the social &

economic impact, and the economic and service delivery potential and role of co-ops in economic transformation

Facilitate comparative research and relevant international developments Facilitate research to support sectoral development of co-operatives (worker,

housing, health,consumer etc)

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• Mobilisation of local communities in combating unemployment and poverty is

crucial and essential. Decentralisation is a way to improve the quality of services

and respond to the needs and opportunities in the locals .

• In order to promote local economic development in rural areas, the members of cooperatives must clearly understand their roles and functions.

• Embracing their vision and mission

• Respecting the values and principles of cooperatives

• Implementing and managing their strategic plan

• Provide support for the entire chain of the Co-operative Formation Process • Facilitate easy registration of co-operatives • Facilitate organisational development, monitoring and evaluation of co-operatives • Recruit and service primary and secondary cooperatives

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• Always identifying their risks and come up with interventions

• Pushing for community “buying” and legitimacy

• Adopting the most effective and efficient management and financial system that can identify crisis situations

• Building capacity for leadership which can take quick decisions and actions when necessary

• Employing knowledgeable and competent staff that have good background of business and financial

management

• Developing strong ties and strategic alliance with government, private sector, civil society and international

institutions Mobilization of primary and secondary cooperatives according to their economic sectors and geographical

location e.g locally etc Through NEDLAC we are currently participating in the amendment of the current Act, Act No 14 of 2005 We have forged relationship with all provincial government and some national departments, as well as

development institution. etc We are developing a detail database of cooperatives in the country, to inform our planning and the type of

support that cooperatives needs. etc We are engaging with different departments with a view to create partnerships to develop and support

cooperatives related to departments’ specific mandates We are current engaging municipalities to create relationships that seek to provide support to cooperative

particularly given the fact that the local municipal support to cooperatives will contribute significantly to the development and economic sustainability of cooperatives

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• The South African National Apex cooperative (SANACO) is an important leading organisation that can

help the cooperatives to promote local economic development throughout the country because they stay

closer to both government and cooperatives themselves.

• In my opening address on the 2011 National conference of cooperatives in South Africa, Mr Lawrence

Bale emphasised the following points:• Raised awareness about cooperatives as enterprises i.e. summits, conferences, visit to communities • Engaged Policy makers at NEDLAC • Completed the National Cooperatives Strategy and the coops Bill• Currently establishing jointly with government the National Cooperative Development Agency, Coop

Academy, Tribunial, Coop Development Fund • Lobbied support from all 3 tiers of government department • Celebrated the international cooperatives day annually • Initiated and convened successfully the SADC Cooperatives Federation • Membership of the International Cooperatives Alliance • Member of the BRICS Cooperatives Movement • ICA coming to Africa to have their General Assembly in RSA Cape Town• The only Apex Body in the country representing members and non members

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• Cooperatives must work together in order to fight poverty, unemployment and inequality.

• Cooperatives must operate within the legal framework so that they must not be used by other

people who have their own personal and narrow views that are not to benefit cooperatives but

other agendas.

• Government must set aside some procurement that must be given to cooperatives as the means

to strengthen them financially and economically.

The cooperative movement was born more than 150 years out of the following three factors; • An enlightenment vision of a free, democratic and equal society where education and the

pursuit of knowledge determined the shape and direction of society • A practical reality that confronted and challenged that vision arising from the fear of

technology and the trend for labour to be replaced by capital in production, distribution and services

• Community as a development institution for society

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• The cooperatives have the support of the president and should ensure that they are

always ready to deliver services to the people and thereby building the economy.

• SANACO must always engage various stakeholders through debates, discussions,

workshops and meetings on matters of economic and social development of the

country.

• SANACO must identify challenges and provide solutions that are facing various

cooperativesan autonomous association of persons united voluntarily to meet their common

economic, social, and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise.”

• A membership based business organisation that must generate income for its sustainability as well as its members.

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CONCLUSION

• SANACO must play a crucial role in educating and training all the cooperatives members

• The SANACO members should always stand up for their values, principles and constitutions.

• SANACO must work with and monitor closely the activities and the core business of the Cooperatives

Development Agency .

• SANACO has the responsibility to turn rural communities around through the generation of economic

and social development.

Cooperatives operate on the basis of principles and ethics of good practice; • Open and Voluntary Membership • Democratic Member Control • Member Economic Participation • Autonomy and Independence • Education, Training and Transformation • Cooperation among Co-operatives • Concern for Communities

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CONCLUSION

• SANACO should assist the cooperatives to be united in search of excellence, effective

delivery, good governance, professionalism, accountability, equity and effective

administration.

• SANACO should champion the cooperatives to be visionary, competent and caring.

• Cooperatives in South Africa must become the learning organisations and inculcate a culture

of research, harnessing intellectual debate and encouraging learning, education and

development.to address the problems of economic and social development i.e • Popular ownership of capital and equal opportunity of education and employment for all of

society • Confront the potential poverty caused by replacement and displacement of labour • Community as a means for human development

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CONCLUSION

• Speaking during the 2011 national Conference of Cooperatives in Midrand, Prof

Thakhathi chose the topic “Accelerating Transformation and Service Delivery in the

Cooperative Sector” and emphasised the following points:

• Cooperatives should play a crucial role in enhancing local economic development in

rural communities by reducing poverty, unemployment and inequality through the

attainment of peace, greater freedom, social equity and sustainable development.

• The leaders and members of cooperatives must be creative, innovative and grow the

movement into vibrant, capable and sustainable entities.

• Service Cooperatives – are cooperatives established by members to receive decent services i.e SACCO’s, Consumers, Housing etc

• Worker Cooperatives – are formed by members to create decent employment to themselves i.e construction cooperatives, agricultural cooperatives etc

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Thank You

Contact Details: SANACO National Office

Office of the PresidentPretoria City HallSecond floorCorner Visagie & Paul Kruger Street0001Tel: 012 323 5069/73Fax : 086 606 3177E-mail : [email protected] or [email protected]

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the role of cooperatives as engines of social economic development in the south african rural...

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