Representatives of cooperatives from across South Africa have asked Social Development Minister Bathabile Dlamini to improve their support services to help co-ops become more productive and create jobs.
The request was made on Wednesday when Minister Dlamini met with cooperatives ahead of tabling her department’s Budget Vote, in the National Council of Provinces, in Cape Town.
The Budget Vote was expected to, among others, talk to the department’s contribution reducing poverty, unemployment and inequality in the country.
The representatives of cooperatives highlighted a number of challenges they have to deal with in trying to run sustainable businesses. These include poor access to markets, the need for accredited business skills training and mentoring, and long turnaround times on the registration of cooperatives.
Other challenges include the inability to tender for government contracts because of failure to meet certain governance criteria, and lack of coordination from government in providing support services to cooperatives.
Responding to some of the challenges raised, Minister Dlamini assured cooperatives that the department is committed to providing full capacity building support to them.
“To this end we have introduced, through the National Development Agency, a 12-month incubation programme for new and struggling cooperatives, through which we provide mentoring as well as governance, technical and administrative training to help cooperatives establish themselves and have a better chance of being sustainable,” said Minister Dlamini.
However, she warned that establishing a cooperative was a long-term process and those who were in it for immediate gratification were bound for disappointment.
“The fact that we see it as necessary to provide a 12-month incubation service shows that success comes only in the long term. We plead with you to be ready for hard work and be patient when starting cooperatives because they take a long time to reach sustainability,” she said.
On the issue of access to markets, the minister said the department was looking to expand cooperatives in its database of service providers.
Already, she said, the South African Social Security Agency procures supplies for its social relief of distress programme from cooperatives. This includes crops and clothing.
“Early childhood development (ECD) centres across the country are encouraged to procure crops for their nutritional programmes from cooperatives,” she said.
A comprehensive plan by the department to support and develop cooperatives within the next five years, based partly on insights gained from the meeting, will be presented to cooperatives in due course.
Capacity to create jobs
According to statistics from the Department of Trade and Industry, cooperatives have the capacity to create jobs when implemented correctly.
In Kenya, for example, cooperatives, account for 45% of the gross domestic product and 31% of the country’s gross national savings.
In 2012, government adopted the Integrated Strategy on the Promotion of Cooperatives. Through the strategy, government aims to create a self-sustainable and integrated cooperative sector, which contributes to economic growth, poverty reduction and employment creation.
Co-ops must also contribute to economic transformation and building an equitable society.
As part of its effort to contribute to this objective, the department launched the Cooperative Shop Project in October 2013. The project aims to combat poverty by linking social grant beneficiaries, particularly the care givers of children receiving child support grants and other vulnerable groups, to meaningful socio-economic opportunities. – SAnews.gov.za