COOPERATIVES WITHIN COMPREHENSIVE RURAL DEVELOPMENT FRAMEWORK
Prof D. R. Thakhathi: The Role of Cooperatives as agents of rural development in South Africa
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Transcript of Prof D. R. Thakhathi: The Role of Cooperatives as agents of rural development in South Africa
ICA Global Conference –SA 2013
THE ROLE OF COOPERATIVES AS
AGENTS OF RURAL DEVELOPMENT IN SOUTH
AFRICA .
BYProf D. R. Thakhathi,
University of Fort Hare, South Africa.
OUTLINE
INTRODUCTION
THE COOPERATIVES IN SOUTH AFRICA
THE ROLE OF COOPERATIVES IN PROMOTING LOCAL
ECONOMIC
DEVELOPMENT (LED)
THE CHALLENGES FACING COOPERATIVES IN SOUTH AFRICA
THE ROLE OF SOUTH AFRICAN NATIONAL APEX COOPERATIVE
(SANACO)
CONCLUSION
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 local economic development especially
in rural areas..
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.
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 challenges facing
cooperatives in the rural South Africa.
INTRODUCTION
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.
THE COOPERATIVES IN SOUTH AFRICA
THE COOPERATIVES IN SOUTH AFRICA
Common challenges facing cooperatives are;
• Lack of effective management skills
• Limited cooperation among cooperatives
• Limited access to finance and markets
• Lack of compliance with legislation
• Lack of monitoring and evaluation systems
• Limited access to technology
• Limited promotion and awareness
• Inadequate economic and social impact
• Poor management and technical skills • Underdeveloped network and economic values
chains
THE COOPERATIVES IN SOUTH AFRICA
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
THE COOPERATIVES IN SOUTH AFRICA
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
THE COOPERATIVES IN SOUTH AFRICA
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 para-statals
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
THE ROLE OF COOPERATIVES IN PROMOTING LOCAL ECONOMIC DEVELOPMENT ( LED).
The cooperatives are key players in getting the rural masses
to participate in the social and economic development of
their areas.
Coops enable 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.
Coops 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.
THE ROLE OF COOPERATIVES IN PROMOTING LOCAL ECONOMIC DEVELOPMENT ( LED).
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.
THE CHALLENGES FACING COOPERATIVES IN SOUTH AFRICA.
Mobilisation of local communities in combating unemployment
and poverty is crucial and essential. Lack of management
skills is a major challenge and this results in coops failing to
improve the quality of services and to respond to the needs
and opportunities of the locals In order to effective in their operations, the members of
cooperatives must clearly understand their roles and functions.
Implementation of their vision and mission is another obstacle.Cooperatives fail to respect the values and principles of
cooperativesPoor implementation of their strategic plans.
THE CHALLENGES FACING THE COOPERATIVES IN SOUTH AFRICA
They fail to identify their risks and come up with interventions
Some of the Coops lack community “buying” and legitimacy
Cooperatives lack the most effective and efficient management
and financial system that can identify crisis situations
Coops do not have the capacity for leadership which can take
quick decisions and actions when necessary
Coops cant employ the knowledgeable and competent staff that
have good background of business and financial management
The coops do not comply with the legislation.
THE ROLE OF SOUTH AFRICAN NATIONAL APEX COOPERATIVE (SANACO)
The South African National Apex cooperative (SANACO)
is an important leading organisation that can help the
cooperatives to deal with these challenges throughout
the country because they stay closer to both
government and cooperatives themselves.
In his opening address of the 2011 National conference
of cooperatives in South Africa, Mr Lawrence Bale
emphasised the following points:
THE ROLE OF SOUTH AFRICAN NATIONAL APEX COOPERATIVE (SANACO)
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 ROLE OF SOUTH AFRICAN NATIONAL APEX COOPERATIVE (SANACO)
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 cooperatives
THE ROLE OF SOUTH AFRICAN NATIONAL APEX COOPERATIVE (SANACO)
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.
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.
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.
CONCLUSION
The rural communities must be developed in
various ways: inter-alia agriculture, farming,
business and commerce, agri-processing,
manufacturing, mining, training and education,
arts and culture, tourism, retail services, financial
services, sports, etc.
It is clear that if all cooperatives in South Africa can
plan strategically and back their plans with
business and operational details, they will
transform the country in tremendously.
A MILLION
THANKS