Building vibrant and sustainable co-operative enterprises that stimulate the social economy of the province



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REPORT ON THE 2ND EASTERN CAPE PROVINCIAL CO-OPERATIVES INDABA AND EXHIBITION HELD AT THE INTERNATIONAL CONVENTION CENTRE, EAST LONDON FROM THE 27TH TO THE 28TH OF OCTOBER 2011.

BUILDING VIBRANT AND SUSTAINABLE CO-OPERATIVE ENTERPRISES THAT STIMULATE THE SOCIAL ECONOMY OF THE PROVINCE

PREPARED FOR THE INSTITUTE FOR CO-OPERATIVE DEVELOPMENT AT THE UNIVERSITY OF FORT HARE, BHISHO CAMPUS.







PREAMBLE


The Department of Economic Development and Traditional Affairs (DEDEAT) in collaboration with the Institute for Co-operatives Development (IFCD) were hosts for the 2nd Eastern Cape Provincial Co-operatives Indaba and exhibition. The Institute which is housed at the University of Fort Hare, Bisho Campus was established in 2010 with the core purpose of building human resource and knowledge capabilities, and supporting systems of learning, research institutions, co-operatives and community enterprises, as well as other organisations working to build co-operatives as an important component of local, provincial, national and regional political economy. The socio-economic challenges facing the province of the Eastern Cape in particular and the nation in general created the need for a strategic and sustainable mechanism to support co-operatives in order to create jobs as part of the local economic development drive in the country. In line with the Presidential Growth and Development Summit held in July 2003 which identified co-operatives as an important avenue for job creation, IFCD seeks to contribute to a vibrant co-operative movement in the country for socio-economic development through training of personnel for the development of co-operatives. The Institute pursues its mandate through sponsorship by DEDEAT. The conference was convened as part of the Eastern Cape Provincial Co-operative Development Strategy (2009-2014).The Institute co-hosted the conference in view of its objective of facilitating a developmental dialogue on co-operatives and community economics as critical features of an inclusive and productive society. The Co-operative Indaba brought together more than 250 participants among them, government, co-operatives and academics. The report outlines the contents of the dialogue and the resolutions of the Co-operatives Indaba. The contents relates to the presentations, reports and speeches made, the discussion of challenges and prospects for a vibrant co-operative movement that will transform the socio-economic state of the province and the nation as a whole. Most importantly, the report presents the resolutions made on how to build vibrant and sustainable co-operatives that stimulate the economy of the province.

Table of Contents


PREAMBLE 2

WELCOME SPEECH 4

SETTING THE SCENE 5

THE ROLE OF INSTITUTIONS OF HIGHER LEARNING 5

KEY NOTE ADDRESS BY DEDEA MEC: 7

INDABA PRESENTATIONS 9

THE STATUS OF CO-OPERATIVES IN SOUTH AFRICA 9

THE GERMANY EXPERIENCE 22

The Co-operative Banking System 25

Co-operatives in the Agricultural Sector 27

Small-scale Industry Commodity and Service Co-operatives and Consumer Co-operatives 27

Co-operative Federations 27

DGRV as National Apex Confederation 29

CURRICULUM AND TRAINING (IFCD) 31

TRAINING CO-OPERATIVES FOR EMPOWERMENT IN RURAL DEVELOPMENT: PRINCIPLES, STRATEGIES AND DELIVERY MECHANISMS: 33

TOWARDS A UNIFIED CO-OPERATIVE MOVEMENT 42

SOUTH AFRICAN NATIONAL APEX CO-OPERATIVE (SANACO) 47

How SANACO is structured 51

Definition of SANACO 51

Values 51

Core Principles 52

Programmes 52

Membership 54

Challenges 55

Conclusion 57

Request for Action 57

CO-OPERATIVE MOVEMENT BUILDING IN THE EASTERN CAPE 58

Introduction 58

Challenges faced by co-operatives 60

EASTERN CAPE EXPERIENCE 60

COMMISSIONS REPORTS 62

COMMISSION 1: COPERATIVE MOVEMENT BUILDING 62

The way Foward 65

COMMISSION 2: INSTITUTIONAL CAPACITY BUILDING FOR CO-OPERATIVES 66

The way forward 67

COMMISSION 3: FINANCING MODEL FOR CO-OPERATIVES ENTERPRISES 69

Co-operative bank program 72

The Way foward 72

COMMISSION 4: LEVERAGING ON PUBLIC SECTOR PROCUREMENT OPPORTUNITIES 74

FUNDING MODELS 76

INCENTIVE SCHEMES 76

THE ENTERPRISE ORGANISATION (TEO) 76

CO-OPERATIVE INCENTIVE SCHEME 77

CIS – OBJECTIVE 77

ELIGIBLE PROJECTS / ACTIVITIES 78

BENEFIT 78

NON-ELIGIBLE PROJECTS / ACTIVITIES 78

BLACK BUSINESS SUPPLIER DEVELOPMENT PROGRAMME (BBSDP) 79

SERVICES OFFERED BY SOUTH AFRICAN MICRO-FINANCE APEX FUND(SAMAF) 84

IMVABA CO-OPERATIVES FUND-UPDATE 86

What next for the ECDC 92

CO-OPERATIVE DEVELOPMENT AND FUNDING MODEL OF THE EASTERN CAPE RURAL FINANCE CORPORATION 97

Background 98

Conclusion 107

RESOLUTIONS OF THE 2ND PROVINCIAL CO-OPERATIVE INDABA 108

CO-OPERATIVE MOVEMENT BUILDING: 108

INSTITUTIONAL CAPACITY BUILDING: 110

LEVERAGING ON PUBLIC SECTOR PROCUREMENT OPPORTUNITIES: 111

FINACING MODEL 113














WELCOME SPEECH


Cllr Pumla Nazo
After thanking all the participants, Cllr Nazo conveyed the executive Mayor of Amathole Cllr Zukiswa Ncitha’s apology and message of support to all the attendants of the Indaba. She went on to express her appreciation to the Department of Economic Development and Environmental Affairs, for sustaining its commitment to the systematic development of strong and viable co-operatives within the Province of the Eastern Cape, as another strategy to enhance local economic development.

In her speech Cllr Nazo observed that the history of co-operatives has demonstrated that there is strength in numbers, emanating from common and uniform management of business interests, and ongoing sharing of information and good practices. Also, co-operatives have proven to be a blessing to smaller and struggling business concerns, especially within the informal sector, in that they get immediate and direct assistance and advice from their stronger and more viable partners.

She expressed the need for different role players to work as a single provincial team – to perpetuate the economic development policies of the African National Congress, policies that seek to assist formerly disadvantaged sectors of society to acquire economic freedom in their lifetime.

Cllr Nazo pointed out that development is about people and that any development that does not target people on the ground is a lost cause. In her speech she alluded to the Central Government’s official desire to encourage small and micro business concerns and establishments to graduate to fully-fledged trade and commercial enterprises.

Whilst the preliminary goal is to encourage subsistence and sustenance of basic living standards by eradicating poverty and lack of job opportunities, the ultimate objective is to maximize economic activity, especially at the local level.


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