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



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INDABA PRESENTATIONS

THE STATUS OF CO-OPERATIVES IN SOUTH AFRICA


Ms Lolita Dyi
Ms Dyi introduced her presentation with a brief look at the International best practices indicating that the world’s top 300 co-operatives’ revenue exceeds US$1 trillion which is equal to the world’s 10th largest economy. International co-operative movement represent 800million members, more than the total population of Europe. In Germany and France co-operatives create 440,000 and 700,000 jobs respectively. In Kenya co-operatives account for 4% of the GDP and 31% gross national savings. They also control markets for coffee, cotton and dairy. In the United States of America about 40% of the population are members of co-operatives. Some of the reasons behind success of co-operatives are summarised as follows;

The state of co-operatives in the country were summarised as follows:



Table1: Mortality & survival rate of co-operatives: Comparative analysis of registered coops in CIPRO and in the DTI baseline study (mortality and survival rate)




No. of registered co-operatives

No. of surviving co-operatives

No. of dead co-operatives

Survival rate

Mortality rate as %




Current data from the CIPRO register as of 2009

Data from the dti baseline study, 2009

National Picture




22,619

2,644

19975

12%




Provincial breakdown

KZN

8,697

1,044

7,653

12%

88%

EC

4224

287

3,957

7%

93%

WC

1003

69

934

7%

93%

NC

798

20

778

2,5%

97,5%

Limpopo

1879

405

1474

22%

78%

Mpumalanga

1496

187

1309

12,5%

87,5%

Gauteng

2365

394

1971

17%

83%

Free State

900

71

829

8%

92%

North West

1257

167

1090

13%

87%

Source: (CIPRO current study and the DTI baseline study)

Ms Dyi pointed out that the statistics for the province was not impressive and it calls upon all role players to review their activities in terms of ensuring that a better state is attained.

She also underlined that it is not the role of Government officials to form co-operatives but to facilitate that process and more importantly to create an enabling environment in which co-operatives thrive. She pointed out that officials ought not to be chasing after numbers but instead action plans that will see existing and new co-operatives succeeding.

The statistics indicate a remarkable increase in number of registered co-operatives from 1922 to 2010 which is quite positive. Ms Dyi noted that while about 30 000 co-operatives were registered by the year 2010 most of them are still weak and vulnerable.



Ms Dyi outlined the challenges facing existing and emerging co-operatives in South Africa which among others include,

Government Challenges:


  • Inadequate economic and social impact statistics on co-operatives

  • Coordination

  • Limitation of current support from existing enterprise development agencies for co-operatives



  • Recognition of co-operative as a unique business form and diversity in public and private markets remains very low

  • Accessibility of co-operative registration to local communities

  • Limited promotion and awareness

  • Avoidance of formalization of informal self-help groups

  • Limited access to finance

  • Limited access to technology

  • Limited access to critical business infrastructure

Co-operative Management Challenges:

  • Poor management and technical skills;

  • Limited trust and social cohesion;

  • Democratic decision-making skills within the co-operatives remain low;

  • Limited cooperation among co-operatives

  • Appreciation of collective interest above individual interest is still a challenge;

  • Embracing self-reliance as a principle within co-operatives remains a challenge

  • Compliance with the Co-operative legislation among new co-operatives is still a challenge

Market Challenges:

  • Undeveloped networks and economic value chains

  • Limited access to markets

Challenges on Co-operative Organisational Structures


As shown by the above statistics, Ms Dyi observed that Agriculture is still leading in terms of registered co-operatives due to the previous legislation that favoured co-operatives I this sector and also the department of agriculture is playing an active role is supporting co-operatives I this sector. There is still a struggle with multi-purpose co-operatives and Ms Dyi pointed out that as a department there is a move to discourage people from forming such co-operatives.

In her presentation Ms Dyi spelt out the vision of the National Co-operative Strategy which read as follows:

Towards a growing, self-sustainable and integrated co-operative sector, supported by all stakeholders, contributing to economic growth, poverty reduction and employment creation as well as assisting in bringing about economic transformation and an equitable society”. The strategy underlines a shared responsibility involving all spheres.



  1. The national departments’ roles include formulation of sector-based legislation, policies, strategies, support programmes aimed at enhancing the growth of a specific sector aligned with the National co-operatives.

  2. Provinces will be responsible to formulate provincial co-operatives strategies with support programmes aimed at enhancing the growth of co-operatives in the province aligned with the National Co-operatives Strategy. Support for the CDA and Co-operatives Academy.

  3. District and local Municipalities will be responsible to develop Co-operatives Implementation Plans to be integrated in the IDP’s and LED Strategies.

  • must provide business infrastructure and other relevant support to develop co-operatives.

  • Support for the CDA and Co-operative Academy.


The strategy attends to the entire co-operatives beneficiary base. There are 4 strategic pillars for the support programmes outlined in the presentation which include



  1. To increase non-financial support services to co-operatives

  2. Creating demand for co-operatives products & services

  3. To improve sustainability of co-operatives

  4. To increase financial support services to co-operatives

Ms Dyi pointed out that these strategies will be underpinned by efforts aimed at improving the availability of quality business information and knowledge through expanded research, communication outreach, education and training, and monitoring.

The Institutional framework and support Programmes were presented as follows:



Financial Support Products

Non-Financial Support Products

  • Export Marketing and Investment Assistance (EMIA): access to local and international market incentive assisting coops. Agency to facilitate access for coops.

  • Bilateral and multilateral agreements: government has struck bilateral and multilateral trade agreements giving access to foreign markets to coops and agency to facilitate access to the opportunities






  • to provide Conflict-resolution support to co-operatives; and



  • Judicious management support: to provide judicious management support to ailing co-operatives with potential for revival

Institutional Arrangement for Coordination, Monitoring and Evaluation

Relevant Coordination Bodies


Relevant Monitoring & Evaluating Mechanisms

Department of Trade & Industry and Provincial Departments

Provincial Committee on Coops Development


Government Departments


Inter – Departmental Committee on Coops Development


Co-operatives Advisory Board


Inter – Development Agency Committee on Coops Development


Other Bodies


Co-operatives Movement, Labour & Private Sector


The strategy proposes 3 key performance reporting mechanisms:

  • Annual Co-operative Review Report

  • Three years Mid-Term Review Report

  • Ten years comprehensive Review report(2010-2020)

A co-operative Information system (ICT) is to provide information on co-operatives development.

Ms Dyi Concluded her presentation with a brief look at the processes on the amendment of the Co-operatives development Act. The critical Areas for amendment include;





  • Auditing and accounting reporting by co-operatives

  • Proxy and Voting rights

  • Governance of co-operatives

  • Reserve Fund

  • Schedule for housing, worker and social co-operatives

  • Winding-up and judicial management

  • Co-operative Advisory Council
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