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


Download 387.44 Kb.
Size387.44 Kb.
1   ...   5   6   7   8   9   10   11   12   13



  1. Why is government not procuring from co-operatives?

  2. What can be done to improve this situation?

  3. What kind of pressure can co-operative put to government to improve this situation?

  4. Prioritise these suggestions – action plan

Response to question 1

a) Compliance

Co-operatives have to comply with a host processes and systems within the supply chain management systems of government and municipalities .Most Co-operatives are not familiar with these and this is where training is of paramount importance. Required documentation such as tax clearances, competency documents are a challenge to many co-operators. The adjudication process also adds to the woes on Co-operatives. The system requires Quotations 80/20 principle, 90/10 principle where certain categories of co-operations are excluded before they even start. This whole system can be avoided if only the Co-operatives can know that they firstly have to be registered in the Provincial Treasury Database or Municipality Database before anything happens.

b) Corruption

The processes are bureaucratic and have loopholes for corruption. Some officials abuse these systems and give work to their colleagues or associates companies. Renewals of documents that expire also need to be addressed.

C) Bulking of Work

The commission noted that IDP budgeted work is bulked and does not give room for sub-contracting Co-operatives. No conscious allocation is made towards co-operatives.

d) Awareness

Co-operatives lack appropriate knowledge of the procurement procedures.

Response to Question 2

There should be policy on the 30% portion for Co-operatives and not talk .The national SANACO conference resolution should cascade down from National /Provincial and Local municipal level.

Co-operatives should engage Municipal Management and the provincial Interdepartmental structures and involve the Premier if there is no result so that this can be a cabinet matter .The newly formed CDC’s should lead this campaign and produce a news letter informing Co-operatives provincially on progresses and opportunities. The fast tracking of the Co-operatives Bank is very important to improve the plight of Co-operatives in the province, so that they can access finance. The envisaged Co-operatives advisory board can assist to improve the situation on monitoring and evaluation of Co-operatives’ situation in the province.

Response to Question 3

CDF’s will have to engage vigorously at local level with LED, SCM and the council speakers through the municipal managers. This will enable the information to be tabled at the Provincial Legislature.

The Co-operatives must also look into a formal provincial structure that can be an institutional body taking their issues legally, advocating a sustainable Co-operatives movement.

Response to item 4

The commission resolved to have a strategic framework within 3 to 6 months in order to institutionalize the structure .This will require a provincial co-operatives database which is sectorised. This will assist in the preferential procurement policy formulation. This will also help in the formulation of sector co-operatives banks within the six month period. The emergence of CDC’s at all District Municipalities will bring this effort closer for all co-operatives and extended to locals as a longer term objective.



Ms Noponki Gqalo


To stimulate and facilitate the development of sustainable, competitive enterprises through efficient provision of effective and accessible funding mechanisms (i.e. incentive schemes) that support national priorities.




  • Increase contribution of co-ops to the economy.

  • To promote co-operative through provision of matching grant.

  • To improve the viability and competitiveness of co-operatives by lowering the costs of doing business.

  • Advance broad –based black economic empowerment (BBBEE).

  • Bridging the gap between the first and second economy.


  • Business Development Services.

  • Feasibility Studies /Market Research.

  • Production Efficiency.

  • Technological Improvement Projects.

  • Plant and Machinery.

  • Start-up requirement (discretion of AC).

  • Working Capital (Opening stock-start ups).


  • MATCHING GRANT = 90:10

  • MAXIMUM GRANT R 350 000



  • Activities already funded by other government or parastatals

  • Costs associated with tendering and tendering documentation

  • Cost of Acquiring a building

  • Costs of rental and staff payments

Any other cost (s) that the Adjudication Committee, in its sole discretion, deems as non –qualifying.



To leverage the competitiveness of black owned enterprise and to broaden their economic participation by affording them access to affordable, means of production, on a cost sharing basis which are aimed at improvements in corporate governance, management, marketing, productivity and use of modern technology ( tools, machinery or equipment).


The focus is on formal black enterprises that have the potential or capacity to supply goods and services for markets in a sustainable manner.


  • 51% black majority shareholding.

  • R250, 000 to R35 million turn-over per year.

  • 1 year in operation and trading as a business.

  • 50% management positions held by black people.

  • VAT registration is compulsory only for entities with annual turnover +R1m.


  • Qualifying enterprises are eligible to receive a maximum of up to R1m grant.

  • Incentive is pro-rated on 30% of the current turnover.

Cost Structure is as follows:

  • Max R800 000 being ring fenced for tools, equipment and machinery) – 50: 50 % cost sharing.

  • Max R200 000 being ring fenced for business development services and training – 80: 20 % cost sharing.


  • Company diagnostics;

  • Business Plan to raise finance

  • Management information systems (including production, sales, accounting software);

  • Quality management system and assurance e.g. (ISO, certification, accreditation, grading costs);

  • Patenting and intellectual property rights;

  • Production and productivity improvements;

  • Product improvements;

  • BEE rating and certification.



  • Business management & IT;

  • Corporate governance & business ethics, compliance;

  • Sales management (including customer service, customer support)

  • Negotiating skills and techniques;

  • Tendering and contracting;

  • Mentorship and coaching.


  • Introducing a tool, machinery or equipment that will improve the entities productivity and competitiveness.

  • To introduce clean or green production process.

  • To secure a contract or tender for which the equipment is essential.

  • To attain a grading to qualify the enterprise for new or bigger contract.

  • To provide security of supply or back-up systems (energy or IT).

  • To enhance growth or efficiency through the use of IT for business.

Excluded interventions

  • Office equipment, furniture and computer hardware costs, except for Business Process Services (BPS) applications.

  • Land and buildings.

  • Working capital.

  • Training programmes that exceed five (5) weeks or one-hundred and sixty (160) notional hours.

  • Long-term formal training (e.g. a Master of Business Administration), including training at accredited institutions such as universities.

  • Interventions that are already funded by another government scheme or parastatal.

  • Design and printing of marketing material.

  • Vehicles (sedan, kombis, panel vans, bakkies, trucks and trailers).

  • Any other costs that the Adjudication Committee, in its sole discretion, deems as non-qualifying.

The network facilitator

  • Network Facilitators are individuals or legal entities who assist Industrialists/Enterprises in compiling BBSDP proposals and/or ensure the delivery of projects that have been approved under BBSDP.

  • The Network Facilitator is classified as an Independent Contractor in terms of exclusionary sub-paragraph (ii) of the definition of “remuneration” in the Fourth Schedule to the Income Tax, 1962.

Project Funding for Emerging Exporters (PFEE)

To offer support to projects that promote the development of emerging exporters.

  • Funding benefits projects that:

  • Develop export markets.

  • Broaden the export base.

  • Stimulate the participation of SMME’s, HDI's, women and physically challenged in international trade.

Incentive Benefit

  • 100% of the cost of the approved project.

  • Local and International air travel.

  • Accommodation.

  • Transportation of samples.

  • Exhibition space.

  • SMME’s / HDI’s contribute a commitment fee of R750 for local events and R1500 for international events.

Eligible Entities

  • Export Councils.

  • Industry Associations.

  • Provincial Investment and Economic Development Agencies.

  • Business Chambers.

  • SEDA.

Application Procedure

  • Submit an application 3 months prior to commencement date of the event.

  • Project / Business Plan.

  • Quotations (travel, accommodation, freight and exhibition costs).

Qualifying Criteria


  • Enterprises should be in operation for more than 12 months.

  • Comply with statutory requirements: registration with SARS for tax clearance certificate; export registration with customs and excise; register with CIPRO.

  • Participate in a structured Export Development Programme.

  • Not exported in the past.

  • Project must be short-term in nature, not more than 10 days.

  • Assistance is limited to entrepreneurs only (excludes staff and consultants).

  • A minimum of 5 to a maximum of 20 entrepreneurs.

  • Entities can participate four times in this project, and then graduate to EMIA.

  • Focuses on exhibitions and mission participation.

Download 387.44 Kb.

Share with your friends:
1   ...   5   6   7   8   9   10   11   12   13

The database is protected by copyright © 2022
send message

    Main page