South African government sees co-operatives as key to boosting growth and creating jobs

18 Jun 2015

Co-operatives will play a major role in the South African government’s strategy for economic growth. Speaking on the occasion of the budget vote on 20 May, Small Business minister, Lindiwe Zulu, highlighted some of the measures undertaken by the government to enable co-operatives and small businesses to lead the country’s economic transformation. According to South Africa’s National Development Plan, the small business sector could create 98% of the expected 11m jobs by 2030.

“As government, private sector and other relevant stakeholders we carry a responsibility to stimulate and support the growth and sustainability of the co-operative and small business sector,” said the minister. “The implementation of the 30% target for public procurement by SMMEs and co-operatives will ensure increased participation by emerging enterprises in the mainstream economy.”

Ms Zulu’s department will develop a business rescue strategy aimed at supporting small, micro and medium enterprises (SMMEs) and co-operatives in financial distress. Co-operative development in rural communities can be slowed down by the lack of adequate investments in infrastructure, a barrier the government was aware of, said the minister.

Another areas of focus for the government will be to encourage youth to start up their own enterprises, including co-operatives. To achieve this it is running a Mass Youth Enterprise Creation Programme, which aims to create enterprise opportunities for youth-owned small, medium and micros-sized enterprises (SMMEs) and co-operatives. Furthermore, government departments have to earmark 30% of their procurement spend towards growing and expanding youth owned enterprises in their acquisition of goods and services in fulfilling their operational mandate.

The Small Businesses department is working with the department of Energy to establish co-operatives for young people in rural Eastern Cape and Kwa-Zulu Natal, who were trained in in the installation, maintenance and repair of solar water heater geysers. “These youth co-operatives are now ready to participate in the growth of the renewable energy and green economy sectors,” she said, adding that the government was looking at expanding this programme across the country.

A Co-operative Incentive Scheme is also provide financial support to sectors such as agriculture, in the form of a grant to both start-up and expand existing small-scale primary co-operatives. The government has allocated R75m for this programme.

Photo: Small Business minister, Lindiwe Zulu


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