South Africa backs co-operative development

The South African government sees the development of small businesses and co-operatives as catalysts for economic growth and job creation. Speaking during a vote on the budget, small business...

The South African government sees the development of small businesses and co-operatives as catalysts for economic growth and job creation. Speaking during a vote on the budget, small business minister, Lindiwe Zulu, highlighted the importance of small businesses and co-operatives in the country’s economic transformation.

South Africa’s National Development Plan envisages that the small business sector will 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,” she said. “The implementation of the 30% target for public procurement by SMMEs (small, medium and micro enterprises) and co-operatives will ensure increased participation by emerging enterprises in the mainstream economy.”

According to the minister, the department will develop a business rescue strategy aimed at supporting SMMEs and co-operatives in financial distress. The lack of adequate investments in infrastructure can prove to be a challenge for co-operative development in rural communities, a barrier the government was aware of, said Ms Zulu.

The government is also 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. 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.

Energy is another sector where co-operatives and SMMEs could make a difference. 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.

Another flagship initiative of the government is the Co-operative Incentive Scheme. Under this programme, a budget of R75m will be used to provide financial support to sectors such as agriculture, in the form of a grant to both start-up and existing small-scale primary co-operatives.

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