South African co-ops ‘need more help coping with effects of Covid-19’

Co-ops want public bodies to come to them for essentials such as PPE as the country tackles the crisis

South African co-operatives are ready to provide essential supplies and services to public service bodies, says the Africa Cooperatives Institute of South Africa (ACI-SA).

Formed in 2017, ACI-SA provides training and conducts research for the country’s co-operatives. With Covid-19 continuing to affect South Africa, the institute is encouraging the government and local authorities to source products and services from local co-operatives.

Since 5 March when it reported its first Covid-19 case, South Africa has been experiencing a sharp rise in the number of Covid-19 infections, with over 160,000 confirmed cases.

The institute is leading a campaign to encourage public sector bodies to procure PPE from textile co-ops, which can provide masks, medical uniforms, bed sheets. Its network is requesting orders from NGOs, government agencies and retailers.

“For us the way in which co-ops have mobilised demonstrated once again the role they play in the daily lives of their communities,” said Sizwe Mkwanazi, ACI-SA associate co-lead for training & co-operative enterprise projects.

On 5 July, co-operators demonstrated in front of the office of the KwaZulu Natal Province Premier to protest against what they perceive as a lack of support for co-operatives struggling to cope with the emergency. The strikers also called on the provincial government to consider co-ops when granting contracts.

The institute has supported 34 of the co-operatives to submit bids but these have yet to be allocated any PPE contracts. It also sent a letter to the Small Business Development department to enquire why co-ops are not being allocated PPE public contracts. In its response, the department said the sector’s requests were being looked into.

Challenges faced by co-ops include being unable to access markets, says the institute. They often end up selling to middlemen who then resell their products, including to the public sector.

Many co-ops have also found they do not qualify for Covid-19 relief funding. Small co-operatives benefit from tax relief, which makes them ineligible for the Covid-19 loan scheme. “Even those who qualify to get the relief funds, the burden of having to pay later makes the scheme unattractive,” added Mr Mkwanazi.

The institute works with 35 co-operatives in the textile and clothing sector, for which they provide training in co-operative governance and management. Plans to develop a two-year course for graduates, which would include a placement at a textile co-op, have been set back due to Covid-19.

As part of another project with agricultural co-operatives, the institute is also helping smallholder farmers who are members of co-ops to diversify crops as a response to the unpredictable weather patterns.

“When I was growing up the harvest season was in September, things have changed now,” says Sebonkile Thaba, chair of the institute who is a lecturer at the University of Johannesburg. The institute helps farmers access markets by connecting them to supermarkets in their area who want to source from local producers.

“It’s not enough to just provide education, we need to go beyond that to help them access to market. We address the lack of certain skills within co-ops and then help businesses cope with market demands as well as support them to embark on new ventures by deploying talent. And we use these opportunities to conduct research to enable governments to understand how they can intervene,” added Mr Mkwanazi.

Ms Thaba notes that co-ops in South Africa have mainly been formed out of necessity, rather than by choice, to address food security and provide basic incomes. And there are other barriers: until 1994 black South Africans were not allowed to form co-ops. “After 1994 people didn’t know what co-ops were,” said Ms Thaba.

“People are only aware of co-ops if their own parents are members of co-ops. So there is limited appreciation of co-ops. As an institute, we are having to constantly teach people, explaining and defining and simplifying what a co-op is,” she added.

The institute is hoping to launch a co-op management degree in 2022 and it currently looking for investors to back its projects.