Cooperatives and Youth in the Context of Rural Development

1. Cooperatives and Youth in the Context of Rural Development Prof. G. M. Nkondo Presented at the Seminar Organized by Agri-Seta Prof. MuxeNkondo National Small Business Advisory Council, Department of Trade and Industry 21 September 2012

2. 1. Introduction • This presentation builds on an optimistic outlook against a general background of pessimism that fails to account for a range of effective practices across the African continent, Brazil, China, and India. South African cooperatives are at the crossroads. Persistent difficulties in accessing funds and markets are now being compounded by new threats arising from the global economic crisis. But South Africa has at least four major opportunities to transform its cooperatives to be a force for job creation and economic growth. Prof. G. M. Nkondo

3. Introduction (Cont.) • First, advances in science, technology, and innovation worldwide  offer South African cooperatives new tools needed to promote their development. Second, efforts to create regional markets will provide new incentives for the advancement of cooperatives. Third, African governments, including our own, are helping small and middle-size enterprises, especially cooperatives, to focus on sustainable development. Fourth, universities and research institutions are initiating research into enterprise development, drawing valuable lessons from Brazil, Tanzania, Kenya, China, and India. Prof. G. M. Nkondo

4. 2. Critical Strategic Questions Cross-country research has identified the following strategic questions that should guide analysis: • How can we position cooperatives to be at the centre of efforts to spur economic development in South Africa and promote regional integration? • What policies and institutional changes are needed to promote cooperatives in the context of regional integration? • What measures should be taken to ensure that cooperatives interact in ways that accelerate the move beyond low value-added subsistence in agriculture and other related sectors? Prof. G. M. Nkondo

5. Critical Strategic Questions (Cont.) • What specifically should be done to foster interactions among government, industry, academia, and civil society – all of which are critical actors in the development of cooperatives? • How can we align the governance of cooperatives to national and regional imperatives? This is likely to affect trade policies in the region? • How can we influence universities and research institutes to align their missions and operations with the development of cooperatives? • What lessons can be learnt about regional integration from the European Union and its impact on trade and enterprise development? Prof. G. M. Nkondo

6. 3. Integrated Strategy for the Development of Cooperatives: Key Issues • Examine critical linkages in South Africa and the continent between cooperatives, rural development, and economic growth. The current global economic crisis, deepening poverty, widening unemployment, and the threat of persistent social conflict and violence have reinforced the urgency to find lasting solutions to the challenges facing cooperatives. • Improving the performance of cooperatives will require deliberate policy efforts to bring higher technical and management skills, especially in universities, to the service of cooperatives and enterprise development. It is important to focus on how to improve the productivity of the youth, most of whom are excluded from cooperatives and related developmental initiatives. Prof. G. M. Nkondo

7. Integrated Strategy for the Development of Cooperatives: Key Issues (Cont.) • In collaboration with universities and research institutes, review major advances in science, technology, and business organizational design and identify their potential for use in the development of cooperatives. This should include local innovations and indigenous knowledge. • Examine the critical linkages between infrastructure, agriculture, rural development, and cooperatives. • Explore ways in which big business can be encouraged to support cooperatives. • Examine regional approaches to economic integration and explore ways in which they could foster cooperatives. Prof. G. M. Nkondo

8. 4. The Importance of Regional Economic Communities • Regional Economic Communities can serve to coordinate innovation in cooperatives, agriculture, and rural development. • Care must be taken to avoid overlap and duplication of effort. • Assess the work of the Southern African Development Community (SADC), the Common Market of Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Economic Community of West African States (ECOWAS). Prof. G. M. Nkondo

9. The Importance of Regional Economic Communities (Cont.) Examine the importance of the tripartite alliance, agreed upon in 2008, between COMESA, SADC, and EAC with respect to the following strategic issues: • Free movement of ‘cooperators’ and business people generally. • Joint implementation of inter-regional infrastructure programs. • Introduction of institutional arrangements that promote cooperation among cooperatives in the three Regional Economic Communities. • Joint programs include: a single airspace; an accelerated seamless inter-regional broadband infrastructure networks; and a harmonized policy and regulatory frameworks to govern information and communication technology and infrastructure development. Prof. G. M. Nkondo

10. The Importance of Regional Economic Communities (Cont.) • Fostering cooperatives development will require government to function as an active facilitator of cooperatives development. Government actions will need to reflect the entrepreneurial character of the cooperatives community. They too will need to be entrepreneurial. Moreover, addressing the challenges will require government to adopt a mission-oriented approach, setting key targets and providing support to cooperatives to help them meet quantifiable goals. A mission-oriented approach will require greater reliance on executive coordination of diverse activities. There is therefore a need to strengthen capacity building, science, technology, and innovation in all sustainable aspects of cooperatives. Prof. G. M. Nkondo

11. 5. The Search for a Sustainable Funding Model • The search for a sustainable funding model should begin with the assessment of the efficacy of the policy tools used to promote cooperatives. These include direct financing, matching grants, taxation policies, and rewards for creativity and innovation. It should include also innovative strategies to foster collaboration between government, the private sector, donor agencies, and civil society. Prof. G. M. Nkondo

12. Thank You! Prof. G. M. Nkondo