THE INTEGRATED STRATEGY ON THE PROMOTION OF COOPERATIVES:

1. THE INTEGRATED STRATEGY ON THE PROMOTION OF COOPERATIVES: PROMOTING AN INTEGRATED COOPERATIVE SECTOR IN SOUTH AFRICA PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY 05 JUNE 2012

2. Presentation Outline Background and Process Mission & Objectives Global driver of economic growth International Best Practice Situational Analysis of Co-ops in SA Co-operative development a shared responsibility Co-operative types – value chain Strategic pillars; Coordination Monitoring and Evaluation Action plan Secret

3. Background & Process • On 5 December 2001, Cabinet agreed that the mandate for co-operatives development be transferred to the dti • In 2002: ILO Recommendation No. 193 on the Promotion of Co-operatives • In 2003, in the GDS Summit, it was agreed that a fully-fledged co-operatives unit be established within the dti

4. Background & Process • In October 2010, Co-ops Strategy tabled to Cabinet and Cabinet approve for public comment • In Jan – March 2011,Strategy gazetted for public comments • In May- July 2011, public comments on the the Strategy discussed at NEDLAC and NEDLAC Report produced • In March 2012; the Strategy was submitted to Cabinet for approval and was approved Secret

5. the dti Strategic Objectives • Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation. • Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives. • Facilitate broad-based economic participation through targetd interventions to achieve more inclusive growth. • Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner • Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensure effective and efficient service delivery.

6. VISION The vision of the National Cooperative Strategy remains consistent with the one contained in the Cooperative National Policy (2004) and is as follows: Towards a growing, self-sustainable and integrated cooperative sector, supported by all stakeholders, contributing to economic growth, poverty reduction and employment creation as well as assisting in bringing about economic transformation and an equitable society

7. MISSION • Strengthen the potential benefits of cooperatives by raising the value and profile of cooperatives • Foster human capital development with a special focus on cooperative principles, business management and technical skills; • Foster a culture of cooperation, self-help, self-reliance and solidarity among cooperative beneficiaries and beyond through conducting awareness programmes; • Work towards self-sustainability of the cooperative movement in the medium to long-term, which will be achieved through partnership models and by consistently capacitating all stakeholders during the formation years and beyond; • Conduct leading-edge research to inform the development, evaluation and monitoring of performance on cooperatives.

8. Objectives • To grow all forms and types of cooperatives and its movement as well as increase its contribution to the country’s GDP growth rate, economic transformation and social impact. • To promote cooperatives as a vehicle that can assist in creating decent employment and reducing poverty through income-generating activities. • To raise the profile of cooperatives as a dynamic and effective business organization that can empower communities and uplift their social and economic well-being. Secret

9. Objectives… • To raise the profile of cooperatives as an institution that allows agglomeration of small economic activities. • To aggressively promote closed cooperatives that • constantly attract high levels of membership as • captive market, enabling them to be highly • sustainable and have huge potential to contribute • towards substantial economic and social • impact.

10. Co-operative as a global driver of economic growth Co-operatives is a highly successful business model in the global business environment and is relevant for South Africa, here are some of the international statistics The Revenue of the world’s top 300 co-operatives exceeds US$ 1 Trillion, equal to the world’s 10th largest economy

11. Co-operative as a global driver of economic growth cont.. International Co-operative Movements represent 800 million members, more than the total population of the entire European continent Co-operatives in Germany and France create 440,000 and 700,000 jobs respectively

12. Co-operative as a global driver of economic growth cont.. Kenyan co-operatives accounts for 45% of the GDP and 31% of gross national savings. The co-operatives also control markets for coffee, cotton and dairy In the US, more than 100 million people or 40% of the population are members of co-operatives

13. International best-practice

14. Situational Analysis of Cooperatives in South Africa • 2005 – 2009 (Boom period) for coops growth in numbers • Drivers of Growth • Enabling environment through legislative framework such as the 2005 Coops Act • Support programmes across government • These emerging cooperatives are still weak and vulnerable (Source: Registrar of Cooperatives, Statistics of Cooperatives in South Africa, 1922- March 2012

15. Situational Analysis of Coops in South Africa cont…

16. Situational Analysis: Challenges facing Co-ops in SA • Government Challenges: • Inadequate economic and social impact statistics on cooperatives. • Coordination. • Limitation of current support from existing enterprise development agencies for cooperatives. • Recognition of cooperative as a unique business form and diversity in public and private markets remains very low. • Accessibility of cooperative registration to local communities. • Limited promotion and awareness. • Limited access to finance • Limited access to technology • Limited access to critical business infrastructure

17. A Situational Analysis: Challenges facing Co-ops in SA.. • Cooperative Management Challenges • Poor management and technical skills • Limited trust and social cohesion • Democratic decision-making skills within the cooperatives remain low • Limited cooperation among cooperatives • Compliance with the Cooperative legislation among new cooperatives. • Market Challenges • Undeveloped networks and economic value chains. • Limited access to markets.

18. A Situational Analysis: Challenges facing Coops in SA.. • Challenges on Cooperative Organisational Structures • Lack of strong and viable cooperative associations and organisations.

19. Strategic principles National Departments will be responsible to formulate sector-based legislation /policies/strategies/ support programmes aimed at enhancing the growth of a specific sector aligned with the National Cooperatives Strategy Provinces will be responsible to formulate provincial coops strategies with support programmes aimed at enhancing the growth of cooperatives in the province aligned with the National Cooperatives Strategy. Support for the CDA and Cooperative Tribunal District & local Municipalities will be responsible to develop Cooperatives Implementation Plans to be integrated in the IDP’s & LED. Support for the CDA and Cooperative Tribunal

20. Strategy positions the promotion of cooperatives as a shared responsibility involving the following stakeholders Responsible for growing and develop cooperatives: They may provide research, education and training, financial and non-financial support, advocacy, mobilisation and awareness-raising. Co-operative Movement, Apex organisations, CBOs, NGOs, labour organisations & churches Have a role to play in assisting in providing international expertise; financial and non-financial support International organizations: ILO, DGRV Financial Institutions: banks, etc. Have a role to play in developing funding products tailor-made for the development of cooperatives.

21. Strategy attends to all the cooperatives beneficiary base • Focusing on youth, women, and people living with disabilities; • Focusing on special geographical areas: rural, peri-urban and former homeland areas; • Focusing and promoting social and enterprise cooperatives – all forms of cooperatives both social and enterprises form will be promoted in the strategy.

22. Supported cooperative types and promoting the entire value chain Storage Processing Financial Co-operatives Manufacturing Distribution Raw Material Marketing and Supply Coops Consumer Co-operatives Agriculture Co-operatives Worker Co-operatives- Labour intensive e.g. mining; construction; textiles; and arts and craft

23. Strategic approach for promoting cooperatives in South Africa Strategic pillar 1: To increase non-financial support services to cooperatives Strategic pillar 2: Creating demand for co-operatives products & services Strategic pillar 3: To improve sustainability of co-operatives Strategic pillar 4:To increase financial support services to co-operatives These strategic programmes will be underpinned by efforts aimed at improving the availability of quality business information and knowledge through expanded research, communication outreach, education and training, and monitoring.

24. Strategic Pillar 1: Non-financial support To increase non-financial support services to co-operatives Secret

25. Strategic Pillar 2: Access to markets To increase demand for co-operatives products & services

26. Strategic Pillar 3: Sustainability of co-ops To improve sustainability of cooperatives

27. Support Programmes: Strategic Pillar 2.. Strategic Pillar 4: Financial support To increase financial support services to cooperatives

28. Cross-cutting programmes

29. Coordination, Monitoring and Evaluation Relevant Coordination Bodies Relevant Monitoring & Evaluating Mechanisms Department of Trade & Industry and Provincial Departments Provincial Support Committee on Coops Development Government Departments Inter – Department Committee on Coops Development Cooperative Movement and other stakeholders Cooperative Advisory Council Cooperatives Movement, Labour & Private Sector Other Bodies

30. Coordination, Monitoring and Evaluation The strategy proposes three key performance reporting mechanisms: Annual Cooperative Review Report Three Years Mid - Term Review Report (2015) Ten Years Comprehensive Review report (2012 – 2022) • Cooperative Information Communication System (ICT) • To provide information on cooperatives development

31. Action plan for implementation • Action plan for implementation attached as an appendix to the strategy outlining key activities and actions to be implemented by relevant stakeholders. • Activities not exhaustive but provide guidance to role players.

32. the dti’s Contact Details Chief Director of Cooperatives: Jeffrey Ndumo EIDD: Cooperatives Business Unit: +27 12 394 1631 the dti Call Centre: 0861 843 384 the dti Switchboard: +27 12 394 0000 Website: www.thedti.gov.za Postal Address: Private Bag X 84 Pretoria 0001 South Africa

33. THANK YOU