Co-operatives: Deputy Minister on Status of Support and Development; Committee Report on Wal-Mart /Massmart merger
Meeting Summary
The Deputy Minister of Trade and Industry said that government had identified co-operatives as a means of job creation and alleviating poverty. Co-operatives had been transferred in 2001 from the Department of Agriculture to the Department of Trade and Industry (dti). The dti wanted co-operatives promoted in all sectors of the economy and had developed support interventions and a conducive environment through a National Co-operatives Development Policy, the Co-operatives Act of 2005, the Co-operatives Banks Act and the need to amend the current Co-operatives Act to establish the Co-operatives Development Agency and the Co-operatives Tribunal and an academy to train co-operatives. All tiers of government should promote co-operatives and it was a development priority for all levels of government. The United Nations had designated 2012 the International Year of Co-operatives. A campaign would be launched on the 12th of March for increased awareness of the role of co-operatives and to promote the seven principles of co-operatives. The celebrations would include hosting the International Co-operatives Alliance Board meeting in June in
The Deputy Director General: Empowerment and Enterprise Development in the dti said that the reason why the legislation was because none of the current enterprise development agencies were geared to assist co-operatives with the challenges they faced and because there had been changes in government administration in 2009. It wanted to develop the informal sector strategy parallel to the co-operatives strategy. In addition the dti was busy with a regional Industrial development strategy under which special economic zones (SEZ) would fall and it was seeking to resuscitate the old industrial parks of the former
The Chief Director: Co-Operatives in the dti, said the development of co-operatives had been identified as a viable means to create unemployment and in 2001 a new co-operatives mandate was transferred from the Department of Agriculture to the dti. It co-ordinated with provinces and municipalities on the development and promotion of co-operatives strategies and assisted with support and training. International Co-operatives Day was on the 7th of July. During the year there would be a schedule of activities which would be launched in the
Challenges included the fact that Treasury had ruled as unconstitutional the ten set aside programmes approved by Cabinet to help support the establishment of co-operatives. The support and coordination of co-operatives programs at provincial and municipal level was weak. Co-operatives had a very low survival rate. The program lacked an accurate reporting mechanism. It was intended to double the CIS investment to R100 million as the supply of funds was not in agreement with demand. Another challenge was to expand existing co-operatives and not just focus on start-ups. It wanted to assist in the support of co-operative marketing boards.
Members asked how many jobs had been created by the investment in co-operatives. What was co-operatives contribution to the GDP? What role did the National Youth Development Agency (NYDA) play? How were the other Departments supporting co-operatives? What were the survival rates of co-operatives? Was there a tool to measure the success of investment into co-operatives? Where did funding for the CIS come from? How did Seda operate in terms of co-operatives? Had any co-operatives developed to what would be regarded as an acceptable level? Were other departments also viewing co-operatives as important? What was the status of black ownership of co-operatives? What co-operatives model was
Wal-Mart /Massmart Report
The Committee Report on the Wal-Mart /Massmart merger was adopted.
Meeting report
Briefing
The Honourable Deputy Minister of Trade and Industry, Ms E Thabethe said that government had identified co-operatives as a means of job creation and alleviating poverty. Co-operatives had been transferred in 2001 from the Department of Agriculture to the Department of Trade and Industry (dti). The dti wanted co-operatives promoted in all sectors of the economy and had developed support interventions. The dti was trying to create a conducive environment through a National Co-operatives Development Policy, the Co-operatives ACT No.14 of 2005 and the need to amend the current Co-operatives Act to establish the Co-operatives Development Agency and the Co-operatives Tribunal and an academy to train co-operatives. All tiers of government should promote co-operatives and it was a development priority for all levels of government. The United Nations had designated 2012 the International Year of Co-operatives. A campaign would be launched on the 12th of March for increased awareness of the role of co-operatives and to promote the seven principles of co-operatives. The celebrations would include hosting the International Co-operatives Alliance Board meeting in June in
At the provincial level, the Eastern Cape had established the Imvaba Fund while the Free State province had allocated R3million for co-operatives, Gauteng R1.6 million, Limpopo R4 million, North West R4.6 million and the Western Cape R1.3 million. In KwaZulu Natal (KZN), Ithala was giving active support to co-operatives. The Department of Labour had a co-operatives strategy in place while the Department of Public Works had allocated R20.8 million and the Department of Co-operative Government and Traditional Affairs had allocated R18 million.
Mr Sipho Zikode, Deputy Director General: Empowerment and Enterprise Development in the dti, said that the reason why the legislation was being amended was that in 2005, Cabinet had approved an Enterprise Development Strategy which resulted in the establishment of Khula, Samaf and Seda but none were geared to assist co-operatives with the challenges they faced. He said the dti wanted to amend and update the Enterprise Development Strategy as there had been changes in government administration in 2009. It wanted to develop the informal sector strategy parallel to the co-operatives strategy. In addition the dti was busy with a regional Industrial development strategy under which special economic zones (SEZ) would fall. SEZ’s would be broader than Industrial Development Zone strategy, as a port of entry was required for the latter. It was also seeking to resuscitate the old industrial parks of the former
Mr Jeffery Ndumo, Chief Director: Co-Operatives in the dti, said the development of co-operatives had been identified as a viable means to create unemployment and in 2001 a new co-operatives mandate was transferred from the Department of Agriculture to the dti. It co-ordinated with provinces and municipalities on the development and promotion of co-operatives strategies and assisted with support and training. International Co-operatives Day was on the 7th of July. During the year there would be a schedule of activities (see slides 8-10 of the presentation). He said the
Challenges included the fact that Treasury had ruled as unconstitutional the ten set aside programmes approved by Cabinet to help support the establishment of co-operatives. The support and coordination of co-operatives programs at provincial and municipal level was weak. Co-operatives had a very low survival rate. The program lacked an accurate reporting mechanism. It was intended to double the CIS investment to R100 million as the supply of funds was not in agreement with demand. Another challenge was to expand existing co-operatives and not just focus on start-ups. It wanted to assist in the support of co-operative marketing boards.
Discussion
Mr N Gcwabaza (ANC) asked how many jobs had been created by the investment in co-operatives. What was co-operatives contribution to the GDP? He said the youth were not represented in co-operatives as most owners were over 34 years old and what role did NYDA play. How were the other Departments supporting co-operatives?
Mr H Hoosen (ID) asked what the survival rates of co-operatives were. Was there a tool to measure the success of investment into co-operatives?
Ms D Tsotetsi (ANC) asked why there were no co-operatives in the
Mr Z Ntuli (ANC) asked where funding for CIS came from? How did Seda operate in terms of co-operatives?
Mr X Mabasa (ANC) asked if any co-operatives had developed to what would be regarded as an acceptable level. Were other departments also viewing co-operatives as important?
Mr S Nongonyama (ANC) asked what the status of black ownership of co-operatives was. He was concerned that the spread of co-operatives in the
Ms S Van der Merwe (ANC) wanted to know what the anticipated outcomes of the investment into co-operatives were and how were the challenges such as weak co-ordination being addressed.
Mr G Krumbock (DA) said the presentation was lacking a cost /benefit analysis to see how cost effective an investment it was in comparison to other programs seeking to promote job creation.
Mr K Mubu (DA) asked how land restitution or land ownership impacted on the establishment of co-operatives. What was the National Development Agency’s role in assisting co-operatives?
The Chairperson asked whether funding was directly to co-operatives or through intermediaries. How aware were people of the co-operative’s products promoted by the dti.
The Deputy Minister said the model wanted to decrease unemployment and to develop enterprises. Funding came via Samaf and the CIS and The Enterprise Organisation assisted with grants for amounts over R250000. An adjudication board sat to evaluate funding requests. She said
Ms Zandile Ndaba, Senior Manager: Co-operatives at Seda said that it held awareness workshops throughout the value chain and it worked in partnership with the provinces and municipalities to leverage the funds.
Mr Ndumo said the 2008 survey on co-operatives answered all the questions raised but that the survey needed to be updated as it would indicate trends. He said co-operatives could not be seen as short term, it needed a medium to long term perspective. He said the last report showed a survival rate for co-operatives of 10%. There were more than 25 co-operatives doing very well. He said the model adopted was one of seeking to mobilise the social capital in communities. It was not a charity but a business. Co-operatives should not be judged by its size but on its ability to generate a surplus income, niche activities might even demand a small size. It had done international benchmarking taking into account
The Deputy Minister said the land issue had impacted and this had been referred to local government. Funding for co-operatives was not given to buy land.
Mr Nongonyama asked what niche areas had been identified in
Ms Tsotetsi asked how double dipping on funds was being dealt with.
The Chairperson asked if the dti had a dashboard on co-operatives to monitor progress.
Mr Livhu Mukhiti, the head of the Deputy Minister’s office said the dti had developed close relations with the Department of Agriculture and Forestry to assist on land reform issues.
Mr Ndumo said the Department was in the process of establishing a dashboard in its IT system which would provide information from district to national department level. He said the Co-operatives Development Agency had been created precisely to avoid double dipping. This agency will look at all aspects including the provision of aftercare support to start-up co-operatives.
Mr Zikode said agriculture was the areas they wanted to focus on. It wanted 250 incubators developed by 2015 to assist co-operatives to become sustainable. He said lots of money was being pumped into big business and that if a cost benefit analysis had to be done on these investments into big business he was sure the returns would not be “rosy”.
The Deputy Minister said that it needed to be remembered that developing co-operatives was a medium to long term process of 30 to 40 years.
Wal-Mart /Massmart Report
The Committee Report on the Wal-Mart /Massmart merger was adopted.
The meeting was adjourned.
Present
- We don't have attendance info for this committee meeting
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.