A recent amendment to the Cooperatives Act of 2005 will seek to establish various cooperative support institutions, advance the establishment of cooperatives in South Africa and ensure that these organisations are afforded equal economic opportunity, Trade and Industry Minister Dr Rob Davies has said.

He told delegates at the International Cooperatives Day celebrations, hosted by the Department of Trade and Industry, in Durban, that, despite the establishment of several State-driven incentive schemes and interventions, there was little appreciation for the importance, significance and potential of the cooperatives model in the country.

“Actually, too many people in South Africa think of cooperatives as something akin to welfare and charity,” the Minister stated.

“We are struggling to understand that what defines cooperatives is not whether they are big or small, but that they are creative enterprises that can contribute enormously to the country’s economy, owing to their accessibility and the fact that they can be rolled out to other sectors of the economy,” Davies commented.

The amendment would see the development of support institutions, such as the Cooperatives Development Agency, the Cooperatives Academy and the Cooperatives Tribunal.

The Cooperatives Development Agency would provide financial and nonfinancial support services, while the Cooperatives Academy would provide education and training, and the Cooperatives Tribunal would assist cooperatives in resolving internal conflicts.

These would follow the etsablishment of previous interventions, such as the Cooperatives Incentives Scheme, which Davies said had provided R84-million in support to 315 cooperatives in the last financial year.

He added that, in addition to these grants, cooperatives were provided with assistance on how to gain access to both international and regional markets.

“For instance, 150 cooperatives were assisted in this regard in 2012, while this year, 20 cooperatives have been approved to participate in an exhibition in Chicago, in the US, later this month. Moreover, we have supported cooperative representative organisations at several international and regional engagements,” said the Minister.

However, he admitted that these initiatives and interventions had not been sufficient, despite government having “raised its game” to support cooperatives. 

“There is a need to have dedicated packages of financial and nonfinancial services to support the development of cooperatives, big and small,” he commented.

South African Apex Cooperative (Sanaco) president Lawrence Bale added that the potential of cooperatives to develop as a formally recognised form of business was yet to be realised in South Africa.

“Sanaco pledges support for government’s efforts to raise the level of cooperatives in the country,” he said.