"Co-operative enterprises provide the organisational means whereby a significant proportion of humanity is able to take into its own hands the tasks of creating productive employment, overcoming poverty and achieving social integration." Boutros Boutros-Ghali
It is therefore a great privilege and honour for me to be amongst you to celebrate this annual event, the international day for co-operatives, which is cherished as much in South Africa as internationally.
It is also an opportunity for South Africa to once again strengthen and extend partnerships between the international co-operative movement, government and all other stakeholders. And it is therefore a privilege to celebrate this International Day of Co-operatives in the company of the President of the International Cooperative Alliance (ICA), Mr Ivano Barberini.
Deputy President, when I addressed our national co-operative conference, more than three years ago, we asserted that in the context of the social structure of many South African communities, we would support the notion that co-operatives could be a very successful form of enterprise in our country.
We also made the point that while formal co-operatives had until that time predominantly been in the agricultural sector, we all knew of people involved in projects or stokvels which in their own way are co-operatives.
We therefore asserted that our key challenge was to grow this concept in our country, integrate it into existing mainstream economic activities, and use cooperatives as a means to tackle some of the challenges facing our country.
Certainly, while we understood that it was a deliberate policy of apartheid to deny black people access to the retail trade, or business activity, generally, this did not stop black communities from constructing consumer type co-operatives such as buying clubs, through the stokvels system (mutual savings and credit schemes and burial societies), which enabled communities to buy goods in bulk and at wholesale prices and arrange decent funerals for their loved ones.
So, despite this legacy, we find today that there are at least 800 000 active stokvels in South Africa with a total membership of approximately 10 million people, thus representing a formidable economic force in our country.
We therefore continue to believe that co-operatives can and should make a bigger contribution to economic prosperity for all in our country. In this light we can rightly claim that democracy ushered in a new era in the development of co-operatives in South Africa, In this regard, government sought to promote co-operatives in all sectors of the South African economy and not only in the agriculture sector, which used to be the case previously.
We thus saw, for the first time, black owned co-operatives being formed in different sectors of the country's economy, including manufacturing; construction, transport, housing, services, and information technology, trading, mining, fishing, bakeries, arts and culture and timber.
Distinguished guests, by 2005, the promulgation of the new Co-operatives Act, facilitated a boom in the registration of new co-operatives. According to the Companies and Intellectual Property Registration Office register, 12 188 new co-operatives were registered from 2005 to 2007 in various sectors, representing a 72% growth rate.
In fact, during that period, the number of new co-operatives registered was almost triple the number of co-operatives registered during the previous 82 years from 1922 to 2004. In a significant development, the majority of these new co-operatives are black women owned and youth owned co-operatives have also begun to emerge. However, we are aware that many of these new entrants are vulnerable and require high and sustained levels of support, if they are to prosper.
Overall, the total number of co-operatives registered is approximately 17 000. Of these 40% are registered in KwaZulu-Natal, 19%; in the Eastern Cape and 10%in Gauteng. The high concentration of co-operatives in these provinces is attributed to the availability of financial and non-financial support measures and the extent of procurement opportunities for co-operatives. In this regard, KwaZulu-Natal, especially, has managed to achieve high levels of performance and provides best practice worth emulating by others.
We are also aware that in spite of the emerging diversity of co-operative activity, the majority, totalling 27%, can still be found in the agricultural sector. The dominance of the agricultural co-operatives is probably due to the historical stereotype in relation to co-operatives being in the agricultural sector and the fact that in most rural economies, often the only opportunities available are in the agricultural sector.
However, the multi purpose sector is leading the pack in the new wave of co-operatives and already constitutes 25% of the total number of co-operatives in the economy. This strong showing of the multi purpose co-operatives can be largely attributed to opportunities being opened up in all spheres of government through the procurement of services from cooperatives. The third major sector for co-operatives is the services sector constituting 19%.
Deputy President, we have had the opportunity to report to you some of this progress and I am aware that the Department of Trade and Industry has presented, to this conference, a national status report on the promotion of co-operatives.
In as much as we can take pride in the advances we have made, in the relatively brief period since the dawn of democracy, we are fully aware of the challenges that remain. So, we must consider steps to reduce the vulnerability of emerging co-operatives. We must continue to improve access to financial support and markets. We must, amongst other steps support the growth of management and technical skills to allow co-operatives to sustain and grow their business.
But we also know that internationally, one of the critical determinants of the co-operative success is the existence of a strong and vibrant co-operative movement. This is because a co-operative movement serves as the voice of co-operatives in the country, engages policy processes, builds reach for co-operatives into the national and global economy, provides services such as education and training to member co-operatives, strengthens the sector, as well as ensures that co-operatives principles are adhered to.
It was therefore important that this co-operatives conference week also be designed with the purpose of allowing co-operatives to start a process of engagement towards the revival of a South African Co-operatives Apex Body which can play a meaningful role in shaping policies, strategies and legislation.
But, government encourages co-operatives to do this in a manner that ensures compliance with the core principle of co-operatives such as democracy, equity and full participation. The process must be a bottom up rather than a top down if we are to proceed successfully.
Indeed, to be successful co-operatives should be people's organisations which empower their members. And because co-operatives are enterprises committed to improving the economic, social and environmental situation of their members and the communities in which they operate, the South African government remains committed towards the promotion and development of co-operatives for our nation.
I therefore trust that during these past few days the seminars were successful in disseminating information that empowered co-operatives, non-governmental organisations, policy makers and government officials actively involved in the promotion of co-operatives.
And I am glad to learn of the extent to which the co-operatives week allowed the partnership between government and co-operatives to be strengthened. We must also use this opportunity to thank the various international and local speakers and experts from government, non governmental organisation (NGO) sector and the co-operative movement for sharing this platform and presenting papers covering topics relevant to co-operatives development in South Africa.
Ladies and gentlemen, as you are aware, we have as government, also drawn on this opportunity to present a draft co-operative strategy in our ongoing efforts to sharpen our focus on best practice.
In summary the strategy seeks to achieve an increase in the value, numbers and variety of co-operatives enterprises in South Africa to position co-operatives to contribute towards an acceleration of economic growth, to position co-operatives as a vehicle that contributes towards reducing poverty and unemployment, to raise the profile of co-operatives to be viewed not only as poverty relief vehicles but also as credible businesses that provide options to people with potential social entrepreneurial acumen covering a wide market spectrum such as individuals at community level, graduates, business people and households, to raise the number of people who are members and use co-operatives.
The strategy also aims to position co-operatives development as one of the national and provincial priorities similar to our strategies regarding poverty alleviation and food security.
Finally, the draft strategy outlines ways in which co-operatives can contribute towards economic transformation, and focus on the development of rural and peri urban areas of the economy as well as women, the youth and people with disabilities, amongst others.
We very much value your inputs in the course of the week and thank you for your contributions. It is certainly our intention to finalise this strategy and ensure its implementation as soon as possible so as to ensure the promotion of co-operatives in South Africa.
Finally, I must thank you for your attendance at this important conference and trust that you have gained as much value as we have. It is now my privilege to introduce the Deputy President of the Republic of South Africa, Phumzile Mlambo-Ngcuka.
