Cooperating for greater good
According to Statistics South Africa’s latest unemployment figures released in June 2015, the unemployment rate in the country increased to 26.40% in the first quarter of 2015 from 24.30% in the fourth quarter of 2014.
According to the report, more young people are unemployed and face a further prospect of unemployment. Black African youths remain worse affected with regards to job and health prospects. It states that as many as 55 percent of young people who are actively looking for jobs have education levels below matric, while an additional 36.4 percent only have a matric qualification.
This Stats SA national and provincial labour market youth report from 2008 to the first quarter of 2015 indicates that the prospects of labour absorption among youth is also diminishing, pointing to a need for alternative legal means of not only making a living but creating jobs and alleviating poverty.
More efforts are required to direct young people in particular towards encouraging the establishment of small to medium enterprises.
This month the world marks International Cooperatives Month under the theme “Choose cooperatives, choose equality”. According to the United Nations Department of Economic and Social Affairs, equality counts among the six guiding values for cooperative enterprises.
Recognised world-wide for alleviating poverty and unemployment, particularly in rural areas, a cooperative is an autonomous association of persons united voluntarily to meet their common economic and social needs and aspirations through a jointly owned and democratically controlled enterprise. Cooperatives principles include voluntary and open membership, democratic member control, autonomy and concern for community. With such high levels of unemployment, poverty and inequality, cooperatives provide an opportunity and a vehicle for reorganising the economy and providing the much needed contribution to the socio-economic development of our communities and country.
Cooperatives are of-course not without their own challenges, as is the case with any form of enterprise or engagement in pursuing particular objectives. For instance, among the common challenges identified include lack of critical skills among cooperative members, limited cooperation among the cooperatives themselves, limited access to finance as well as markets, and lack of monitoring and evaluation of the development of cooperatives.
But there is more to gain. We can do so much towards poverty alleviation, job creation, and social integration if we focus on growing the cooperatives economy and encouraging more young people to establish and to be part of cooperatives.
So important is the role of cooperatives that the United Nations (UN) in 2012 declared that year as the year of cooperatives and encouraged all member states to promote them. This the UN did in recognition of the contribution of cooperatives to social and economic participation by all people as well as their potential to contribute to the eradication of poverty and the creation of sustainable livelihoods. It is in our countries best interest that we promote cooperatives as a means for greater collaboration and participation especially by young people who are currently not participating in conventional capitalist companies.
Such is the case in the village of Nwanedi in Musina where a group of young people with access to land came together to form cooperatives in different fields including vegetables and tomato farming, green beans as well as sugar beans. The National Youth Development Agency provided and continues to support this group of young people with both financial and non-financial business development support. These cooperatives have since gone on to acquire contracts with companies including TechnoServe, Tiger Brands and NTK Landbou to supply tomatoes as well as sugar beans.
We ought to encourage young people to also take advantage of existing platforms of cooperation including the Memorandum of Understanding signed between the BRICS countries to facilitate trade and investment cooperation among cooperatives and cooperatives enterprises among these countries.
One of the greatest hurdles we need to overcome is demystifying the popular perception and notion that cooperatives are only meant for those residing in the countryside or villages. We should instead position them as forms of creative enterprises that can contribute to the economy of the country and expand to other sectors over and above agriculture and farming which currently dominates the sector.
It will not be enough to only popularise cooperatives among young people, there must also be markets locally, nationally, regionally and internationally for their products and services. A partnership between the NYDA and the City of Tshwane seeks to address this through ensuring that young people who have received financial and non-financial cooperatives development support are given contracts by the municipality to provide a variety of services. Currently there are cooperatives trained and funded by the NYDA, now contracted by the City of Tshwane to provide catering for a period of 3 years, clean the City’s cemeteries as well as washing of the municipal fleet of cars.
The Marula Cooperative in Thohoyandou, Limpopo which manufactures cooking oil and beauty products such as lotions and soaps from Marula plant extracts is another practical example of how young people can stand up and be counted. The Cooperative is run by thirty members belonging to six different cooperatives working together. Collectively, the business received R1.2 million in Business Grant funding from the NYDA.
According to the Department of Trade and Industries Situational Analysis of Cooperatives in South Africa, cooperatives also have potential benefits over other types of enterprises. Among the benefits is Economies of scale as members are able to use joint purchasing power or bulk buying strategy which also proved to be effective in the running of informal trading and spaza shops among foreign nationals.
Another is Economies of scope, where through shared services, cooperatives can enjoy the benefits of shared services of labour and joint production facilities which facilitate the division and specialisation, thereby enhancing productivity and sustainability. Community participation and development is another important element of cooperatives, which gives them the potential to mobilise and develop the entire community and encourage a culture of saving within communities.
