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Louw Van Der Walt: Research Africa

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Louw Van Der Walt, North West University, S. Africa at the International Co-operative Alliance Global Conference in Cape Town, November 2013.

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Louw Van Der Walt: Research Africa

  1. 1. ICA CAPE TOWN November 2013 Louw vd Walt North-West University South Africa
  2. 2. Cooperatives in South Africa  Since the early 1900s, cooperative were mainly found in the          agricultural sector Since 1994, the majority of big agri-coops have converted into companies The trend currently is more towards the non-agricultural sector. Recent research showed the following: 22 030 registered co-operatives 65% – fewer than 10 members 0.75% of GDP 84% employ fewer than 15 people 70% – turnover < R 50,000 p.a. 31% – turnover < R5,000 p.a.
  3. 3. Coops in SA  Coop sector still very active; popular in all sectors of economy This tendency is in line with aim of government to use coops to: * support informal entrepreneurs * use cooperatives as development tool  Success rate of coops is unfortunately measured i.t.o. numbers  Many coops might not be operational any more  Research proved this
  4. 4. Coops and rural development  • • • • • • Success of rural development depends on: Degree to which community can utilise farming land successfully Ability to create employment for people not in agriculture Development programmes must include entrepreneurial development Cooperative might be answer to successful community building Financial support during initial stages is indispensable Government should contribute to establish environment that supports private investment  Although the Government recognises and promotes the cooperative as an ideal business form for economic development, and potential entrepreneurs are very enthusiastic about the business form, there are serious handicaps..
  5. 5. Research projects  Resuscitation of the cooperative sector in the Limpopo Province of SA  The use of the cooperative as tool for rural development  The transformation of cooperatives into companies  Determinants for the success of workers cooperatives
  6. 6. Results Limpopo study  Members do not have necessary knowledge      about cooperatives ( 80%) Members were not informed about cooperative principles and expectations Wrong mindset about coops Government main provider of finance Local banks are reluctant to provide loans Lack of managerial skills
  7. 7. Problems identified during research Many new established cooperatives failed Problems identifies were:  effective management,  member commitment,  entrepreneurial mindset, not member-driven initiative  conflict among members, directors and community leaders  shortage of capital
  8. 8. Results: Transformation into companies Majority of respondents indicated that:  cooperative added more value to farming      activities service delivery of cooperative was more effective they missed the close relationship that existed between coop and member marketing was done more effectively by coop companies are not involved in community the majority of respondents felt that it was the wrong decision to convert
  9. 9. Results: Rural development  Poor management indicated as the most      important reason for failure Members do not want to get involved in management High percentage of members do not support the cooperative Members rely too heavily on appointed staff and directors to run cooperative Although cooperative is very popular, members must accept responsibility Above-mentioned problems might create conflict, which will lead to termination of cooperative
  10. 10. What do we need for strong cooperative sector?  Need for a study to evaluate cooperative sector to determine success rate and implement necessary steps Issues that needs to be addressed:  Change the mind set of future coopentrepreneurs(coop-preneurs)  Effective management training  Adequate entrepreneurial skills/training for directors and staff  Start-up capital  Mentorship programme, especially during establishment phase  Supporting research
  11. 11. The way forward Education  More cooperative focused training, not generic training programmes  Establishment of institutes or centres for cooperatives linked to tertiary institutions( NMMU, Univ Fort Hare)  Start formal cooperative training at under-graduate level  Partnerships between cooperatives and educational institutions at provincial level Research  Collaboration between African countries to strengthen the research basis  Joint research projects between universities internationally  Encourage post- graduate students to do research on cooperatives  Cooperative college/university
  12. 12. THANK YOU

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