Mutshamaxitulu, Xandla xa Mutshamaxitulu, Xandla xa Presidente xikan'we na Swirho swa Huvo, ndza mi losa. Namuntlha hi fanele ku tsundzuka swilo swinharhu leswi nga eka Tsalwa ra Ntshuxeko. Xo sungula, vanhu va ta fambisa. Xa vumbirhi, vanhu va ta fanela ku avelana rifuwo ra tiko. Xa vunharhu, misava yi ta averiwa lava va yi tirhaka. Ndza swi tiva leswaku lexi xa vava eka vanhu van'wana. Xa vumune, ku ta va na mitirho na vusirheleri. (Translation of Xitsonga paragraph follows.)
[Mr X MABASA: Chairperson, Deputy Chairperson, Deputy President as well as Members of the House, I salute you. Today we have to remember three things that are in the Freedom Charter. Firstly, the people shall govern. Secondly, the people shall share in the country's wealth. Thirdly, the land shall be shared among those who work it. I know this is painful to some of the people. Fourthly, there shall be work and security.]
This debate takes place as we are focusing on what is often neglected in our economy. We are focusing on how to bring more of our people into the mainstream economy through the use of co-operatives and micro-enterprises. When I talk of co-operatives and small, medium and micro-enterprises, SMMEs, I want you to visualise a group of doctors who get together to form a health co-operative. If you go into one room, you find a dentist, in another room a physician and in another you'll find the ... [Interjections.] ... you have said it for me. [Laughter.]
I want you to imagine an economy where engineers also get together and say, let us form a co-operative. There is the Small Enterprise Development Agency, Seda, which will help us with skills. The Minister of Trade and Industry will also help us with funds and the Minister of Economic Development will help us through the Small Enterprise Finance Agency, Sefa, which is the new organisation that has been formed out of the combination of Khula, Samaf and the small arm of the IDC. [Interjections.] I would advise members on the left not to make me angry, because if they do, I may soon remind them about their grandfather, Verwoerd, who got us into the mess we find ourselves in. [Interjections.]
Order! Order, please!
Millions of South Africans have been failed by the business sector and large companies which have not created jobs on the required scale. Co-operatives are an important way of harnessing the energy and entrepreneurship of our people and they can provide an alternative way of production and distribution. If we look around the world today, there are excellent examples of co-operatives and other socioeconomic enterprises which are commercially successful and socially responsible. You do not have to look far; look at my jacket and you are looking at a product of a co- operative. [Applause.]
In Spain, co-operatives are at the cutting edge of new technology, producing goods that are sold domestically and exported. Tens of thousands of jobs are created. In India, Kenya and Tanzania rural co-operatives are an important part of the world's largest dairy industry, producing milk and other products like cheese and yoghurt on a commercially successful basis, but also empowering the rural poor.
In South Africa, white farmers relied on co-operatives - but you should know that better than me - in many value chains, from wool, milk and wine, to become successful. Today, our challenge is to take the powerful idea of economic solidarity that is at the heart of co-operatives and social economy and give it technical strength to enable it to succeed in a mixed economy. As to how we do that, Comrade Gcwabaza ...
... uma ufika la ubatshele kungene kuhlale kubo. [... when you arrive here, tell them in such a way that it sticks in their minds.] [Intejections.]
The Seda of the Department of Trade and Industry, and Sefa of Economic Development are there as empowering agencies. The Department of Higher Education, through Setas, is also there to provide training and ensure proper standards. The yoghurt I was talking about is high-grade yoghurt from Kenya. It is universally accepted that a market economy is imperfect and subsequently unable to address some of the needs of the citizenry. Many developed and developing countries have come to appreciate the value of co- operatives. I am talking about countries like Spain, Kenya, the UK and Canada. [Interjections.] There, they appreciate the value of co-operatives.
School nutrition programmes offer a great opportunity for SMMEs and co- operatives. Schools should be empowered to help local co-operatives of women to supply the school meals that the young children need. This should be accompanied by business training for local co-operative members. Indeed, for unemployed parents, if drawn into this, it becomes an opportunity for social organisation, income generation and to provide support to the households of the very students that are being fed at school. So, their parents have an opportunity to feed them during lunchtime at school. The same principle could be applied to a portion of hospital catering contracts. Over time, local communities can branch out into other areas using the procurement opportunity as the gap they need to get into the market. Catering at a hospital must be seen as a stepping stone to greater heights. If co-operatives were here, I would be saying to them, when they have these opportunities of catering at schools and in hospitals, they must not regard that as the end of journey, but see it as a step towards greater things.
And now, Comrade Chairperson, I want to advise ... [Time expired.]
Chairperson, South Africa's history shows that white co- operatives played a significant role in the South African economy. In 1993, there were about 250 of these co-operatives with total assets worth R12,7 billion. This was achieved with some government intervention at the time.
Co-operatives, particularly those in the agricultural sector, have long been recognised to play an important role in society. They offer the institutional framework through which local communities gain control over productive activities and from which they derive their livelihoods.
According to the Companies and Intellectual Property Commission, there were almost 55 000 registered co-operatives in South Africa by the end of January 2012. Forty-seven percent of these were agricultural co-operatives. Despite the important role that these co-operatives play in the economy, smallholder farmers have not been able to establish viable and sustainable co-operatives that contribute significantly to the national economy.
The main challenges facing these co-operatives are the lack of demand for their products due to poor market access and lack of access to formal financing mechanisms in the absence of collaterals. So, what is the problem and how do we tackle it?
Die Nasionale Ontwikkelingsplan identifiseer landbou as 'n sektor wat teen 2030 werkgeleenthede vir 300 000 huishoudings in die kleinboerskemas asook 145 000 poste in landbouverwerking kan skep. Verder is daar ongeveer 2 miljoen huishoudings in Suid-Afrika met toegang tot landbougrond. As hulle sekuriteit vir hul grond kan kry, kan dit met toegang tot finansiering help. (Translation of Afrikaans paragraph follows.)
[The National Development Plan identifies agriculture as a sector that could create job opportunities for 300 000 households in the smallholder schemes, as well as 145 000 posts in agricultural processing by 2030. Furthermore, there are about 2 million households in South Africa with access to agricultural land. If they could be granted security for their land, it could assist with access to financing.]
Minister Nkwinti, I'm speaking to you.
As daar na hierdie syfers gekyk word, behoort almal in Suid-Afrika saam te stem dat landbou 'n prioriteit vir die regering behoort te wees. [Considering these figures, everyone in South Africa has to agree that agriculture should be a priority for the government.]
The Department of Agriculture, Forestry and Fisheries has programmes for the development of small-scale farmers. In fact, the biggest chunk of the department's budget is aimed at the development of small-scale farmers, and correctly so. I'm sure most members would have heard about the Comprehensive Agricultural Support Programme, Casp, before.
Since 2004, an amount of R8 billion has been spent between all the programmes of the department, which include Casp; Ilima/Letsema; and the Micro-Agricultural Financial Institutions of SA, Mafisa. This is a huge amount of money but, unfortunately, we see little progress, with most small- scale farmers still struggling to survive.
Die hoofoorsaak van hierdie probleem kan gevind word by die swak beplanning en kordinasie tussen departemente. Die linkerhand weet nie wat die regterhand doen nie.
Kleinboerontwikkeling is soos 'n afkophoender. Di van ons wat in die platteland grootgeword het, sal weet waarvan ek praat. 'n Tipiese voorbeeld hiervan is die inspuiting van R1,8 miljard wat vir die biobrandstofprojek op Cradock goedgekeur is. Hierdie bedrag is gegee om te verseker dat daar teen einde Mei 2014 met die vervaardiging van groener brandstof begin kan word. Dit is 'n uitstekende plan en kan baie werkgeleenthede in die platteland bevorder.
Die probleem egter is dat die Departement van Landelike Ontwikkeling en Grondhervorming 'n hele klomp plase in die Cradock-omgewing uitgekoop het sonder dat daar behoorlike skakeling met ander departemente soos, byvoorbeeld, landbou was. Hierdie plase l op di stadium ongebruik en het net tot werkloosheid in Cradock bygedra, aangesien baie van die plaaswerkers daar nou ook werkloos is. Dit sal weer herkapitalisering van die staat vra om die plase weer in 'n werkende toestand te kry.
Daar is in Maart 2012 'n werkswinkel gehou om probleme met koperatiewe te bespreek. Dit was 'n goeie idee, en daar is baie voorstelle gemaak. Dit is egter al wat nog daar gebeur het. Amper 'n jaar later is daar nog geen vordering gemaak nie, en sukkel die meeste koperatiewe nog steeds met probleme soos finansiering en bemarking. Al weer baie praat, en geen aksie nie. (Translation of Afrikaans paragraphs follows.)
[The main cause of this challenge is found in bad planning and co- ordination among departments. The left hand does not know what the right hand is doing.
Small-scale farmer development is like a chicken without a head. Those of us who grew up in the rural areas will know what I am talking about. A typical example of this is the injection of R1,8 billion that had been approved for the biofuel project in Cradock. This amount was given to ensure that the production of greener fuels would start by the end of May. It is an excellent plan and could create many job opportunities in the rural areas.
However, the challenge here is that the Department of Agricultural Development and Land Reform bought out many of the farms in the Cradock area without proper liaison with other departments, for instance with Agriculture. At the moment these farms are lying fallow and are only contributing to unemployment in Cradock given the fact that many of the farm workers there are now unemployed as well. The state will have to recapitalise again in order to get these farms operational.
In March 2012, a workshop was held to discuss the challenges with co- operatives. This proved to be a good initiative, and many proposals were made. Yet, it is the only thing that happened there. It is almost a year later and still no progress has been made, and most co-operatives are still struggling with problems such as funding and marketing. Again, a case of too much talking and no action.]
The DA believes that co-operatives could play a crucial role in the development of small-scale farmers and ensuring food security, especially at local level. But for this to become a sustainable solution, we need dedicated and committed departments with clear programmes. We need a one- stop shop to assist with business plans, financing and training needs. If this is not put in place, co-operatives will stay a talk shop with no action. I thank you. [Applause.]
Hon Chairperson and hon Deputy President, co-operatives arise from an economic process that is rooted in the values and principles of co-operation and democratic processes. Co-operatives develop as a result of members coming together due to common needs and have the following characteristics if they are to be effective: they have democratic governance; and a one-member, one-vote applies. Therefore, there is no shareholding system that exists in co-operatives.
Ongoing education and training are provided for members regarding democracy and all aspects of co-operation and co-operatives. Co-operatives promote community employment and job retention; and profits are sought to meet the long-term goals and enable strategies that meet the needs of all members, rather than those of state bureaucracy and market forces.
Their business models are viable locally, nationally and internationally and are supposed to be resilient in times of global or national economic crisis. Co-operatives are active in all sectors of the economy, including manufacturing, agriculture and agri-food, retail, financial and social services. This assists with poverty reduction, food security, access to health care and mitigating the impact of crises on vulnerable populations.
Within the South African context, after 1994, the South African government sought to create a positive climate for the development of the co- operatives within the economy. The Co-operative Development Policy for SA and the Co-operatives Act were brought into being. The widening of micro- finance included the SA Micro-Finance Apex Fund and agencies like the Micro- Agricultural Financial Institutions of SA, Mafisa, an agricultural micro credit fund. The Small Enterprise Development Agency was attempted as a national representative body. A youth co-operatives programme was developed and the Communal Land Rights Act was also proposed.
However, there were obstacles, and one of those obstacles was the policy of broad-based black economic empowerment, BBBEE. Unfortunately, it entrenched the racial divide between previously whites-only co-operatives and emerging black co-operatives. This prevented the fostering of collaboration between co-operatives, which is crucial to their economic functioning. There was no cross-pollination and transfer of skills from the old to the new.
The policy pillars, however, were aimed at creating an enabling environment for the development and functioning of co-operatives. Under the Mbeki government, they were seen as a crucial part of the second economy that drove South African development and was introduced in 2007. However, in the Department of Trade and Industry, there was a conflation of co-operatives with small and medium enterprises and they were expected to follow the business practices of the small and medium enterprises. They were expected to participate in the free and open market.
The process of establishing an umbrella body of co-operatives in South Africa failed during this period. A top-down approach was taken both by the international funders, the Canadians in particular, and the Department of Trade and Industry in this regard, which resulted in co-operative organisations withdrawing from the process and the collapse of the National Co-operative Association of SA.
In 2012, there were pillars that were introduced. The first one was the establishment of the Co-operative Development Agency; creation of demand for co-operative products and services through existing bilateral agreements; the enterprise networks programme that promotes vertical and horizontal integration of primary and secondary co-operatives and supports shared services; increased financial support services to co-operatives; and assistance to develop financial systems through the formation of co- operative banks. I thank you. [Time expired.]
Chairperson, the concept of co-operatives was first established by the then Chief Minister of KwaZulu, the hon Prince and Dr M G Buthelezi, to encourage self-help and self-reliance through co-operatives to enable people to help and rely on themselves. In this era, it was important that those who were oppressed were empowered and enabled.
Co-operatives' registration started in KwaZulu, the first being in Mpumalanga township and from there in Nongoma and Pongola. The co- operatives assisted people in creating their own business opportunities. Other co-operatives that were launched are Phambili Ntuthuko Community Development Co-operative in Eshowe, where the hon Prince Buthelezi encouraged people to stand up and do things to develop themselves. The visionary leadership of hon Buthelezi pioneered the concept of co- operatives and savings clubs among women, the youth and rural communities.
During the political transition period, these initiatives started deteriorating due to politicisation and lack of support for co-operative initiatives. It became a good success, but because of lack of funds, some did not survive. Even now, the IFP has employed Prof Okoye, an expert on co- operatives, to assist our citizens with registration and funding of co- operatives.
There are many challenges that face co-operatives. Firstly, lack of an enabling environment for co-operatives to thrive. The government has left co-operatives to compete with already established commercial businesses, thereby stifling their development. There is a need for an enabling environment in terms of one, special concessions on tariffs; two, exemptions from some taxes; and three, creating a special taxation regime for co-operatives.
Secondly, co-operatives have been lumped together with black economic empowerment, BEE, and small, medium and micro enterprise, SMME, environments. This does not allow co-operatives to thrive as economic entities.
The third challenge is that the government has allowed cheap goods, mainly from China, to flood the market and they have penetrated even in rural communities. This has killed local entrepreneurship, including co- operatives.
The fourth is that there are too many players in the co-operative field and this gives rise to a lack of co-ordination. Sometimes there is duplication of rules of government agencies, departments and even local governments, including municipalities. The fifth is that comprehensive support programmes for co-operatives with definable features, goals and objectives is lacking. This is essential so that the development of co-operatives can be measured.
The sixth is the lack of an organisational structure for co-operatives, starting with a director of co-operatives at national level, coming down to provincial and district levels.
The seventh is that support for co-operatives has sometimes been politicised to the extent that it is perceived that the government has poured money into co-operatives for political gain, which shows that support for co-operatives is superficial and not properly co-ordinated, and thus not to be taken seriously. I thank you.
Chairperson, hon Ministers and Deputy Ministers, and hon members, co-operatives have a long and successful tradition of promoting inclusive economic growth in many developed countries and developing countries. They are enterprises through which jobs can be created to eradicate poverty and inequality. In many countries where co-operative movements have grown over many years, they have proven to be able to provide a wide variety of goods and services to the consumers, including institutions of state.
Inhlangano kaKhongolose nayo iphokophekelele ukuthi igqugquzele ukwakheka kwezinhlangano ezincane ezisebenza ngokubambisana kanye nosomabhizinisi abancane, ikakhulukazi phakathi kwabantu bakithi abakade bengavumelekile ukuthi babe yingxenye yomnotho waleli lizwe esikhathini esiphambili. (Translation of isiZulu paragraph follows.)
[The ANC government is also aiming to promote the establishment of co- operatives and SMMEs, especially amongst our people who were previously not allowed to be part of the country's economy.]
Therefore, I want to turn my attention to the policy frameworks which allow the ANC government to attend to this important matter of mobilising co- operatives and small, medium and micro enterprises, SMMEs, as a way of allowing the majority of our people active participation in the mainstream economy. I refer particularly to the Co-operatives Amendment Bill, the Broad-Based Black Economic Empowerment Amendment Bill, which is in process here in Parliament currently, and the Preferential Procurement Policy Framework Act, 2000: Preferential Procurement Regulations, 2011. These policy frameworks all recognise that co-operatives are independent enterprises owned by their own members. Because government acknowledges the need to promote growing, sustainable and competitive co-operatives, it seeks to use the Preferential Procurement Policy Framework Act and the other pieces of legislation that I have mentioned to form strong partnerships with co-operatives.
The Preferential Procurement Policy Framework Act allows the organs of state to buy goods and services from co-operatives and SMMEs so that the institutions of state provide a ready market for the co-operatives. These pieces of legislation open up opportunities for the historically disadvantaged individuals, the unemployed youth, rural communities and persons with disabilities. These opportunities allow the beneficiaries to begin to play an active role in the mainstream of the economy.
Isahluko 13(1) soMthethosisekelo sikhuluma ngemigomo yokwaba amaphuzu uma uMnyango kahulumeni ukhipha ithenda, sithi kufanele kubhekelelwe lezo zinkampani ezincane ezisebenza ngokubambisana eziphethwe yilabo bantu ababebandlululiwe kwezomnotho ngesikhathi sikahulumeni wobandlululo. Lesi sahluko siqhubeka sithi kufanele kuqikelelwe ukuthi lezi zinkampani ezincane kanye nezinkampani ezisebenza ngokubambisana ziphethwe yibo uqobo, nokuthi amasheya abo kulezi nkampani abanikeza igunya lokuzilawula lezi nkampani. (Translation of isiZulu paragraph follows.)
[Chapter 13(1) of the Constitution stipulates the procedures to be followed in allocating points when a government department is awarding a tender; it stipulates that preference should be given to co-operatives that are managed by historically disadvantaged individuals who were excluded in the economy during the time of the apartheid government. This Chapter further states that these co-operatives and SMMEs should be managed by them, and that their shares in these companies give them a right to manage these companies.] Section 13(12) goes further to stipulate that -
... a person awarded a contract as a result of preference for contracting with, or providing equity ownership to, an historically disadvantaged individual, may not subcontract more than 25% of the value of the contract to a person who is not an historically disadvantaged individual or does not qualify for such preference.
It makes it imperative that members of the co-operatives acquire skills and knowledge in management as it promotes active involvement in management, ownership and control. Of significanc, too, is that the emphasis on active involvement in ownership, control and management as tools to justify preferential procurement will effectively prevent and punish fronting.
Kuzovimbeleka laba abathanda ukuveza ubuso obumnyama ezinkampanini kanti bona bahleli ngemuva. Lokhu kuzosiza ngokuthi bangakwazi ukwenza lokho nokuthi uma bezama ukwenza njalo bathole isijeziso. Lokhu kuqikelela ukuthi abantu bakithi bayaziphathela izinkampani bazilawule futhi. (Translation of isiZulu paragraph follows.)
[This will prevent fronting in companies. This will assist in preventing people from doing this, and if they try to do this, punitive measures will be taken. This will ensure that our people manage and control their companies.] The Preferential Procurement Policy Framework Act demands of state institutions to award contracts to co-operatives that manufacture products locally. These locally manufactured products must have local content.
Ukuze kuvikeleke ukuthi abantu bangathi bayizinkampani ezincane ezisebenza ngokubambisana ezihlinzeka ngezimpahla nezinsiza kanti nabo bathenga lezi zinto emazweni angaphandle bazozidayisa la ngaphakathi. Lokho-ke kugcina kwehlula imigomo ye-Industrial Policy Action Plan kanye ne-New Growth Path ... (Translation of isiZulu paragraph follows.)
[This is to ensure that people do not say that they are co-operatives and SMMEs that manufacture and provide goods and services when in fact they are buying these goods from other countries and selling them locally. This defeats the principles of the Industrial Policy Action Plan and the New Growth Path ...]
... which seeks to encourage that manufacturing, beneficiation and value addition take place domestically and that value addition is ensured. The Preferential Procurement Policy Framework Act therefore creates a legislative environment for co-operatives which is conducive to their being competitive and becoming exporters of locally manufactured value-added goods.
The ANC government will mobilise our people to take advantage of the Co- operatives Amendment Bill, the Preferential Procurement Policy Framework Act and the Broad-Based Black Economic Empowerment Amendment Bill and establish SMMEs and co-operatives in order to become active participants and role-players in inclusive economic growth.
Sithi-ke kubantu bakithi mabagqugquzeleke, basukume bazibambele ukuze nabo balwe ngokwabo nobubha, ukuntula imisebenzi, nokungalingani ngokwezomnotho kuze kuthi abantu bakithi ekugcineni baziphathele izimboni ngokwabo. Ngalokhu asisho ukuthi sebeyohlala bencike ezinkontilekeni abazithola kuhulumeni kuphela. Sizogqugquzela ukuthi ngemuva kokuthi sebesebenze nohulumeni babe ngosomabhizinisi abazimele ngokwabo, bakwazi ukuzakhela imisebenzi baphinde baqashe abantu. Banganciki noma beyame emisebenzini abayithola kuhulumeni.
Le mithetho iyisiqalo salolu hambo olude lokuthi abantu bakithi basebenzise izinkampani ezincane ezisebenza ngokubambisana ukuze bangene ngokugcwele kwezomnotho. Ngiyabonga. [Ihlombe.] (Translation of isiZulu paragraphs follows.)
[Therefore we are saying to our people they must be encouraged, they must stand up and take charge so that they fight poverty, lack of employment and economic inequality so that at the end of the day our people manage their own companies. By this we are not saying that they must only depend on contracts they receive from government. We will encourage them, after they have worked with government, to become independent entrepreneurs, who are able to create job opportunities and employ people and not to depend on government contracts.
These policies are the foundation of a long journey that will allow our people to use the small co-operative enterprises to be fully included in the economy. Thank you. [Applause.]]
Chairperson, I would like to thank the hon Mr Mabasa for calling for this debate, one that is sorely needed to save our country from the dire pitfalls of extreme poverty and the plagues that go with this scourge. In my private discussion with the hon Mr Mabasa regarding the problems we face as Africans, as a collection of peoples and as individuals, I have discovered that we might differ on methodology and process, but not necessarily on the outcome for the peoples of this country.
We all want a better life through the destruction of poverty and the upliftment of the poverty-stricken. We are in agreement that in endeavouring to solve these problems, we must not also create new victims that are dragged into poverty based on race only. Sometimes I think that the hon Mr Mabasa and his ANC colleagues on the Trade and Industry Committee are coming round to thinking like the FF Plus. Even the hon Sue van der Merwe of the ANC is starting to agree with me. So, I think it will soon start snowing!
Hierdie debat plaas die klem op koperasies en klein besighede as die krag agter ekonomiese ontwikkeling en werkskepping. Dit is presies wat nodig is om ons sosiaal-ekonomiese problematiek aan te pak. Dit is 'n feit dat klein besighede die grootste werkskeppers in ons ekonomie is. Net 2% van alle firmas kan as groot beskou word. Hulle het dus 'n baie kleiner aandeel tot werkskepping, alhoewel nie onbelangrik nie, want die kleiner firmas maak op hulle beurt weer ekonomiese konneksies met die groot firmas. (Translation of Afrikaans paragraph follows.)
[This debate emphasises co-operatives and small enterprises as the force behind economic development and job creation. This is precisely what is required to tackle our socio-economic problems. It is a fact that small enterprises are the biggest job creators in our economy. Only 2% of all enterprises can be regarded as big. Consequently they make a much smaller contribution to job creation, although not an insignificant one, since the smaller enterprises in turn have economic connections with the bigger enterprises.]
Thus, the focus on the small enterprises and co-operatives is correct, and ample support must be provided for them to flourish as instruments against poverty.
However, with regard to the macroeconomic environment, there is one major problem that keeps the economy from booming. That is the belief that one must keep whites out of the economic system so that it can be accessible by the black majority. Interventions like affirmative action and black economic empowerment that only enrich a few connected individuals do not grow the economy, and leave the black majority fighting amongst each other for a diminishing number of positions.
This is basically a race to the bottom. No scientific study exists that these measures have grown the economy in an accelerated form, as is needed for poverty reduction, and that these measures have not created new victims. The facts actually show the reverse. Only a few blacks benefit from these measures and hundreds of thousands of new victims have been created, mostly white, coloured and Indian. It sends a message that there is no place for minorities in South Africa. It is therefore of the utmost importance to address this issue, as no amount of support for co-operatives and micro enterprises will help if the economy is not inclusive and white expertise is not allowed to act as mentorship for up-and-coming entrepreneurs.
Die regering moet homself afvra hoe hy verder markingrypings soos regstellende aksie en swart ekonomiese bemagtiging teen die agtergrond van groeiende blanke armoede kan regverdig. [The government needs to ask itself how it can justify further market interventions such as affirmative action and black economic empowerment against the background of increasing poverty amongst whites.]
The effect of keeping these laws of discrimination alive is that they will, over time, become a permanent feature. No one will have the political will to eradicate them, permanently relegating minorities to second-class citizenship. The effect thereof will be that a growing number of minorities will start rising up against this system, which will lead to unrest and social cohesion.
Daarom is dit belangrik dat, indien ons die probleme van die land wil aanpak, almal aan die einde van die dag tuis moet voel en dat ons 'n inklusiewe ekonomie sal kweek. [That is why it is important that, if we wish to address the country's problems, at the end of the day everyone should feel at home and lack of that we will cultivate an inclusive economy.]
Thank you.
Chairperson, the ACDP firmly believes that co-operatives and micro enterprises can most definitely contribute to the reduction of poverty, to personal and group empowerment and to job creation in South Africa. Sustainable livelihoods are crucial for South Africa, with, as we know, high levels of unemployment and poverty presenting the most severe threat to social and political stability in the country.
Microfinance is, however, critical for the success of co-operatives and micro enterprises. We in the ACDP would like to focus on this today. Microfinance is the supply of credit and other basic financial services to poor and vulnerable people who might otherwise have no access to them or could borrow only on highly unfavourable terms.
Nobel Peace Prize winner and founder of the Grameen Bank in Bangladesh, Mr Muhammad Yunus, said:
All human beings are born entrepreneurs. Some get the opportunity to find this out, but some never get this opportunity. A small loan can be a ticket to exploration of personal ability.
The Grameen Bank successfully addressed the most serious obstacle facing the poor entrepreneur - that is access to credit. In a working capital poverty trap, a microentrepreneur has little or no inventory to be productive in sales. This bank illustrated how credit can be provided to the poor while minimising the risk that loans will not be repaid.
Since its founding in 1983, the Grameen Bank has enabled several million poor Bangladeshis to start or upgrade their small businesses. Significantly, 97% of the borrowers are women, with high rates of repayment. To qualify for loans without collateral, potential borrowers form five-member groups which undergo training and meet weekly with a bank official. They rely mainly on what is termed collateral peer pressure, with strong social pressure in the group on members to repay. Through this process, Bangladesh transformed itself from a symbol of famine to a symbol of hope.
South Africans can undoubtedly learn from this experience. Microloans play an important role in start-up capital for small businesses in the country. Can one not take this concept further? For example, could our present stokvels not be transformed into something similar, where members of stokvels who contribute monthly are then able to access microloans to start small businesses? This, we believe, should be investigated by the existing microfinance institutions.
As far as co-operatives are further concerned, as other speakers have pointed out, South Africa has a rich history. As the ACDP, we believe that we should build on this to the betterment of all in society.
To conclude, the ACDP supports expanding the opportunities for sustainable livelihoods through increasing support for co-operatives and micro enterprises. We believe that microfinances can play a crucial and important role in this regard. I would like to thank the hon Mr Mabasa for the topic for debate. I thank you. [Applause.]
Hon Chairperson, members of the executive and hon members, for the most part, the rural and peri-urban population constitutes a large part of the informal economy. As such, they are generally on the lower receiving end of social, economic and political development. This is where co-operatives fit in as they have the potential to significantly aid these communities in finding solutions, mediating poverty, and making use of their own available resources, strengths, skills, and knowledge. They have the potential to empower people to improve their quality of life, and enhance their economic opportunities through self-help.
Rural community development ought to be tailored so as to maintain the unique linkages with and values in the community. Therefore, co-operatives are an ideal empowerment tool for the poor, simply for their democratic nature, amongst other things. However, they are not a new concept, which is why we need to interrogate their apparent failure, thus far, to create employment, generate income and eradicate poverty.
In the South African context, the history of co-operatives dates as far back as 1892, but their effects are almost nonexistent. Amongst other things, co-operatives have often failed because of problems with holding management accountable to members. This is because of a lack of management expertise and knowledge, and to some extent, lack of capital resources.
Elsewhere, there have been records of successful co-operatives continuing to have a lasting impact and becoming sustainable. I suppose this is partly the reason we have not given up on the idea of co-operatives. We need to study the success of food-processing co-operatives in Argentina, Brazil and India. As we do that, we must also know that government policies are critical, as they can either enhance or constrain co-operative development.
Co-operatives, for instance in the United States, play an increasing role in influencing agricultural policies. There are many issues to be interrogated if we are to use co-operatives to grow sustainable businesses. There is a big role to be played by government in ensuring the success of co-operatives without being paternalistic in approach. If there is consensus that co-operatives are or have the potential of accelerating sustainability of livelihoods, especially for rural communities, then government must invest in infrastructural facilities like regular and stable electricity, accessible roads, water, and so forth.
The UCDP feels that the co-operatives are the only way to go in order to enhance the quality of lives of our people. I thank you.
Chairperson, I want to start by commending the hon Mabasa for calling this debate. I think he demonstrated, even here at the podium, his passion for this subject, and I think his passion is well-directed.
A number of members who participated in the debate have already indicated that the essential defining characteristic of a co-operative is not the size of the enterprise; it can be big or small in some cases or places. For example, the Mondragn in Spain and the largest bank in Cyprus are co- operatives. There are some sizeable co-operatives even here on the African continent. For example, operating in the agro-processing sector is Kenya, as has already been mentioned.
The essential defining feature of co-operatives is that they are collective enterprises based on the principles of economic solidarity. But because they are that, they are also a very important tool for bringing people who have some entrepreneurial capacity, but have very few resources and very little to bring to an individual enterprise. It can bring them into the productive economy. That's why I think co-operatives are so important, because people who are able to pool the few resources that they have often get a bigger bang for their buck.
Historically, co-operatives have also been in a number of cases, including, for example, Kenya, a way in which people who are operating in particular industries or sectors of agriculture can begin to rise up the value chain by also becoming involved in organisations of agro-processesing linked to agriculture. That's why co-operatives are particularly important for us.
In fact, hon Swart, we have a number of tools built into the small enterprise finance agency, drawing on the SA Apex Fund, which was amalgamated into it. This provides windows for micro loans for small projects, and I think it was built on the philosophy and understanding of Professor Muhammad Yunus and the Graneem Bank. I think that we give particular focus and attention to co-operatives for the reasons that I have been mentioning.
Now, I don't know which planet hon Ngonyama inhabits, for two reasons. He gave a picture that the co-operative programme was particularly vibrant under the previous administration; the administration that has fallen off. The figures just don't bear this out. We have a co-operative incentive scheme which is operating under our department. In fact, between the financial years 2011-12 and 2012-13, we have doubled the impact of that. We spent R35,8 million to support 144 projects in 2011-12 and we increased that to R78 million to support 287 projects in 2012-13.
So, we have been steadily increasing the support the central government, the Department of Trade and Industry, has been offering to co-operatives. That has been matched by programmes in a number of provinces, particularly in KwaZulu-Natal, this time under the ANC provincial administration.
That's what has been happening in the country. But I think we've come to the conclusion that that is not enough. We actually need to find a platform to increase the presence and role of co-operatives in our country. It is for that reason that we introduced the Co-operatives Amendment Bill in the National Assembly in November last year.
With the creation of co-operatives, specific institutions, such as the co- operatives development agency, will be an agency that focuses on co- operatives, will not treat them as just a subset or small business. We have also put in place in that Bill that there will be a co-operative tribunal to deal with disputes that take place within and between co-operatives and find solutions to disputes which have very often in all kinds of places been the death knell of co-operatives.
We then put in place, together with the Department of Higher Education and Training, a co-operatives academy to train people in how to operate a co- operative. That Bill went through the National Assembly in November last year. It has been agreed to by the select committee in the NCOP. I have been informed that it would appear before the plenary of the NCOP in due course. We hope that that is not too long delayed. Then we can move ahead, once the Bill has been signed into law, with the establishment of those agencies, which will provide us with a sustainable platform to increase our support as government for co-operatives.
We are also interested in exploring the possibility that we can change local procurement systems so that we don't have to go through the normal formal tender processes, but build direct relationships, as was mentioned by some of the speakers; for example, the provision of school meals by local co-operatives. We are looking at those kinds of opportunities for co- operatives. In general terms we are looking at significantly and substantially increasing support to co-operatives.
This debate is not just about co-operatives. So let me just say as well that we have been steadily rolling out the nonfinancial support programme, which the Small Enterprise Development Agency, Seda, operates to support and achieve viable enterprise development across the country.
This morning, I was at the launch of the Seda Atlantis Renewable Energy Business Incubator, called Sarebi, out in Atlantis. Then we went to cut the ribbon at the Enterprise Development Centre in Khayelitsha. These are examples where Seda has been involved in very specific programmes in this province. The Seda incubator is all about rolling out incubators so that we can train people to become productive entrepreneurs in the real economy. You don't just become a business person in renewable energy merely by wishing it. You actually have to learn something about it; you have to start to develop a business model; and you have to get training and mentoring. The incubator is to provide precisely that kind of support. We have been focusing on that because we think that incubator programmes are programmes which are some of the most productive ways that we can support small businesses.
We have 32 incubators that have been rolled out by Seda to support programmes. Another 10 will be added this year, bringing the total to 42. We are also seeking partnership with and the support of business entities. We are using the facilities provided under the incubator support programme, where we offer a fifty-fifty grant with a maximum of R10 million over three years to support incubators which are operated by private players.
We are tweaking the black economic empowerment scorecards. Therefore we are saying that people must now start to score points in the area of supplier development so that we can build symbiotic relationships between big and small business suppliers and create many more opportunities, not just through the procurement system in government, but also in new relationships between big and small businesses. These are things we are moving towards achieving.
In fact, in the enterprise development centres, we have spent R10 million of our own budget to take up a programme which used to exist here in the Western Cape called the Red Door. It was started by the previous administration, but this administration has chosen not to go ahead with it. We then picked up the slack to make sure that small business people in this province can also have access to those services. This year, as the national Department of Trade and Industry, we will spend R13 million on supporting those incubators in this particular province of the Western Cape.
I just want to say just one more thing. I nearly fell off my chair when I heard the hon Smuts Ngonyama telling us to throw stones at BEE. He was saying that BEE had interfered with relations between big and small co- operatives. I think, honestly, some members ought to be a little modest when they throw stones like these because when he was talking about BEE there was a massive "elephant consortium" sitting in the room. [Laughter.]
I think with those remarks, let me then once again thank the hon Mabasa for launching this debate. This is an important subject and something that we, in the Department of Trade and Industry, remain seized with. Thank you.
Chairperson and hon members ...
... ha mi khensa Tatana Mabasa, hosi ya mina. [We thank you, hon Mabasa, my chief.]
Some years ago, as a student and a keen reader, I used to read books from the African writers' series. Some of those books were written by Kenyan writers. They told stories of Kenyan towns and general unemployment in those towns. They told of notices put on the doors of almost all shops and factories reading: "Hakuna kazi" [There is no work.]
Our country has joined that trend. Notices of "No hawkers" and "Geen smouse" [No hawkers] are disappearing and are being replaced by "No jobs", "Geen werk nie" [No jobs] and "Ga go na mo?omo" [No jobs]. That is why Azapo supports the idea of expanding opportunities for sustainable livelihoods through support for co-operatives and microenterprises. People in communities are organising themselves into co-operatives because they know that jobs are scarce. What they need is information on how to go about it.
There is a need to remove a little bit of red tape in registering and accessing funds by co-operatives. We also need to look at how we can guide these communities because there are also stringent requirements, for example, where they have to develop business plans. Some of them cannot read and write and it presents a big challenge. Of course, there is a need for protection by the state of these co-operatives.
As I said, our people need information. I would like to record my appreciation for the staff of the Department Of Agriculture, Forestry and Fisheries in the Lepelle-Nkumpi Municipality for their nonpartisan support and approach to development. They continued to support Members of Parliament, MPs, without regard to which political parties they belonged to.
With proper encouragement, information and support, our communities can run self-reliant programmes and be able to feed themselves, their families and, indeed, the country. Maybe we would even be spared the embarrassment of eating imported donkey meat and some other animals. Our people are not lazy. They just need opportunities and support. Thank you.
Chairperson, the National Development Plan correctly identifies entrepreneurships and the success of small business as the one all-important factor in whether we can create jobs and beat unemployment in South Africa. This view is reflected in the Budget Review document released last week, and it is a view that the DA endorses.
Small businesses are the engine of growth and job creation in any economy. In China and India small businesses account for 90% of employment. Already more than 65% of South Africans who are employed work in small, medium and micro enterprises. It could and should be so much more. As Clem Sunter said:
If we want to create five million new jobs, we need one million new small businesses.
To achieve that, we need a government with a single-minded focus on making it easier, more attractive and less risky to do business in South Africa, a government that does not hamper innovation and gives small businesses every chance of success.
Sadly, the fact is that small businesses that do succeed in South Africa do so despite this government, not because of it. Instead of harnessing the potential of our citizens to start their own businesses, this government strangles people's entrepreneurial spirit by never-ending red tape and bureaucracy.
The DA wants to make it easy for people to start their own businesses and to create jobs for others. Of course, we recognise that there are some fundamental structural changes that will take time to properly consider and consult with labour about and then implement. The Budget Review document, the National Development Plan and the DA's plan for growth and jobs - which all of the Ministers should read - outline some of the labour market reforms, tax policy changes and comprehensive incentive programmes that are necessary.
However, in the meantime there is a lot that the government can do right now to unlock the entrepreneurial spirit in South Africa and get small businesses growing. We should start with the low-hanging fruit. Let's look at the facts. South Africa ranks 44th in the world for ease of starting a new business. It takes 19 days and 5 procedures to start a business in South Africa. In New Zealand, for example, it takes one procedure and less than one day. It's not good, Minister Davies, to have a one-stop shop when it still takes 19 days and 5 procedures even at that one-stop shop.
In this regard there is much that we can do now. Firstly, we can reduce the time, bureaucratic complexity and red tape involved in starting a new business by establishing proper one-stop shops where entrepreneurs can register all of their documentation with a single online form and with a single fee.
The DA-led Western Cape government understands this. That is why our administration is tackling this head-on through its red tape-to-red carpet initiative, which identifies and removes unnecessary red tape starting and running businesses, and streamlines government processes. [Applause.]
Secondly, and this is crucial, Chairperson, government departments must pay their bills on time. For small businesses cash flow is paramount. For a small business to have to wait months and months for clients to pay for goods or services that have already been delivered is a death sentence for that small business. Government spends billions of rands with hundreds of thousands of small businesses in every corner of South Africa. If we could just get this one simple intervention right, to pay our bills on time so that entrepreneurs could rely on the government as a customer, small business and entrepreneurship would be markedly less risky and more attractive in South Africa.
Yet, out of all the departments here there are not more than two or three that pay their bills within the 30-day target. Most take more than 90 days - three months - or more. This is an intervention that the government can make right now. There should be no delay. It is something that has been announced and committed to by the President and by the Minister of the Department of Trade and Industry many, many times and over and over again.
Yet, I wonder how many times the President or Minister Davies has called up his fellow Ministers on their failure simply to pay their bills on time. I wonder how many Ministers have this explicitly included in their performance contracts. If they all have this in their performance contracts, I wonder how many of them are enforced. I think not many. Perhaps, instead of the ANC speakers and the Minister speaking, we should have heard the Minister of the Department of Agriculture, Forestry and Fisheries, who takes on average 109 days to pay her bills, to come and explain to this House why she is killing small businesses in South Africa.
Perhaps we should have heard the Minister of Basic Education, who takes on average over 100 calendar days to pay her bills. She should explain why she is killing small businesses in South Africa.
One cannot feel confident that this government will effect the fundamental changes this economy needs if it trips up over basics like these. There is one government that is making it easier to start and run a business and is paying its bills on time, which is the Western Cape provincial government, led by the DA. It is the only government in the country, in addition to the Department of Trade and Industry, which pays all of its bills in less than 30 days. [Applause.] We may not be able to effect fundamental, structural reform yet, but we are doing what we can where we are to help small businesses succeed and create jobs for all South Africans. Thank you. [Applause.]
Manana Mutshamaxitulu, swirho swa Huvo, ha khensa ku hoxetela ka n'wina maribye yo simeka mabindzu ya hlanganelo. [Chairperson, members of this House, we thank you for putting up cornerstones to establish co- operatives.]
I want to address hon Alberts. Actually, I'm very fortunate and happy to have met you. The way we relate, I think tells you that black people do not hate white people. The only things that they hate are the wrong things that were done and the wrong things that will be done today. There is a chance here, especially from the white community. With your experience of co-operatives and of farming, this is an opportunity to stretch out your hand, and hold that of the emerging farmer and walk the journey with him or her. [Applause.] This is the opportunity to help build co-operatives. You can pride yourselves and say, we did not enrich one person, but we assisted many black people to go up the ladder.
From my left side, I wish you can take this seriously. UBab' uMfundisi [Reverend], who knows, maybe this is the character of ubufundisi [priesthood]. You may find that your people are able to go into that passage as we all struggle to go to heaven. You do have that chance. Form co-operatives and help black people, and that door will be opened.
I want to thank all the speakers that spoke. Hon Mfundisi [Reverend], when you spoke, I nearly said that you should come and sit on this side. You must explore if you cannot come to this side of the ANC. Your language sounds as if you are not far from coming to the ANC.
Tatana Dikobo, hi khensile. Hi khensa marito yo aka. [Thank you, Mr Dikobo. We thank you for the constructive words.]
The speaker from the ACDP repeated what I implied just now, that the rich history of South Africa in co-operatives and small, medium and micro entreprises, SMMEs, must not be lost. This is an opportunity. I repeat to all, especially on the left, have your chance and save South Africa. This chance doesn't come many times. Please, grab it and help co-operatives. [Applause.]
Debate concluded.