Cooperatives as a driver of local economic emancipation in South Africa

A Cooperative is a business model where people unite with a common socio economic interest. The business is democratically owned and controlled and each member has an equal proxy. Every member/worker shares the burden of success or failure therefore the business is generally motivated and driven, hence cooperative businesses have a significantly lower failure rates of around 10% after the first year ,whilst traditional businesses have a failure rate of around 60-80% after the first year.

cooperativesCooperatives are relevant in South African due to the lack of economic ownership by the majority of its people in local communities as well as a dire need to activate a stagnant economy influenced by various global and local challenges that are generally historical.

Cooperatives present a unique economic opportunity therefore the development and professionalism of co-ops should be an apex priority. Cooperatives turn unlikely players or rather individuals isolated in the economy into active participants in the economy.

crowd-2045498_960_720Cooperatives do not only have a great potential for turning profits but are also great in the sense that its social impact in communities is profound. Communities are stabilized. They are able to take responsibility for their own development and ownership of its own economy. The communities benefit due to the local alternatives created as opposed to importing goods or services that could have been locally produced. This then develops the local economy immensely. One such example of this radical impact is sighted in an article in the Yes! Magazine 2013, “for every $1000 spent at a goods co-op $1606 goes to the local economy and for every $1 million in sales 9.3 jobs are created”.

The cooperative business model greatly challenges conventional business models and brings forth a united and democratic business alternative to confront the market, where human capital is prioritised as the most important investment. Cooperatives in essence is the responsible practice of capitalism.

Cooperatives is a critical weapon in the fight against South Africa’s socio economic challenges and a great stimulus of local economic growth and development. This is seen in countries like Uruguay and Cuba respectively where some similar historical challenges are prevalent. Cooperatives have shown that it has all the tools to become global and multinational brands as seen in cooperatives like FC Barcelona, Clover, the Agricole group, Sanlam and Eureko to name a few.

Cooperatives indeed present vast opportunities for South Africans to unite their communities in establishing cooperatives to render services and produce goods they value thus creating a unique and organized local economy where the community benefits from the rewards.

The transformation of the South African economy can never be national before its local.

-Rowan Sampson


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