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4 June 2008

Programme director
Members of Executive Committee
Mayors and councillors
Government officials
Business representatives
Distinguished guests
Ladies and gentlemen

I am sincerely humbled and honoured to be amongst all of you today, who have gathered here, but most of all, I am pleased to celebrate this day with you as we give birth to one of our truly remarkable landmark, which will change the course of our history.

One of our major challenges is to promote economic growth and creating jobs for our people, while at the same time providing for social development as a means to addressing the needs of the poor.

We now have an enormous responsibility to our people and future generations. That responsibility demands that we place ourselves on a sustainable growth path where every one of us can realise our hopes, dreams and aspirations. We focus on a balanced approach of empowerment. Not mere ownership targets, but empowerment that goes deep into our villages and towns and pulls people into the economy.

There is an Afrikaans word, for which there is no direct English translation that best captures the spirit of this dimension of the solution to our unemployment problem. The word is "toenadering". There is a need for "toenadering" in fighting this fight. It is our shared responsibility to our mothers and fathers, our sisters and brothers who are unemployment.

We must understand these issues because they are critical to our success in ensuring the reconstruction and development of our economy so that it meets the needs of our people at the same time as it gets further integrated into the world the world economy.

Ladies and gentlemen, we must make small business development a bigger part of our policy so as to tackle unemployment and poverty. In supporting small business, big business and community organisations have a crucial role to play. We in the Northern Cape must take these lessons and replicate them in our own local areas.

Democracy has created immense opportunities and wealth in our country and yet, those who do not have skills to participate are often left out of the economic benefits. It is therefore a priority that we address the skills development in our country, and increase the participation of those in the second economy.
Ladies and gentlemen, we have to do this as our country will never be able to sustain the growth that we desire without having greater numbers of people participating in our economy.

The South African government has prioritised the development of the small medium and micro enterprise (SMME) sector in the country. Globally, entrepreneurship is considered as the engine of economic development. The SMME sector has the potential to address socio-economic challenges facing both developing and developed countries.

Therefore ladies and gentlemen, as government we have reached an important milestone in locating SMMEs enterprise development in its rightful place in the economy. We have seen how important co-operatives are in many economies and the contribution they make to society. Co-operatives clearly offer a viable form of enterprise that comes exclusively out of socialist economies. The establishment of co-operatives is the more democratic approach to owning and managing the enterprise, the sharing of profits, the sharing of responsibility and the sharing of risk.

For many years, many African intellectuals and leaders have put forward the notion that African society is ideally suited to working in co-operatives, therefore in the context of the social structure of our own communities, we have no doubt that co-operatives could be a very successful form of enterprise in our country.

While formal co-operatives have predominantly been in the agricultural sector, we all know of people who are involved in 'stokvels', which in their own way are co-operatives.

Our challenge is to grow this concept in our communities, integrate it into existing mainstream economic activities, and use co-operatives as a means to tackle some of the challenges that are facing our country.

Our people in rural areas are aware of how people are able to mobilise resources, which are put into productive activities as well as community activities such as burial societies. What is important is how we can use these resources to develop our communities, to grow these initiatives ad plug them into the mainstream economic life of our province.

Ladies and gentlemen, the development of co-operatives has consequently become a critical component of our Provincial Growth and Development Strategy, to grow our economy and create broader participation by our people, especially women, the disabled and the youth.

Unfortunately the restructuring of our economy in the past decade has pushed a number of people, particularly the unemployed and unskilled workers, into what we now call the second economy.

The second economy also includes many people who have never had access to the formal first economy and survive though a number of informal income generating activities.

It is incumbent upon all of us in our society to ensure that as our economy grows, and as we develop our province, we do not leave behind those who are in the second economy, nor can we allow the increasing wealth in our society to only benefit a few. These issues always come through very strongly during our presidential imbizo programmes. Our policies are pro-poor and should be adhered to.

Government therefore envisages an enhanced role for co-operatives in addressing the issue of support to the second economy as well as increasing the participation of poor people in our economy. The important role of co-operatives and the potential they have in contributing to our economy cannot be over-emphasised. That is why I am pleased to be a part of this launch.

As the provincial government, we have a commitment to support SMMEs as they have the potential to create and develop income generating activities and sustainable, decent employment. Through small businesses, we will be able to develop human resource capacities, increase savings and investments and improve the social and economic well being of our people.

It is our aim to ensure that through SMMEs we establish and expand a viable and dynamic distinctive sector of the economy that responds to the social and economic conditions of our people.

Much needed support may be sourced from the Department of Trade and Industry (the dti), which is promoting the development of a greater number of economic enterprises.

What is of critical importance is that because of the overlapping needs of small businesses and co-operatives, we are able to use some of the SMME support mechanisms to provide assistance to co-operatives. We do however; acknowledge that co-operatives will need additional forms of support. Importantly, co-operatives were, if structured appropriately, will also be able to benefit from our Broad Based Black Economic Empowerment (BBBEE) legislation and processes, and they will therefore be able to benefit from the enterprise development activities that come out of the implementation of the sector charters.
There are also overlaps in the area of access to finance. It is therefore necessary for us to ensure that there is alignment between SMME support institutions and co-operative development organisations so that we are able to optimise our impact and that both receive the necessary support required in order to flourish.

I therefore wish to encourage our people who wish to venture into co-operatives to apply for the existing incentives and support instruments that the dti has available for businesses, such as the Small Medium Enterprise Development Programme or the Black Business Supplier Development Programme.

Our approach is to make the business and social environment more conducive for the development of co-operatives and other enterprises in the second economy.
The key defining feature of worker co-operatives is that worker-embers in the co-operative own and control it. In this way, worker co-operatives potentially provide a radical alternative to the employment relationship found in conventional enterprises, and many of the difficulties they face relate precisely to this attempt to redraw the relationship between 'owners' and 'producers' when co-operative members combine their roles.

To the members of Karoo Delights Factory, I wish to congratulate you for the work you have done so far and wish you well in your future endeavours. I also wish to extend a word of caution to the members by saying, that assuming a level of business viability is not an easy task, your success and failure is typically determined by your ability to institutionalise internally accepted ways of managing the tensions that are at the heart of running a business.

May you ground your factory on sound business principles and values of self-help, self-responsibility, equality, equity and solidarity. As a collective, you should be bound by values of honesty, openness and caring for others.

In conclusion, programme director, it is my belief that self-reliant and self sustaining business can play a major role in the economic and social and cultural development of our country. Our support to this alternative form of enterprises will also be an important way to facilitate the integration of the second economy into the first economy. This integration is a crucial aspect of the government's vision 2014, which is to create a single economy in our country.

I hope and wish that each and every individual attending this launch this morning will join hands with us in contributing towards growing this factory so that it is able to grow from strength to strength. Your success will give hope to many other unskilled and unemployed people in our communities.

I thank you
Ndiyabulela
Baie dankie
Ke a leboga.

Issued by: Office of the Premier, Northern Cape Provincial Government
4 June 2008