‘Speed up self-help strategies’

2009-02-24 00:00

THE government needs to encourage people to support themselves and not to survive on hand-outs, the MEC for Finance and Economic Development, Dr Zweli Mkhize, told reporters during the first International Co-operative Conference in Durban yesterday.

He said that accelerating the growth of co-operatives in South Africa will encourage people to fend for themselves.

The number of people on welfare in KwaZulu-Natal has grown from three million “when we started this government” to 12,5 million, Mkhize said. “Unless we offload people from the social welfare system, it will become unaffordable.”

He said creating and implementing strategies to grow co-operatives depends on a complete change of mindset and the avoidance of the “quick-buck syndrome” and fraud.

Agriculture and Land Affairs Minister Lulu Xingwana said it is essential to inculcate a culture of saving. By creating co-operatives, communities can fund their initiatives at favourable rates and not be vulnerable to bank policies, she said.

SA Communist Party general secretary Blade Nzimande told the conference that “the financial co-operative movement will address some of the structural imbalances but not all”.

The issues of where banks invest, to whom they grant loans and the “freezing up of the credit market notwithstanding a small drop in interest rates” mean that the poorest people will be hardest hit by the financial crisis, he said.

“As our primary, secondary and tertiary co-operatives strengthen, so the mainstream banks will become more and more irrelevant to us,” Nzimande said.

Xingwana pointed out that some co-operatives have become large corporations, such as KWV, which brought together farmers and wine makers in the Western Cape.

KZN premier Sbu Ndebele said that more than 63% of Kenyans depend on co-operative-related activities. With more than seven million people in 12 000 registered co-operatives, he said, the co-operative movement “contributes about 45% of GDP and 31% of national savings”.

Kenya and KZN will trade expertise and training during 2009, Ndebele added.

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