Through co-operatives, we have an opportunity to radically grow the economy in order to meet the needs of our people, says the writer. Picture: Leon Lestrade/ANA
It is common knowledge that the use of co-operatives as vehicles for socio-economic development is not new in South Africa or elsewhere in the world. As early as 1912, the Land and Agricultural Bank of South Africa offered loans to white agricultural co-operatives at preferential rates, and with less stringent conditions as compared to commercial banks.

This was direct support of private entities by the state which played a key role in the development of cooperatives. By 1930, there were 429 agricultural cooperatives in South Africa, which were supported by the state and benefiting white South Africans.

In his dissertation; Afrikaner Economic Empowerment (1890 - 1990) And Lessons for Black Economic Empowerment, University of Pretoria’s Mzamo Masito writes: “The Afrikaner volk from 1900’s (including last few years 1800’s) to 1990 implemented their own Afrikaner Economic empowerment programmes known as Afrikaner Nationalism, Broederbond or Volkskapitalisme”.

Masito further posits that the Afrikaners developed these programmes after suffering shortages of resources following their defeat by the British in the Anglo-Boer War (South African War). “The programmes were designed by Afrikaner intellectuals and executed by organizations such as Federale Volksbelegging, Reddingsdaadbeweging (RDB) and the National Party to ensure the survival of the volk and their economic emancipation”, Masito continues. The Co-operatives Societies Act of 1939, which allowed limited liability for co-operatives, led to the creation of even more co-operatives. Following the promulgation of this Act, co-operatives enjoyed better privileges, like exemption from income tax, as well as relatively lower rates of financing.

The agenda above, which was advanced by the apartheid regime, was a conscious effort to use co-operatives as a tool to fight poverty, to develop the economy as well as to create jobs, for the white minority. South Africa’s major wine brand, KWV, started as a co-operative. It received state support and incentives to be where it is today. Another example of an Apartheid-era co-operative is Volkskas, which was one of the three biggest monopolies in South Africa. In 1992, Volkskas merged with Allied and United Building Societies to become ABSA. ABSA, as we know it today, has deep traces of state support and privilege from the apartheid times.

We provided this background because we want to indicate that co-operatives, and the practice of state support for economic development is not a new practice.

The Free State Provincial Government fully supports co-operatives and will prioritise co-operatives in trying to enhance the mass character of radical economic transformation.

On August 26, the Free State province hosted the International Cooperatives Day Celebrations, where the president and several ministers participated. This event reminded us of the mandate our people gave us in 2009.

The ANC 2009 Election Manifesto states: “We have to ensure that we grow the economy to meet the needs of our people squarely. Lasting victory over poverty and hunger requires the creation of decent work opportunities and sustainable livelihoods."

It is our strong belief that, through co-operatives, we have an opportunity to radically grow the economy in order to meet the needs of our people, as instructed by the Manifesto. Now, more than ever before, we have a responsibility to radically transform our economy in order for it to benefit our people as a whole, the majority of whom are Africans and females. Through co-operatives, we can challenge the monopolies that continue to strangle our economy.

In this year of president Oliver Reginald Tambo, we have a revolutionary duty to transform the economy for our people.

* Magashule is the Free State’s ANC Provincial chairperson and premier.

** The views expressed here are not necessarily those of Independent Media.

The Sunday Independent