Economic Development Minister Ebrahim Patel signs a Memorandum of Understanding with the government of Flanders and the International Labour Organisation to help boost job creation in the social economy in South Africa. Picture: Supplied

Cape Town – Economic Development Minister Ebrahim Patel on Tuesday signed a Memorandum of Understanding with the government of Flanders and the International Labour Organisation (ILO) to help boost job creation in the social economy in South Africa.

The Government of Flanders committed €1324 367 (around R19 million) towards the initiative, which is aimed at creating and supporting decent jobs in a sustainable and inclusive social economy.

South Africa's Economic Development Department's contribution is R4.8 million, bringing the total project cost to around R23.7 million. The International Labour Organisation will give technical support to the EDD in the implementation of this project, it was announced on Tuesday.

Flanders is the Dutch-speaking northern portion of Belgium.

“The social economy in many parts of the world creates and sustains millions of jobs and helps to offer economic services to marginalised communities and regions. It can bring energy and enterprise to our efforts in South Africa to tackle unemployment and inequality challenge,” Patel said at the signing ceremony on Tuesday.

“We have some successful models of social enterprises locally and we are ready to scale them up. These include co-operatives, union investment vehicles, community work programmes, not-for-profit companies and stokvels. The challenge as we scale these efforts up is to do so in a sustainable manner and support efficient enterprises that generate surpluses and reinvest these in job creation and social upliftment. This partnership we entered into today will give us the resources and expertise to bring more focus to our efforts,” Patel said.

“The government of Flanders recognises the role of the social economy in enhancing the socio-economic growth and social inclusion that South Africa needs, in order to tackle the challenges of high unemployment, poverty and inequality," said Dr Geraldine Reymenants, general representative-counsellor of the government of Flanders.

"We have been supporting innovative projects in social entrepreneurship and the social economy since 2010, with a multi-actor as well as a multi-level approach. These projects have contributed significantly to understanding different aspects of the social economy, while at the same time highlighting the need for a consistent and coherent national policy to further enable and support its growth and development,” Reymenants said.

ILO director Joni Toko Musabayana said the partnership was a culmination of a long period of engagement between the EDD, Flanders and the ILO .

"This project also builds on the pillars of the decent work agenda namely, promotion of fundamental principles and rights at work, employment promotion, social protection coverage and tripartite social dialogue,” added Musabayana.

According to the MOU, the project will be implemented over the next three financial years from April 1. The focus will be on providing support to, and developing policy for the social economy; with three key result areas:

1. Providing strategic support for unblocking and implementing practical interventions in the social economy sector;

2. Establishing well-defined institutional mechanisms to drive and guide work in the social economy; and

3. Developing an enabling policy framework to guide actions, investments and job creation in the social economy sector

Work will focus on the economic activities of enterprises and organisations that manage their operations and direct their surpluses in pursuit of social, environmental and community goals. These include co-operatives, mutual societies, voluntary and community organisations, community and union investment vehicles, as well as community trusts.