Improving the Contribution of Cooperatives as Vehicles for Local Economic Development in South Africa

by Prudence Khumalo

Abstract

There has been a growing realization over the years of the importance of cooperatives as vital instruments for socio-economic development across the globe. The article seeks to argue that the success of cooperatives in contributing to local economic development (LED) in South Africa is undermined by the lack of an active cooperative movement and faulty state support for cooperatives. Through a literature review, the LED contribution of cooperatives by way of training, provision of services, social cohesion, and infrastructure development is analyzed. Subsequently, there is a discussion of the challenges faced by cooperatives in the country such as the high attrition rate, leadership and management challenges, interference by government officials, and a lack of stability. The article endeavors to bring to light some of the possible solutions to the current challenges, among which is the need for establishing training institutions on cooperatives, the creation of an enabling environment for a strong cooperative movement to thrive, and provision of adequate funding. The article further underlines the need for a research and evaluation mechanism that will monitor the performance of cooperatives and provide necessary support.

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Prudence Khumalo is a Senior Lecturer in the Department of Public Administration at the University of South Africa with a research focus on public policy and development. He has published on governance, leadership, poverty and local economic development.