Encouraging Co-operatives to Combat Unemployment and Boost Economic Growth in South Africa

Strategic Insights -

Co-operatives are emerging as a vital strategy to tackle unemployment and foster inclusive economic growth in South Africa. The Department of Small Business Development has been providing support to co-operatives, with a focus on creating jobs and promoting community development. According to the Co-operatives Act 6 of 2013, a co-operative is an autonomous association of people united to meet their common economic and social or cultural needs. The act outlines four types of co-operatives: primary, secondary, tertiary, and national apex co-operatives. Primary co-operatives aim to provide employment or services to members, while secondary co-operatives are made up of operational primary co-operatives. Tertiary co-operatives engage with organs of state, private sector, and stakeholders on behalf of their members. The department has registered 191,520 co-operatives with the Companies and Intellectual Property Commission, with no national apex co-operatives.

Key Takeaways:

  • The Department of Small Business Development is providing funding to co-operatives, with a total of R140.5 million allocated to 148 co-operatives in the 2023/24 financial year.
  • Funding decreased to R46.1 million spread across 49 co-operatives in the 2024/25 financial year, with an additional R10.8 million provided to seven cooperative finance institutions.
  • The cooperative finance institutions created 1,350 jobs across five provinces (Eastern Cape, Gauteng, KwaZulu-Natal, Limpopo, and Western Cape) in the 2024/25 financial year.
  • The latest quarterly labour force survey by Stats SA revealed that the number of unemployed in South Africa grew by 237,000 to 8.2 million in the first quarter of 2025.
  • The government is encouraging South Africans to establish co-operatives in various business sectors to contribute to the fight against unemployment and deepen inclusive economic growth.
  • The Co-operatives Act 6 of 2013 defines a co-operative as an autonomous association of people united voluntarily to meet their common economic and social or cultural needs.
  • The department is offering funding to co-operatives under three categories: startup primary co-operatives (limited to R1.5 million per application), primary co-operatives (limited to R2.5 million per application), and secondary, tertiary, and national apex co-operatives (limited to R5 million per application).

Statistics:

  • 191,520 co-operatives are registered with the Companies and Intellectual Property Commission.
  • R140.5 million was allocated to 148 co-operatives in the 2023/24 financial year.
  • Funding decreased to R46.1 million spread across 49 co-operatives in the 2024/25 financial year.
  • R10.8 million was provided to seven cooperative finance institutions in the 2024/25 financial year.
  • 1,350 jobs were created across five provinces in the 2024/25 financial year.
  • The number of unemployed in South Africa grew by 237,000 to 8.2 million in the first quarter of 2025.

Sources:

  • Parliament of South Africa
  • Department of Small Business Development
  • Co-operatives Act 6 of 2013
  • Stats SA (latest quarterly labour force survey)