Cooperatives in Vogue: A Case Study of Cooperatives in South Africa
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The 2005 Cooperative Act and the subsequent amendments and other related policies and support have invigorated the cooperative sector in South Africa. In fact, if one looks at the number of cooperatives registered in South Africa, it is quite impressive. The legislative environment and the financial support that the country provides have resulted in increased number of newly registered cooperatives. There were about 4000 cooperatives in 2005 compared to the 50,000 currently registered cooperatives in South Africa. Compared to population growth and the rate of urbanisation in South Africa, this number is very high. Despite the impressive growth in the number of newly registered cooperatives, the sustainability of many of the registered cooperatives is doubtful. This chapter provides an overview of the history of the country’s cooperative sector with the goal of identifying factors that contribute to the high failure rates of cooperatives. Based on the available literature and statistics, the chapter shows that financial incentives and the creation of government support institutions are not enough to foster sustainable and successful cooperatives.
KeywordsApartheid Cooperative Economic transformation Sustainability Cooperative incentive scheme
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