Flemish pact to boost SA's social economy
30 January 2017
Enterprises in the social economy sphere will benefit from an agreement inked by the South African Government and the Government of Flanders to stimulate growth in the sector.
Economic Development Minister Ebrahim Patel 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.
Photo: (l-r) Government of Flanders General Representative, Dr Geraldine Reymenants, Economic Development Minister Ebrahim Patel and ILO Director: Decent Work Team – Eastern and Southern Africa, Dr Joni Toko Musabayana
In South Africa, the social economy consists of institutions such as cooperatives, trade union investment tools, social enterprises, non-profit institutions for research and advocacy groups, among others.
“A partnership like this offers promise for young people in South Africa, for the rural excluded and for the urban poor, and that is why we wanted to embrace this opportunity of a partnership,” Minister Patel said on Monday in Pretoria.
He was speaking during the occasion of the signing of the MoU, which was attended by the Government of Flanders General Representative, Dr Geraldine Reymenants and ILO Director: Decent Work Team – Eastern and Southern Africa, Dr Joni Toko Musabayana.
As part of the agreement, the Government of Flanders has committed about R19 million, while the South African government will contribute about R5 million towards the initiative, which is aimed at creating and supporting decent jobs in a sustainable and inclusive social economy.
The ILO will give technical support to the Economic Development Department in the implementation of this project.
Minister Patel described the occasion of the signing of the MoU as positive, inspiring and something that can make a difference in the country.
He said MoU is a partnership that brings together four key ingredients, which include resources, technical expertise, information and knowledge as well as coordination.
“The social enterprises purpose is public - either job creation or providing services in a rural area where there is no market rationale for the provision of those services or through the promotion of women in the economy.
“That makes them unusually important for an economy and a society like South Africa,” Minister Patel said.
He said another advantage of the social economy is that it reinvests its surplus to communities, as it is not for the private pocket.
“That means that as those institutions grow, they need to be efficient, they’ve got to be able to survive in the economy, and as they make money, that money is used to expand the number of jobs or create opportunities for education for young people,” Minister Patel said.
Reymenants said the Government of Flanders has supported developmental projects in South Africa since 1994.
“The Government of Flanders recognises the role of the social economy in enhancing the socio-economic growth and social inclusion that South Africa needs to tackle the challenges of high unemployment, poverty and inequality.
“The social economy indeed contributes to an inclusive economy by delivering services to vulnerable communities, by addressing the issues of climate change, ecological sustainability and social justice and by using innovative business models to respond to local social problems, thereby creating decent jobs,” she said.
Musabayana said the signing of the MoU is a culmination of the work that has been done by the ILO in KwaZulu-Natal and the Free State.
He said the work that has been done has enabled the ILO to see the reality of social entrepreneurs, the challenges they face and how best to exploit opportunities.
“We realised that beyond training and facilitating access to finance, the issue of policy and establishing a coherent policy framework is the most important, hence this project.
“This project therefore signifies a bottom-up approach, where we go to the provinces and work with entrepreneurs on the ground in the social economy and then end up working on an enabling policy environment for it,” Musabayana said.