Department of Small Business Development BRIEFING TO THE PORTFOLIO COMMITTEE ON SMALL BUSINESS DEVELOPMENT Briefing on the progress on the implementation plan on 12 Abalimi cooperatives 31 May 2017

Presentation outline Purpose Districts location of 12 Abalimi Cooperatives Remedial Action Plan: DSBD Commitment Progress and Achievements Way forward 1 2 3 4 5

Purpose To account to the Portfolio Committee on the progress made in relation to the Remedial Action Plan formulated and presented by DSBD to the Portfolio Committee on the 07th of December 2016. To provide the second progress report proceeding from the first progress report provided to the Committee on the 8 of March 2017 in relation to the Aligning the Support Services to the model of developing 12 Abalimi Agricultural Cooperatives pilot in KZN. During November 2015 DSBD approved funding to support the 12 Abalimi Cooperatives located in KZN across 4 district municipalities and 1 metro.

Purpose, cont. In 30 November 2016, DSBD provided progress report on the 12 Abalimi Agricultural Cooperatives project to the Portfolio Committee on Small Business Development. The report acknowledge that there were some shortcoming on the project requiring sorting out. During the same period, DSBD presented the Remedial Action to the Portfolio Committee on Small Business Development, which was endorsed by the Portfolio Committee on Small Business Development.

District Location of 12 Abalimi Cooperatives in KZN Farmline Food Coop House of Glory Coop Yahweh Shamaah Coop Insabalele Primary Coop Sinothando primary Coops Green Farmer Primary Coop Intombikabhayi Primary Coops Kwa - Xolo Fresh Produce Coop Eshilo Women Primary Coop Ulimo 12 Primary Cooperative Ncebazakhe Women Coop Selulele Primary Coop

Remedial Action plan – dsbd commitments No Tasks Implementation date Status of the task 1. Appoint a Project Manager for the Abalimi Agricultural Cooperatives project to manage and ensure coordination of the implementation of the project 31 December 2016 Project manager appointed during January 2017 2. Write letters to relevant Municipalities (MMs) to introduce Abalimi Agricultural Cooperatives 10 Feb 2017 Letters written to all districts introducing Abalimi during February 2017 3. Develop Implementation Plan for each of the Steering Committee 29 April 2017 Each District Steering Committee has formulated an action plan 4. Ensure that Abalimi are integrated into the IDP of municipalities to invoke support from other Stakeholders 31 March 2017 All districts agreed. Confirmation on integrating Abalimi to the IDP’s have been received from ILembe and Ugu Districts 5 Harmonize the working relationship between Kohwa and DSBD on the rollout of Abalimi project Letter to deviate from CIS guideline will make it possible to harmonize relations btw. Kohwa and DSBD for the provision of technical support

Assessment of the needs of the cooperatives have been undertaken Remedial Action plan – dsbd commitments, cont. No Tasks Implementation date Status of the task 6. Establishment of Abalimi Steering Committee in each of the Municipalities 31 Jan 2017 Steering Committee established in all District Municipalities during consultation meetings 7. Seek approval from National Treasury to shift CIS funds towards investment in advancing a model which will promote the sustainability of funded cooperatives 31 March 2017 Deviation Letter requesting Minister’s consideration is with the Minister. Clustering Coops – R11m Individual Coop – R 500k Technical assistance – R250k coupled with SEDA funding 8. Determine the exact business needs by undertaking due diligence to inform funding Assessment of the needs of the cooperatives have been undertaken 9. Unlock and provide working capital informed by the due diligence Once the CIS deviation has been approved by the Minister it will be possible to fund the working capital for cooperatives

Concept document for Abalimi finalised and approved Remedial Action plan – dsbd commitments, cont. No. Tasks Implementation date Status of the Task 10. Sign Transversal Agreements coupled with Implementation Plans with Municipalities 31 March 2017 3 Municipalities still consulting on transversal agreements. Two agreements received from Ugu & ILembe Districts for DSBD signature. 11. Develop concept document to be approved & supported by the relevant National & Provincial Departments Concept document for Abalimi finalised and approved 12. SEDA has received official request from DSBD to provide Management and technical training and access to market to Abalimi 30 April 2017 SEDA KZN committed to kick start training on management and provide agricultural technical support during the first week of June 2017 13. Work with municipality to popularize the project by launching the project during harvest period 31 August 2017 Still pending

Progress and achievements All districts have agreed to integrate Abalimi to the IDPs; Two districts (i.e. ILembe and Ugu ) have confirmed integrating Abalimi to their IDPs. Remaining three still consulting with council chamber; All five municipalities have agreed to sign transversal agreements; Only two (i.e. ILembe and Ugu ) have confirmed signing the transversal agreements which is awaiting signature by DSBD; Letter requesting deviation from CIS guideline is before the Minister awaiting approval: Deviation entail – Cluster coops: R11m. Individual Coop: R500k Technical Support: R250K coupled with SEDA funding support SEDA Harry Gwala reported to have purchased work suites, provided bill board and printed business cards for cooperatives in the district.

Progress and achievements. Cont.… Seda has been officially requested by DSBD to provide training (cooperative governance and management) and technical support. A letter to this effect was sent to SEDA on 31st of March 2017. SEDA has undertaken to kick start training on cooperative governance on the 1st week of June 2017. The training will be delivered by the Coastal College through a partnership with the provincial Department of Economic Development Seda had designed a new training manual focusing on Finance for Cooperatives, which would be rolled out to all Abalimi cooperatives To address Seda had recruited four Agriculturalists to provide technical training to the cooperatives in the KZN province SEDA has just completed its own internal assessment of Abalimi and is ready to provide the requisite intervention;

Way Forward Once deviation letter has been approved by the Minister of Small Business Development the following will be immediately executed: Funding the outstanding needs of the cooperatives using a secondary cooperative structure; Technical support will be provided through SEDA and Kohwa; DSBD, SEDA in partnership with Kohwa will secure uptake agreements with retail stores for all cooperatives; Remaining transversal agreements will be signed with all districts; Ensure closer participation of district municipalities in the rollout of support to the cooperatives. As such the DG visited on 26 May and a project plan for the cooperation agreement has been agreed to. Seda to complete provision of training and technical support Launch the project during the harvest period

“ THANK YOU.