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Title: The impact of the local government support on the sustainability of co-operatives and its role on poverty alleviation in the eThekwini Municipal region
Authors: Ntambwe, Katambwe Leon 
Issue Date: Sep-2020
It has been accepted that sustainable co-operatives create job opportunities and have
become a source of income for many people worldwide. The concept and philosophy
of co-operatives is deeply embedded in the traditional culture of many human
societies, especially within African communities. There are many examples where
individual members of communities work together in improving their socio-economic
welfare and that of their communities.
In this context, the KwaZulu-Natal (KZN) Province has committed to promoting cooperatives through the establishment of a division that focuses on the establishment
and promotion of co-operatives. The Department of Economic Development Tourism
and Environmental Affairs (EDTEA) in KZN has put in place a Co-operative
Development Programme which started from February 2005; and since then, the
programme has attracted more than sixty thousand individuals, who constitutes
approximately six thousand co-operatives.
Since 2001 the eThekwini Municipality developed a co-operative programme aimed at
eradicating poverty by empowering people who were living below the poverty line to
step into the mainstream of the economy. As a result, ninety six co-operatives were
formed with an average of twenty members each, resulting in about 720 people being
employed, thus enabling them to look after their respective families.
However, although the preceding cases have been successful in terms of facilitating
the establishment of new co-operatives, there are some challenges that still need to
be addressed. Unfortunately, the government investment in co-operatives and the
substantial increase in the registration of co-operatives have not been accompanied
by a related increase in the contribution of co-operatives to poverty alleviation and
growth of the economy.
The rationale behind this research is to establish the impact of the local government
support on the sustainability of co-operatives and its role in poverty alleviation in the
eThekwini Municipality. The research aim is to understand the role of the local
government’s support on co-operatives’ sustainability and its impact on poverty alleviation in the eThekwini Municipality. Such an understanding will lead to the
development of an inclusive and sustainable approach/model for supporting cooperatives in the eThekwini Municipality that will take local co-operatives into a
sustainable growth path to alleviate poverty. In terms of the literature review, a
theoretical outlook was formulated around the study with three chapters detailing the
perspectives of co-operatives at the international, African, South African and
eThekwini Municipality levels were presented. The rationale was tested in the form of
questionnaires and interviews with key stakeholders involved in the support of cooperatives from the provincial to the municipal levels. A target sample was selected
with co-operatives supported by the local government. The case study approach was
utilised with the eThekwini Municipal Region having been selected as the study area,
as it is one of the many local municipalities which have programmes aimed at
supporting co-operatives in the country.
The major findings from the research may be gravitated towards the co-ordination of
support, monitoring of the outcome and the overall approach used during the support.
Co-operatives in the eThekwini Municipality have been provided with both financial
and non-financial support. However, the provision of support to co-operatives has
been undertaken without a clearly set up mechanism for a regular assessment and
review of their impact. The study also found that the financial support to co-operatives
has resulted in increased economic activities in the eThekwini Municipality, such as
an increase in business volume (production), employment opportunities, additional
gross value added (GVA), and the generation of personal income for co-operative
However, co-operatives are still facing a number of challenges after being assisted
and supported. Therefore, the government and other stakeholders will need to
continue with the provision of support services to make them sustainable.
This study recommended the reduction of promotional support; the increase of the
aftercare support; the improvement of the holistic support through a fifteen-year cooperative support package with an exit strategy; the provision of incubation support for co-operatives; and the establishment of a cooperative sustainable and development model (CSDM).
Submitted in fulfillment of the requirements of the degree of
Doctor of Philosophy in Entrepreneurial Studies, Durban University of Technology, Durban, South Africa, 2020.
Appears in Collections:Theses and dissertations (Management Sciences)

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