Lessons learned from Social and Solidarity Economy (SSE) policy development in South Africa: One-size does not fit all

News | 14 December 2020
In George, Western Cape, the consultation session was attended by the Deputy Minister Gina, Department of Trade, Industry and Competition and the General Representative of the Government of Flanders, Dr Geraldine Reymenants.
In 2017, the South African government began working on a policy to enable the Social and Solidarity Economy (SSE) in South Africa. Using the definition of SSE adopted at a regional conference on Social Economy in Johannesburg in 2009, the policy team focused on understanding and enabling the eco-system for all organisations that had a specified social or environmental outcome including cooperatives, mutual benefit societies, associations, foundations, non-profits and social enterprises. The ILO provides technical support to the policy, which is led by the Department of Trade, Industry and Competition under Minister Ebrahim Patel.

Social and solidarity economy (SSE) is an umbrella concept designating social and solidarity economy enterprises and organizations (SSEEOs), in particular cooperatives, mutual benefit societies, associations, foundations, non-profits and social enterprises, which have the specific feature of producing goods, services and knowledge while pursuing both economic and social aims and fostering solidarity

Source: Regional Conference on the Social Economy, Johannesburg, 2009

Consultations in the Northern Cape which were held in Kimberley on the 1st October 2019, and Upington on the 3rd of October 2019.
The embeddedness of SSE in its context means that extra attention needs to be paid to understanding what it looks like in that context. One-size does not fit all when it comes to SSE policy making. This is pronounced in the South African environment which is regarded as one of the world’s most unequal country’s on both the Gini and Palma Indices. The consequence is that the SSE looks different in different places, particularly across urban – rural divides within the country. The policy making process therefore needed to first understand the specificities of these contexts so that it could propose recommendations that would be of benefit.

During July – December 2019, the policy team travelled across the country to consult on the Green Paper and used this as an opportunity to gather data on what the SSE looks like in South Africa, its characteristics and to gather insights into how it functions. Over 760 people participated in workshops, at 22 events held across all provinces in the country. After data cleaning, the survey had 506 respondents making it one of the largest studies on the SSE in the country. What makes it particularly insightful is that respondents came from districts that plot across the Multi-Dimensional Poverty Index, reflecting a spread of contexts, views and experiences.

The three lessons learned from this research are outlined below:

Diversity is its strengths

The SSE is diverse: it is hard to identify a common demographic, or personal profile that typifies the SSE practitioner. These are people who run ventures that are rooted in their communities, with 96 per cent living and working in the same province. consequence of this is that people remain poorly networked – to each other, and to entities outside of their communities. They feel isolated and struggle to access support.

A lesson for policymakers is to focus on building networks: both peer and professional. Another lesson is to limit ambitions for scaling up growth of a single organisation, but rather to encourage lots of smaller organisations that are networked with each other horizontally and vertically.

Small and vested in the entity

These community-based entities are also small: earnings are limited and localised, with 84 per cent of earning at less than R25,000 (USD 1,600)/month. Grants remain a primary source of funding for the organisations, and the 22 per cent of income from customers shows that these organisations are structured around providing goods and services and are earning income as a result.

What stands out is the personal involvement with 20 per cent of respondents investing their own savings, and 12 per cent using funding from friends and family. This demonstrates that SSE practitioners are vested in their entities, willing to take on the personal risk in the delivery of their goods and services.

Participants provided feedback on ‘smiley face’ worksheets, which was captured and analysed in 2020, informing changes to the Green Paper.
A consequence of these social and environmental returns is that they happen over longer periods of time and are harder to quantify than financial returns. What we see is that SSE practitioners are very vested in their entities: both in terms of the community service that they offer but also financially. They deserve considered and considerate support.

Policy makers are called on to encourage governments to de-risk investments to SSE organisations, considering that their returns are not just financial, but also social and environmental.

Access to Resources over access to Funding

Lastly, we asked respondents to write what they would ask the South African President, if they had a meeting with him. This question was carefully phrased to identify needs, without asking what needs people may have. Top of the list was access to resources, an interesting combination of the need for funding and financing, together with insight into how to resource the SSE. Suggestions ranged from subsidies of electricity and water, shared office space, use of municipal buildings especially those that were empty or not being fully utilised, mentorship opportunities and collaborations.

For policy makers this presents an opportunity to encourage different types of community-level support that will resource SSE organization along with specific financial packages.

In conclusion, we can say that the development of any policy on SSE is complex and cross-cutting. A one-size-fits-all-approach is unlikely to meet the diverse needs of practitioners. These three lessons from the South African context can be considered by policy makers globally, as we work to build inclusive economies in the post-COVID-19 reality.