From:

 Kojo  Parris,  Founder,  African  Social  Entrepreneurs  Network  

To:  Minister  Ebrahim  Patel  

Deploying  Social  Enterprises  for  employment  &  economic  growth  

Since  1995,  the  ANC  government  has  made  significant  progress  in  addressing  many  
of   the   needs   of   poor   and   disadvantaged   South   Africans.     Nevertheless,   the   gap  
between   the   expectations,   and   objective   reality,   of   many   remains   too   large   as  
signalled  by  the  spate  of  ongoing  protests.    There  is  a  real  risk  that  this  civil  action  
finds  a  permanent  &  oppositional  political  expression.        

The   reasons   for   underemployment   &   attendant   sub-­‐economic   growth   are   many,   but  
due   significantly   to   the   State’s   undercapacity.     This   is   a   consequence   of   larger   global  
changes  in  the  accepted  role  of  the  State,  the  historically  poor  education  system  and  
systemic   weaknesses   in   an   overstretched   public   service.     On   the   other   hand,   SA’s  
Private  Sector  is  mostly,  at  best  agnostic  to  the  broader  national  challenges,  and  at  
worst,  venal.      

Neither   of   the   above   circumstances   will   change   into   the   medium   term,   hence   new  
partnerships  are  required  to  address  the  employment  &  economic  growth  challenge.    
Post   1994,   the   considerable   civil   society   sector   was,   for   a   variety   of   reasons,  
demobilised.     But,   together   with   purpose-­‐formed   NGOs,   NPOs   etc,   many   have  
continued   to   provide   social   goods   and   services   to   previously   disadvantaged  
communities.     Social   Enterprises   (SEs)   are   the   subset   of   these   entities   that   provide  
social   (public)   goods   and   services   to   the   poor   while   striving   for   financial   and  
operational   viability.       These   entities   have   deep   roots   in,   and   are   trusted   by,   host  
communities,   and   have   overcome   many   of   the   operational   challenges   of   service  
delivery   with   which   the   State   battles   to   overcome.       Two   key   challenges   SEs   face   are  
access  to  suitable  capital  and  effective  State  partnerships.    For  example:  

• The  Kuyasa  Fund  in  CTN,  led  by  former  UDF  cadre,  Olivia  van  Rooyen,  has  for  the  
past  12  yrs  provided  over  32  000  households  in  Khayaleitsha,  Langa  and  nearby  
areas  with  tailored  financial  and  related  support  to  incrementally  improve  their  
shacks   into   habitable   homes   &   collateralised   assets,   using   a   mere   R68m   of  
capital.    R10m  of  concessional  funding  will  allow  them  to  partner  another  5  000  
informal  households  
 
• The   Hope   Factory,   at   a   per   capita   cost   less   than   R3   000,   uses   a   mix   of   vocational  
sklls   training   in   a   supportive   environment   to   transform   long   term   unemployed  
women   from   townships   around   PE   into   dignified,   confident,   employable   citizens.    
Each  graduate  is  tracked  and  over  90%  remain  employed  3yrs  on,  and  of  the  high  
proportion   that   chose   to   become   self-­‐employed,   some   80%   were   still   trading  
three  yrs  later.      

Minister,   the   above   are   drawn   from   a   large   universe   of   over   a   hundred   thousand  
(100   000)   SEs   in   (South)   Africa   that   do   not   benefit   from   an   active   &   constructive  
engagement  with  the  State.    Your  recognition  of  the  social  economy  as  a  plank  for  
economic   development   is   an   important   but   incomplete   step   in   exploiting   their  
potential  –  we  wish  to  engage  by  proposing  practical  steps  to  realise  this  potential.