Local economic development planning in local government : evidence from Vulamehlo local municipality.
Hlongwane, Siyabonga Sizwe Neville.
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Background: Against the escalating levels of poverty and unemployment affecting the majority of the developing nations, including South Africa, in 2003, World Bank raised the question of what it would take to end poverty and to improve the lives of the indigent. Among the proposals made by various international development agencies, such as the IMF, is the need to accelerate economic growth and to ensure that poverty-stricken people share in the benefit of that growth. Against this background, it is recommended that local government play a more developmental role in terms of facilitating socio-economic opportunities for local citizens in order to escape poverty. Local economic development (LED) was introduced during the first decade of the South African democracy, in which municipalities were expected to work with local stakeholders in developing local entrepreneurial skills and job opportunities for disaffected citizens. However, despite having well-defined LED objectives, most municipalities have not implemented nor achieved their LED targets. This is evident, given the magnitude of the existing challenges, including lack of skills among local entrepreneurs, lack of funding to support emerging local business and public participation in processes of economic development. Study Objective: This study was conducted to explore various mechanisms utilised by the South African local government to implement their Local Economic Development (LED) strategies. In particular, the former Vulamehlo Local Municipality (VLM), now part of eThekwini and Umdoni Municipalities, was used as a case study. Methodology: The study is qualitative in nature. In-depth interviews were used to collect data. Twenty interviews were conducted with the municipal officials and members of the business community. Findings, analysis and discussion: Among other findings, the study results demonstrate that the former VLM has an existing LED plan; however, it was not properly aligned with the Provincial Growth and Development Strategy of KwaZulu-Natal. Furthermore, since LED is an unfunded mandate of local government, the former VLM did not have the capacity to fund community business projects. Recommendations: As such, the study recommends that, in light of the current global socioeconomic challenges which are also experienced by South Africa, municipalities should strive to utilise available resources and institutional structures to create a favourable environment for economic development. It is assumed that these recommendations will assist iv South African municipalities to revive their LED strategies for the general welfare of the local citizens.