The Revised LED Framework

26 March 2014

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Outline

1. Background and Context 2. The Draft Framework 3. Conclusion and Way Forward

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Background: The 2006- 11 Framework

• • • • • • The 2006-11 National LED Framework was launched for discussion in August 2006; presented at the President’s Coordinating Council , and approved by LG MinMEC in September 2006 A five-year strategic framework intended to support the development of sustainable local economies through integrated government action Developed as a guide to advance an understanding of LED Proposed a strategic implementation approach that municipalities, provinces, national government, state-owned enterprises and communities may concentrate on in order to improve local economic development.

Sought to guide the implementation of the LED Key Performance Indicator of the 5-year Local Government Strategic Agenda through some suggested actions Its Vision: Robust and inclusive local economies exploiting local opportunities, real potential and competitive advantages, addressing local needs and contributing to national development objectives 3

Background: The 2006- 11 Framework

• • • The 2006 LED Framework focused on eight outcomes that were developed around four strategic pillars/thrusts.

The four strategic pillars/thrusts: The 8 outcomes: ₁ Improve Market and Public Confidence in Municipalities; all Regions; ₃ ₂ Identify and Exploit Competitive and Comparative Advantages in Intensify Enterprise Support in Local Areas; ₄ Introduce Community Investment Programming ₁ Analysis of the 52 district and metro municipal economies; ₂ Comparative advantage and competitiveness of all Districts and Metros exploited; ₃ Districts and Metros to have credible, effectively implemented LED programs; ₄ LED strategically placed in the organisational structure of all municipalities; ₅ Effective utilisation of IGR structures; ₆ Innovative spatial development strategies, land-use polices and by-laws - for especially informal/street traders and SMEs; ₇ At least one public-private partnership; ₈ National excellence centre for monitoring, learning and research in local and regional economies is established.

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Background: Why A Revised Framework

2006 Framework developed for a five-year horizon. In 2010, DCoG commissioned a study to evaluate the impact of LED over the five years of implementation of the Framework.

The evaluation noted exemplary progress in LED practise: a number of municipalities have adopted LED Strategies; funding instruments mainly driven by provincial government; IGR Structures at various levels of functionality; training programmes mainly driven nationally; research; academic programmes; existence of LED units in municipalities; emergence of development agencies; donor community (e.g. EU and GiZ); Strategic partnerships (e.g. Business Trust) However, the evaluation noted that the potential of LED and local government to contribute significantly to national economic development goals had still not been fully exploited and / or optimised: • The absence of a functional and central monitoring, learning and research capability affected the extent of monitoring progress in LED (8 th outcome of the 2006 Framework) To stimulate and revitalise LED Planning, Coordination and Implementation, it became necessary to revisit the 2006 Framework and consider: • Why progress has been slow to implement it • • Capitalise on the gains made Address the challenges • Provide an updated framework 5

The Updated LED Framework

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The Updated Framework is a progressive development on the 2006 Framework, a revised iteration: however, the new Framework is developed as a base document to a new LED

Strategy.

• The Framework remains a strategic coordination, planning and implementation guide that provides and enhances a commonly shared understanding of LED in South Africa. • • Due to challenges identified in the implementation of the 2006 Framework, a Strategy will go beyond providing proposals; guidance and approaches. The Strategy will commit relevant stakeholders to specific , time bound and resourced actions to improve LED Outcomes The Framework is not a new economic policy document for LG – it consolidates existing national economic development programmes and focuses on their relevance to local development 6

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The Vision and objectives of the LED Framework

Vision: “Robust, inclusive and sustainable local economies exploiting

local opportunities and competitive advantages, addressing local needs and contributing to national development objectives”

The objectives of this Framework: – Support the national goals of reducing poverty, inequality and unemployment – To intensify support of local economies in realizing and building on their economic potential – To strengthen intergovernmental coordination of economic development planning and implementation – To deepen and enhance the economic importance of LG in national development – To develop greater awareness of the significance of localities, regions and metropolitan municipalities as nodes of economic growth 7

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The guiding principles of the LED Framework

Accelerated, shared and inclusive economy Local competitiveness Integrated Spatial and Economic Planning and Development Redressing poverty and proactive absorption of the poor Economic management by a developmental capable state Learning and skills development Integrated urban and rural economic development 8

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Understanding the New Framework

The new Framework has been developed taking into account the following: •

The State of the Economy

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Economic Policy Environment

– Priority Programmes of government and new priorities (e.g SIPS; CWP; CRDP) •

Local Government Turn-Around-Strategy and Outcome 9

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LED Challenges and Opportunities within an Inter-governmental context

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Strengths and Weaknesses of the 2006 Framework

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International Experiences and Lessons

The LED Framework provides for: • Articulation of the priority focus areas in LED, for ALL LED stakeholders over a five-year period • The “what” , not the “how, who and when” – the specific programmes within each pillar and support-enabler are to follow in a comprehensive strategic implementation plan that will indicate roles, resourcing, timelines and institutional arrangements.

• Articulation of the role of the local government in the achievement of the national economic development goals • The “differentiated approach” – programmes and roles identified for different municipalities • Maintain key aspects of the previous framework, in a revised configuration 9

SCHEMATIC OVERVIEW : 2013-2018 NATIONAL FRAMEWORK FOR LOCAL ECONOMIC DEVELOPMENT CONTEXTUAL ENVIRONMENT National Economic Development Context LG & LED Context

SA Policy Environment International Contemporary Issues In LED

Building a diverse economic base Developing learning and skillful economies REVISED LED CORE PILLARS Developing inclusive economies Enterprise development & support Economic Governance and Infrastructure Monitoring & Evaluation LED SUPPORT (ENABLING) PILLARS Funding Organisational & Institutional Capacity Development Planning and Strategy

National Economic Development Context

• • • • • National output showing signs of stagnation Unemployment remains high at 25.2 % with youth making up 71% of the unemployment Government remains the key employment creator (200,000) followed by the private sector (174,900) Cities and large towns produce 80% of South Africa’s Gross Value Add and they are home to 69% of the country’s population Rural areas account for 13% of the national GVA whilst being home to 22% of the

population

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LG and LED Context

State of LG Report: –

LG is struggling to fulfill its developmental mandate

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LED implementation is erratic across the municipalities

National Diagnostic Report: LED Planning, and LED Sections in IDPs need to be improved LG Turn-around Strategy: Need to increase the municipal contribution to job creation (focus on implementation of the framework; ward-based economic planning) LED challenges are based on the Strategic Review of Local Economic Development and the Review of the National Framework for Local Economic Development: –

The meaning of LED

– Poor intergovernmental relations on LED – Productive partnerships – – – – – – A clear communication & knowledge sharing programme Capacity constraints Differentiated approach to LED support

Funding for LED

Poor investment in economic information Dedicated focus on supporting the an inclusive economy 12

LED Lessons from the SA Policy Environment

• • • Provides policy grounding of LED with emphasis on the NDP, NGP & IPAP National Development Plan • Sector diversification of the economy is crucial for local economic development • Small business development should anchor local economies • Inclusive rural economies anchored by land reform, agriculture and job creation are crucial for regional economic development • Spatial economic transformation is crucial in bringing about increased urban population densities, providing reliable and affordable transport and moving investments towards dense townships New Growth Path • The job creation, reducing poverty and redressing inequality are central to local economic development • The diversification of local economies in terms of sectors is crucial for broader economic development • Public infrastructure investment, support for small business, skills development, working with the industry/ business sector and rural development are crucial instruments for effective local economic development 13

LED Lessons from the SA Policy Environment

• • • • • Industrial Policy Action Plan • • Growing importance of localisation and of the green economy Local economic development to be anchored by identified priority sectors; industry clusters and value chains, and exploit new economy opportunities and invest in the realisation of the long term advanced capabilities • Strengthening the substantive contribution and involvement of Development Finance Institutions and the Parastatal Sector in economic development • Expanding functional economic linkages beyond the borders of RSA so as to leverage on neighbouring countries Evolving debates around the direction of national spatial planning: The role of infrastructure in spatial development; and The emergence of new regional industrial development initiatives Growing importance of sector based planning: Tourism, Agriculture; Mining; Fisheries; Cooperatives; Informal Economy; SMMEs; etc. 14

International Contemporary Issues

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The Continued Relevance of LED in a Changing World Economy;

• LED policies are considered to represent a critical response to the territorial challenges produced by globalisation (ILO, 2012).

• LED strategies empower local societies and generate local dialogue; making local institutions more transparent and accountable thereby contributing to developing civil society • LED strategies seek to embed economic activity in a territory

The Positive Role of the Local Developmental State

• an interventionist pro-poor approach by local government – e.g. pro-poor transport system; publicly-funded business support centres

The Adoption of LED Strategies is Demonstrated to have Positive Human Development Impact

• an analysis of 898 municipalities in Mexico -better development outcomes as a result of: the presence of a development plan; an emphasis on sustainability; local leadership and entrepreneurship; the existence of participation mechanisms, development links and capacity building, as well as the degree of local autonomy as factors that would facilitate the success of LED 15

International Contemporary Issues

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The Informal Economy: The Most Distinctive LED Focus for the Global South

• Informal sector is now a core policy issue for LED policy and practice, particularly in the global South. Its sheer weight and numbers dictate that the informal economy be acknowledged as a critical and distinctive policy focus for LED. It represents an important livelihood strategy and in sub-Saharan Africa, informal self-employment is considered to be the dominant activity in many countries

Building Competitiveness and Beyond; and

• The pursuit of competitive local economies remains undisputed as an LED strategy: e.g. promotion of industrial clusters, thereby local SMMEs; business enabling environment etc. The debate has moved beyond this point, and the focus is now on ‘inclusive growth’ – this has great resonance in SA

LED, Climate Change and Greening.

• International concerns for the impact of climate change throws up a set of critical new challenges for both LED policy and practice in respect of adaptation and mitigation strategies. It also presents a catalyst for economic regeneration in the form of ‘green jobs’: e.g. renewable energy 16

Contextualising the Framework Pillars

Building a Diverse Economic Base Developing Learning and Skilful Local Economies Developing Inclusive Economies Enterprise Development and Support Economic Governance and infrastructure

Intended to drive the modernisation and diversification of the local economy.

Grounded on sector development to ensure that lead and emerging sectors are supported, metropolitan economies are activated, regional economic development, particularly at District level is encouraged and regional industrial development programme is given the necessary traction. Accentuates the role of the private sector in development, underpinned by current economic programmes. Aimed at creating highly skilled, innovative and adaptable workforce to attract and support the long term growth of high value jobs, wealth-creating businesses and

fight unemployment at local level

Aimed at driving a pro-poor local economic development agenda, inclusive of the marginalised sectors of society and communities Seeks to create an enabling environment conducive to the development of SMME, Cooperative, Youth and Broad-Based Black Economic Empowerment Enterprises and provide a broad range of business development support services by working with enterprise support organisation in both the financial and non-financial support spheres.

Premised on the fact that the state must play a central and strategic role by

directly investing in underdeveloped areas and directing and incentivizing private

sector investment, including through effective deployment of state-owned 17 enterprises and development finance institutions.

Pillar One: Building a Diverse Economic Base

Sectoral Development (e.g.Manufacturing, Agriculture, Tourism, Green Economy, etc) Metropolitan Economic Development Regional Economic Development Programme Regional Industrial Development Programme Industrial Cluster Development Programme

Core Framework Programmes

Pillar Two: Developing Inclusive Economies Pillar Three: Enterprise Development & Support

Informal Economy Support Inner City Economic Revitalisation Township Economic Development Small, Medium & Micro Enterprises Cooperative Enterprises Broad Based Economic Empowerment Support Inclusive Rural Economy Small Towns Development Youth & Women Enterprises Youth & Women Economic Development Business Development Support Expanded Public Works Programme & Community Works Programme Local Procurement & Buy Local Campaigns

Pillar Four: Economic Governance And An Enabling Environment

Improving Economic Leadership and Management Capacity

Pillar Five: Developing Learning & Skilful Local Economies

Tackling Basic Skills Gap Administrative Economic Development Capacity Reduce Municipal Red Tape Developing Workforce Skills Effective Municipal Business Regulations Access to Development Funding/ Finance Developing an Enterprise and Entrepreneurship Culture Developing Local Economies as Distinct Brands Developing Leadership & Management Skills

Support / Enabling Pillars

Main Proposals Organisational & Institutional Funding and Finance

• Provincial government – lead LED Support Function • LG: LED a stand alone department in municipalities • IGR Structures across the three spheres • Increase DM/LM LED Capacity • Support to municipal agencies • LED mainstreamed in municipalities • Technical assistance fund: Planning / strategy development etc • A growth fund: catalytic support to the provincial and municipal flagship projects • Business enabling fund: Townships and Inner Cities • Community/social enterprise support

Monitoring & Evaluation

National LED Facilitation and Monitoring Unit Provincial M&E District Coordination National Business Forum Civil Society engagment Provincial Business Forum (or existing) Local Business Forum (or existing)

HR & Capacity Development

Workforce development Academic and training institutions Couching and mentoring

Planning and Strategy

National and Provincial to make meaningful contribution to IDPs Role of Academic Institutions in Economic Planning Information DM to lead regional planning LMs to lead local sectoral plans

Conclusion

• • • • • • The Framework provides for broader consultations with LED Stakeholders to agree on the key priorities and focus areas in LED over the next five years An implementation approach and action plan will be developed as part of the strategy to get to the ‘specifics’ of how the framework is to be implemented – some programmes are already being implemented Institutionally: the framework has implications for all the three spheres of government in terms of coordination and capacity Provinces and municipalities will phase-in their own plans (LED Strategies etc) over time to align to the national strategy The Framework will be concluded in March 2014 The draft strategy will be concluded in June 2014 20

4/25/2020

Thank You

CONTACT: PHUMLA NDABA [email protected]

-- Discussion