Transcript National LED Policy and Strategy Framework

Stimulating &
Developing Sustainable
Local Economies
Draft National Framework for
Local Economic Development in
South Africa
South African Cities Network
April 2006
Outline of the Presentation

Introduction

Challenges

A Bit about ASGISA

Basis of the LED Framework

Objectives

Outcome

Focus of the framework

Policy Thrust

Strategy

Concluding remarks
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Introduction

The National Framework for LED has a long history of discussion and
consultation with a number of role players

The predecessor of this document was also presented at a workshop to
the Economic and Employment Directors General cluster

Result of previous document - "Guideline for implementing LED in South
Africa“

This framework does not dictate what should happen in different
municipalities but focuses on what the state can do to support local
leaders, communities, businesses, NGOs, organised labour, and other
stakeholders to realise their own and their collective objectives.

It emphasises the need for local people to work together with each other
and with external role players to improve their lives. The state should
play the role of facilitator, net worker and monitor.

It is no longer just about what government departments do, but it is
about how they do, what they do!!
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Challenges

Capacity constraints in human resources and skills

Existing LED strategies and plans not linked to the local
reality

Lack of participation of important stakeholders in the design
of LED strategies and plans

Lack of clear strategies to deal with the informal economy

Reliance on consultants to design LED Programmes

Lack of information on the local economy

Over politicising economic development

National and Provincial Government Spheres parachuting
into localities
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ASGISA – Binding Constraints

Relative volatility of the currency, and current strength

Cost and efficiency of national logistics system and some
infrastructure

Shortage of suitably skilled labour and disjointed spatial
settlement patterns

Barriers to entry and competition in sectors of the economy

Regulatory environment and burden on SMMEs

Deficiencies in state organisation, capacity and strategic
leadership impacting on delivery
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ASGISA – Interventions

Macro-economic issues
 Challenge of improving budgeting in government—need to predict
income and expenditure better
 Need to monitor better implementation of decisions to spend,
especially on capex

Infrastructure programmes
• Overall government plans for infrastructure spending totals over R370bn
over the current MTEF
• 50%
To be spent by the three spheres of govt
• 40%
To be spent by State Owned Enterprises.
• 5%
To be spent through Public Private Partnerships
• 3 - 5%
To be spent by development finance institutions
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ASGISA – Interventions

Sector investment strategies
 Focus on sectors with potential for high growth, employment creation and
enterprise development
 Immediate focus on BPO and Tourism (strategies are essentially complete)
 Focus on agriculture/agro-processing for next set of initiatives:
 Other sectors include: chemicals; metals beneficiation (including capital goods);
creative industries; clothing and textiles;

Education and skills

2nd economy & SMME interventions
 Expansion of EPWP: bigger rural road projects; focus on maintenance; roll out of Early
Childhood Development component
 Strengthening of microfinance initiatives especially loans between R10 000 and R250000
 Targeted initiatives for women and youths particularly in construction and management of
infrastructure projects
 All sector strategies must have developmental elements

Public administration issues / delivery
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Basis of the Document

The White Paper on Local Government provides the
context and the direction for the role of municipalities in
economic development. The White Paper says:
“Local Government is not directly
responsible for creating jobs.
Rather, it is responsible for taking active
steps to ensure that the overall economic
and social conditions of the locality are
conducive to the creation of employment
opportunities”
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Objectives of the Framework

To build a shared understanding of LED in South Africa

To elevate the importance and centrality of effectively functioning
local economies in growing the national economy

To wage the national fight against poverty more effectively through
local level debates, strategies and actions

To improve community access to economic initiatives, support
programmes and information

To improve the coordination of economic development planning and
implementation across government and between government and
non-governmental actors

To build greater awareness about the importance and role of
localities which, globally, are playing an increasingly significant role
as points of investment, decision-making and development in a world
where the global-local dynamic is emerging as a key hallmark
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Outcome of the Framework (5yrs)

All District and Metro municipalities have credible LED strategies, effectively
implemented by a dedicated local economic development unit or similar entity

All Local Municipalities have at least one staff member (at least qualified
through the LGSETA LED Learnership) implementing its LED activities
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Analysis of the 52 district and metro municipal economies undertaken.

The competitive advantage of all District and Metro municipalities are
identified, incorporated into its LED strategy and exploited
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Appropriate structures exist to encourage and facilitate discussion and joint
economic planning among municipalities and with Provincial Government

All municipalities have innovative spatial strategies that links special
demarcated areas in place

All municipalities have at least one public private partnership through which
an economic activity is being implemented

A national centre for monitoring, learning and research in LED is established
and is supported by provincial centres
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Focus of the Framework

What the state with all its organs and agencies can do to support and
reward citizens who organise locally and operate in local level
partnerships to engage in greater economic activity, spreading
economic development in a more inclusive and shared manner

How the state can be a platform to facilitate the inclusion of the
attempts of all to participate in the economy. This would include
rewarding and enabling citizens who form organised communities in
response to social and economic rights programming

Improving the competitiveness of the 52 District and Metropolitan
municipal regions by providing an approach to developing local
economies with the participation of all relevant stakeholders
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Policy Thrust
Introduction - The private sector, consisting of private enterprises,
cooperatives, and community businesses, that operates in municipal regions
are the engines of economic growth. Their existence and ability to produce
competitively and generate greater levels of income and employment, is
dependent on an active State role in generating the appropriate and
necessary conditions, stimulus and governance efficiencies.

Public Sector Leadership & Governance -This includes a focus

Investing in Communities - The State should partner with
on local governance, effective intergovernmental coordination,
infrastructure investment capability, enterprise support, and
identification and promotion of competitive advantage of the 52
regions around customized sectors and clusters.
communities in order to boost circulation of local income and
community organization in 52 economic impact regions (46
Districts & 6 Metros)
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Strategy

Improve market and public confidence in municipalities - is a
critical first step in attracting investment and building loyalty to local
areas.

Identify and exploit competitive advantage of the 52 municipal
regions - A better understanding of the opportunities and constraints
in local economies should inform a more balanced development path
of these regions

Intensify enterprise support – The Small Enterprise Development
Agency (SEDA) should be the key vehicle for localised enterprise
support.

Sustainable Developmental Community Investment Programming
- suggests building community, and thus using a powerful cultural
dynamic, as the main vehicle and partner for LED together with the
resourcing of organised communities to carry out key local functions,
provide services and become important productive units
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Strategy 1 – Improve Markets

This strategy will require the LED Unit to focus on a range of
existing dplg initiatives (responsibility of municipal finance unit
with National Treasury) around the priority of improving local
economies.
 Activities
 Intensify support to municipalities under Project Consolidate
 Monitor and Report on Implementation of the Municipal Finance
Management Act (MFMA) and Property Rates Act.
 Assist municipalities to finalise appropriate spatial policies in their IDPs
that are linked to a municipal-wide land-use management system.
 Improve infrastructure investment and intergovernmental coordination
 Support Municipal- Economic Forums
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Strategy 2 – Exploit Competitive
Advantage

This strategy will be driven through the IDP/PGDS/NSDP alignment
task team that is led by the Presidency and of which the dplg and the
dti are a part.
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Activities
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Undertake analysis of the 52 municipal economies
Target priority growth sectors
Build capability for a knowledge economy
Market the 52 Regions and their Products
Establish Innovative Funding Instruments
Regulatory impact assessment
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Strategy 3 - Intensify enterprise
support

This strategy is largely a part of the on-going responsibilities of the
dti. There are also a number of additional sector-based enterprise
support initiatives.

Activities
 Implement the new small business development strategy
 Improve Access to Finance
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Strategy 4 - Sustainable Developmental
Community Investment Programming

This strategy will require a special programme to be established. The
LED unit will mobilise resources for an appropriate institutional
structure to develop concepts and proposals to pilot and replicate
sustainable developmental community investment programming
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Activities
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Crafts
Fresh Produce
Waste Collection
Street trading / Development of Markets
Community Enterprises
Housing
Organise Communities
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Concluding remarks

This framework for LED seeks to mobilise local people and local
resources, within the framework of the PGDSs and NSDP, to
become competitive in both the domestic and international
markets.

It augments the range of current sectoral initiatives to deal with
the challenge of employment creation

It is intended to build a shared understanding of LED in South
Africa and put into context the role of local economies in the
national economy.

It also lays the basis for the co-ordination of economic
development planning and implementation across government
and between key role players.

It lays the basis for deepening community access to economic
initiatives, support programmes and information
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