Local economic development, an emerging reality in sub saharan africa

3.3: Policy Consideration for LED in South Africa

The new developmental role placed on local government was precipitated by the need to apply LED at local level thus overcoming the challenges facing municipalities such as poverty alleviation and job creation. This then resulted in a series of broadly interrelated policy considerations, which include the fact that the country’s unemployment and poverty situation required the need to seek employment-generating strategies at both the national and local government level thus necessitating the introduction of LED (Nel et al, July 2006: p. 6).
Local governments in SA are now constitutionally mandated to promote the social and economic development of their municipalities. The constitutional guarantee has been strengthened by the White Paper on Local Government of 1998, which formally introduced the concept of developmental local government. In its other enabling provisions, it outlined that local governments are expected to promote job creation and boost the local economy through LED (South African Constitution, 1996: Sections 152 (c) and 153 (a) and DPLG, Section B, 1998).
The decentralization of government through democratic devolution of power to municipal governments and the responsibilities to their elected officials is a key feature of government policy; it reinforces popular participation in local development with emphasis on the needs of the people, was vital for LED in SA (Nel, et al, 2006: p. 7). Local spheres of government consist of municipalities which are established through out the country. Municipalities have the right to govern local government affairs subject to national legislation (South African Constitution, 1996: Sections 151 and 154). In terms of the Reconstruction and Development Plan¹ (RDP), which provides a wide statement on the developmental objectives in SA, development is about active involvement and empowerment rather than delivery of goods to a passive citizenry. This has been entrenched in the South African constitution which requires local governments to encourage the involvement of communities and community organizations in matters of local government and development (Nel et al, 2006: p. 7).
The status of local government and its developmental role has been enhanced by a commitment to the fact that local governments are not merely the lowest level of government occupying an inferior position, but rather a distinct unit of government having a special and distinctive place within the state. Government in the Republic of SA constitutes national, provincial and local spheres with each sphere being distinctive, interdependent and interrelated. This therefore, makes LG’s to have a sphere in its own right. This is one of the tenets of a democratic state which seeks to promote development at local level especially through LED initiatives. As such, localities will be able to take direct control of their developmental processes. This will facilitate planning, execution and the prioritization of their needs to local specificities. This is so fundamental in the success of any development process within SA (Ibid).
It worth noting that, the above policy considerations are in line with LED and poverty alleviation in SA due to its interventionist elements towards the poor. Secondly, it mandates local people to be part and parcel of their own development processes. And thirdly, the constitutional safeguards and the devolution of power to local councils are a further bolster to LED within SA. But the governments’ free market thinking in a dominated neo-liberal era is at variance with LED policies, which has provoked debates on how the government intends to close the gap between the first and the second economy with this free market concept.

3.4: Local Economic Development in South Africa

Municipalities in SA cannot pretend not to take into account the economic changes going on within their localities either through the rise or closure of businesses. This is because it has a consequence on job creation, poverty and municipal revenue sources. That is why municipalities have been termed developmental local governments so as to confront these challenges.

3.4.1: Developmental Local Government

The White Paper on Local Government in SA refers to local governments as developmental local governments which are inextricably linked to LED. It is local government that is committed to work with citizens and groups within the community to find sustainable ways to meet their social, economic and material needs and improve the quality of their citizenry. This is to be achieved by transforming LG to play a developmental role. It sets out a series of developmental outcomes and proposes several ways to become more developmental in order to improve the lives of their people (DPLG, Section B 1998).

3.4.2: The Role of Local Governments in Promoting LED in SA

The Constitution entrusts the LG to take reasonable measures, within its available resources, to ensure that all South Africans have access to their basic needs (adequate housing, health care, education, food, water and social security) and promote the economic development of municipalities (South African Constitution, 1996: Section 153 a). As such, developmental local government aims at playing a central role in the development of the communities. It focus on improving the quality of life of communities most especially those members and groups within communities that are often marginalized or excluded, such as, women and the very poor within the localities. This creates an opportunity for municipalities to develop their own strategies for meeting local needs and promoting the social and economic development of communities (DPLG, Section B: 1998).

3.4.3: Objectives of Developmental Local Government

The objectives of developmental local government include maximize social development and economic growth, integrating and coordinating activities at the local level, democratizing development and playing a key role in leading and learning within municipalities.

3.4.3.1: Maximizing Social Development and Economic Growth

Local governments should exercise its functions in a way that it has maximum impact on the social development of the community by meeting the basic needs of the poor and on the growth of the local economy. Through service delivery and regulations, local governments exert a lot of influence on the social and economic well-being of local communities. They set the agenda for local politics and the way they work tells a lot to their own residents, prospective migrants or investors towards existing opportunities. LG therefore need to have a clear outline for the local economy and work in partnership with local businesses, NGO’s and the population to maximize job creation and sustainability and investment opportunities for the citizens (DPLG Section B 1998).
It is worth noting that LG in South Africa are not directly responsible for creating jobs; rather they are in charge of guaranteeing that the general political, economic and social conditions of their localities are favorable for poverty alleviation through job creation and investment (Ibid).
Provision of infrastructure is the central contribution made by local government to social and economic development. Linking municipal contracts to social responsibility, proactively identifying and releasing land for development could have a significant impact on development. Policies and programmes can be initiated, aimed specifically at alleviating poverty and enhancing job creation. For instance, LG could assist with the provision of support services, such as training to small businesses or community development organizations (Ibid).
Local government can also promote social development through functions such as arts and culture, the provision of recreational and community facilities, and the delivery of aspects of social welfare services e.g. subsidized medical bills, creation of cheap and affordable schools for the poor. The empowerment of marginalized and disadvantaged groups is a critical contribution towards social development in order to boost LED (Ibid).

3.4.3.2: Integrating and coordinating

Various agencies, such as national and provincial departments, parastatals, trade unions, community groups and private sector institutions, contribute towards development. It becomes necessary for the LG to provide a platform and leadership role for those agencies which participate in achieving local prosperity. Poor coordination between service providers could severely undermine the development efforts of LG thereby thwarting the growth of LED. Municipalities should aggressively develop ways to pull resources and investment from both the public and private sectors to meet their development targets. A sustainable and livable settlement depends on the coordination of a range of services and regulations e.g. land-use planning, household infrastructure, environmental management, transport, health and education, safety and security and housing. Municipalities will need to work closely with other spheres of government and service providers in order to enhance the development of LED (Ibid).

3.4.3.3: Democratizing Development, Empowering and Redistributing

LG play a vital role in promoting local democracy and representing community interests within the municipality and at national level. This can be achieved through the involvement of citizens and community groups in the planning and execution of municipal programmes. LG can do a lot to support individuals and community initiatives, and to direct community energies into projects which benefit the area as a whole. The involvement of youth organizations is particularly important (Ibid).
Municipalities should promote the participation of marginalized and excluded groups in community processes. Obstacles to effective participation such as social values and norms as well as practical issues such as the lack of transport, household responsibilities, and personal security should be overcome. LG must adopt inclusive approaches in fostering community participation and actively encouraging the participation of marginalized groups (e.g. women) in the local community processes, which will in effect promote the general development aspiration of the municipality – LED (Ibid).
The participatory process should not impede development and the narrow interest of local elites must not be allowed to overcome the development vision of the locality. Participation should improve rather than hinder the development path (Smith, 2007: p. 148 and DPLG, Section B, 1998). The RDP aimed at the empowerment of the poor and the marginalized in communities. This was reinforced by the Growth, Employment and Redistribution (Gear) strategy with the intention of redistribution of income and opportunities in favour of the poor. This income redistribution approach is not compatible with the neo-liberal thinking as it gives room for greater intervention by the local government in the economic processes. Developmental local government is uniquely placed to combine empowerment and redistribution in a number of concrete programmes that includes:

-Service subsidies to provide openings for the poor to improve their status. This must be done in a way which is within municipal budget.

-Assistance to community organizations (women groups, youth associations) by the LG in the form of finances, technical skills or training can enhance the ability of the poor.

-The socio-economic development and community empowerment directed at poverty alleviation e.g. empowerment strategies which focuses on women are likely to prove the most effective and inclusive in improving poverty alleviation (DPLG, Section B, 1998).

3.4.3.4: Leading and Learning

The speedy changes at the global, regional, national levels are forcing local communities to reconsider the way they are organized and governed. In SA, communities are looking for new ways to sustain their economies, build their societies, protect their environments, improve personal safety and reduce poverty. Although support from other levels of government is critical, LG are increasingly devising strategies to make their localities more economically sustainable. This requires the concerted efforts of stakeholders in building this kind of social capital (this sense of common purpose) to find local solutions for local problems (Blakely and Bradshaw, 2002: p. 26 and DPLG, Section B, 1998). The municipalities can achieve this by:

1. 
   Having a local political leadership that is competent to bring together a network of local interests that collaborates to realize a shared vision of the municipality.
   
2. 
   Being open to problem-solving and dedicated to working in partnerships with stakeholders.
   
3. 
   Assuring that knowledge and information are acquired and managed in a way that promotes continuous learning and easy access to knowledge.
   
4. 
   Improving local democracy, human rights and promoting constitutional values and principles.
   
5. 
   Building awareness on environmental issues by encouraging citizens to utilize scarce natural resources in a wise, careful manner.
   
6. 
   Investing in youth development through involvement in civic and development programmes.
   
7. 
   Empowering the marginalized groups in the community and encouraging their participation.
   
8. 
   Empowering councilors as community leaders who should play an essential role in building a shared vision and mobilizing community resources for development (DPLG, Section B, 1998).
   

Developmental local government requires that municipalities become more strategic, creative, and ultimately influential in the way they function. They have a crucial role as policymakers, as thinkers, innovators and as institutions of local democracy. Therefore the developmental outcome of LG is that they should seek to mobilize a range of resources towards the provision of infrastructures and services thus achieving LED and poverty alleviation. It is worth noting that these developmental outcomes should not compromise national sovereignty as all LG and LED are carried out within the state (Ibid).

It is even more demanding for these elected officials to meet the development aspirations of the people as their next mandate is determined by the result registered during their current term in office. Whether they receive state or other subventions or not, local municipalities must generate revenue over which they can have control and guarantee sustainable development in order to meet the expectations of their population (Helvetas Cameroon, p. 1 & A H J Helmsing, 2001: p. 61). It becomes very imperative that LG mobilize their communities under the LED platform especially during this period when the central government is rolling-back its traditional responsibilities while delegating more tasks to local councils to direct the social and economic destiny of their people. Thus, the principal goal of LED is to stimulate local development by increasing local productivity, guarantee employment opportunities, improve on household income, develop local infrastructure and improve on the revenue of the local council using their existing human, natural and institutional resources at the local level. LG should manage their existing natural and human resources to create jobs and stimulate the economic activities of communities (Nel, 2001: p. 1003-1005).

3.4.4: Advantages of LED in SA

As opposed to traditional development policies, LED strategies empower local communities and generate local dialogue. Citizenry who had little or no control over the economic activities taking place on their territory begin to adopt a more proactive stance with regards to their own economic future. As such this leads to a general improvement in the quality and quantity of jobs because of the involvement of local stakeholders in the economic activity within their territory (Rodríguez-Pose, 31 December 2001: p. 1- 2).
It helps to make local institutions more transparent, more accountable and contribute to the development of the local civil society. It makes economic activities dependent on the specific economic conditions and competitive advantages of a defined territory (Ibid, p. 12).
LED generates sustainable employment in firms and makes them more capable of withstanding changes in the global economic environment (Ibid). In this light, we are going to look at the council monographic studies and strategic plan in designing LED in SA.

3.4.5: The Council Monographic Study (MS) and Strategic Plan (SP)

Municipalities are facing immense developmental challenges and to overcome these challenges, LG will need to understand the development situation within their municipality and develop concrete visions and strategies for realizing and financing their developmental vision in partnership with other stakeholders. Therefore monographic study and strategic plan are tools to help municipal councils focus their activities on the development opportunities and needs of the population. This will enable councils to engage in an integrated development planning in order to establish a development plan for the short, medium and long-term which is dedicated towards LED and poverty reduction (DPLG Section B 1998: p. 11).

3.4.6: Council Monographic Studies (MS)

MS are base line studies aimed at summarizing all relevant physical and socio-economic information about a municipality to enable the identification of the needs of the population and the development potentials. The MS reflects the councils’ actual specifications like history, sociology, population, natural resources, economy and infrastructure at the time the MS was produced (Helvetas Cameroon, p. 3).

3.4.7: Council Strategic Plan (SP)

The SP aims at planning the most urgent actions and investments in the council area. This is done through effective communication and collaboration between the council, the community and other stakeholders. The Strategic Planning is in three parts: short term (for 1 year), mid-term (for 5 years) and the long-term (for 25 years) of the council activities. The establishment of the SP in the short, medium and long-term is because LG have limited resources to exhaustively carry out the developmental needs of their municipalities as projected in the MS. Prioritizing these needs in order of urgency while taking into consideration the available income is important. This enables LG to align their agreed policy goals within their financial and institutional resources (Helvetas Cameroon, p. 4 and DPLG Section B, 1998).
The elaboration of the council MP and SP should be the priority of any council to achieve the development vision of its municipality. It is indeed the first step local actors pursue to clarify what objectives they share as well as the first step in the learning process for building LED. It is a fundamental exercise for fixing collective ideas, exchanging interests and values, and identifying the strengths and weaknesses of their territory. This makes it a necessary tool for the assessment of any future coherent actions for the achievement of LED for councils in SA (Canzanelli, October 2001: p. 15).
The elaboration of MS and SP for the council represents an important way of improving social cohesion. It is not an easy exercise to arrive at because it sometimes leads to different contradictory positions and interests. Once the local actors reach an agreement on what the development objectives the council are, the rest turns out to be easier and more effective (Ibid). As such, the council will identify a few key areas where it can intervene to stimulate economic growth. These are generally known as poles of economic development within the LED programme. The selection of poles of economic development must be carried out within the framework of participatory economic analysis (Helvetas Cameroon and Anembom Consulting, September 2005: p. 17 and DPLG, Section B, 1998).

3.4.8: Participatory Economic Analysis

This serves as the basis for engagement between LG, the population and other stakeholders in the design of the economic policies of the municipalities. The objectives of participatory economic analysis are (i) to define poles of economic development (ii) to analyze the economic areas that have the potentials to stimulate economic growth (iii) to involve all the stakeholders within the council area in the analysis. This will in effect enable the council to play its role as a catalyst in the design of the LED programme while all the stakeholders are part of the development process (Helvetas Cameroon & Anembom Consulting, September 2005: p. 17 and DPLG Section B, 1998).
To ensure that the economic poles identified can stimulate growth, they must have a competitive advantage over other regions that produce similar commodities. These include better quality, greater quantity, cheaper prices, rapid delivery, better services, regular supply and a guaranteed market both at local, national and why not international level (Helvetas Cameroon & Anembom Consulting, September 2005: p. 20). This helps the municipality to develop a holistic strategy for poverty alleviation. This is one of the major virtues of LED policies as it offsets the weaknesses inherent in the conventional economic policies (the global market challenge and multinational corporations) to the third world (DPLG, Section B, 1998).