UMZIMVUBU LED REVIEW STAKEHOLDER

ENGAGEMENT WORKSHOP

PRESENTED BY MS THATO BOPAPE

DATE: 20/02/2020

PRESENTATION OUTLINE

1. Introduction

2. Legislative Framework for LED

3. Status Quo

4. The Revised LED Framework

5. Factoring Science Technology And Innovation

INTRODUCTION

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• Local government is a key sphere to promote sustainable

development and change the quality of life of the people.

• Section 152 of the Constitution mandates local

government to structure and manage its administration,

budgeting and planning processes to promote the

social and economic development of the community.

• Fulfilling this task requires it to have the right “pillars and

tools” to enable it not only to start activities, but to

maintain those activities.

LEGISLATIVE AND POLICY CONTEXT

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Legislative and policy environment clearly

outlines the role of local government

Constitution of the Republic of

SA

Municipal Structures

Act and Municipal

Systems Act

White Paper on Local

Government

CONSTITUTIONAL PROVISIONS FOR LOCAL GOVERNMENT

Provide democratic and accountable government for local communities.

Ensure the provision of services to communities in a sustainable manner.

Promote social and economic development.

Promote a safe and healthy environment.

Encourage the involvement of communities and community organisations in the matters of local government.

SCHEDULE 4B AND

SCHEDULE 5B

Outlines the functions of

local government.

Promoting social

development and

economic growth

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Maximising social

development and

economic growth.

Integrating and

coordinating.

Democratising development.

Leading and learning.

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WHITE PAPER: DEVELOPMENTAL LOCAL GOVERNMENT

Role of local govt is not

to create jobs ; but

To ensure that the overall

economic and social

conditions of the locality

are conducive to the

creation of employment

opportunities.

Through among others,

• Provision of

infrastructure

• Regulation

• Price and quality of

water, electricity and

• Planning and land-use

management

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STATUS QUO

1. Within municipalities there is confusion about the LED

department’s role.

2. LED is not considered a high priority.

3. LED Units lack capacity & resources & produce strategic

plans that are rarely updated.

4. The LED plans tend to be disconnected from reality, lack

economic rationale or make simplistic assumptions about

the economic value chains.

5. Assume that funding will come from other spheres of

government.

6. The private sector is also not aligned with the municipality

& economic analysis & intelligence are lacking.

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STATUS QUO

1. Municipalities depend heavily on national grants but have

little or no say in the plans developed & policy decisions

taken by national (& provincial) government although these

plans & decisions affect their local economies.

2. The dependency on national grants means that

municipalities are not compelled to think about or utilize their

infrastructure in economic terms & it also reduces local

accountability.

3. There is a need for the LED function at local level needs to

be re-imagined.

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THE REVISED LED FRAMEWORK

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THE VISION

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Vision for Local Economic Development:

“LED will seek to create competitive, sustainable,

diverse, innovation-driven inclusive local economies

that are vibrant places in which to live, invest, and

work, which maximise local opportunities, address

local needs, and contribute to South Africa’s national

development objectives, including sustainable ways

of utilising local resources and expand learning

capabilities”.

WHAT IS LED IN THE SA CONTEXT?

1. Maintains the approach of the White-Paper on LG: LG is not

directly responsible for creating jobs, the responsibility of LG

is to create an enabling environment. The pillar on Local

Economic Governance focuses on the LG role in creating

an enabling environment. This has a number of implications:

➢ Municipalities should spend their limited resources on

unlocking economic development opportunities, and not

directly on job creation.

➢ Municipalities must lead LED: a clear vision and a clear

strategic agenda.

➢ Stronger emphasis on understanding key role players to

drive the vision, and therefore strategic collaboration and

partnerships.

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DEFINING THE LED ACCORDING TO THE

FRAMEWORK

A consensus of stakeholders arrived at the following

definition:

“LED is the process by which public, business and non-

governmental sector partners work collectively to create

better conditions for inclusive economic development

that is characterised by employment generation,

economic capacity building for a local area, investment

attraction and retention, image enhancement and

revenue generation in order to improve its economic

future and the quality of life for all”.

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OBJECTIVES OF THE FRAMEWORK

1. To launch a radical fight against poverty, inequality, unemployment and

enhancing quality of all through the development of innovative and

inclusive and competitive local economies;

2. To support the potential of local economies to grow and develop the

national economy;

3. To raise greater awareness of the significance of regions, metropolitan

municipalities and localities as focal points in generating national

prosperity;

4. To intensify the support for local economies in realising and building their

economic potential, their diversity, levels of employment and the creation

of decent work for their communities;

5. To strengthen intergovernmental coordination for planning of inclusive

economic development between government and non-governmental

sectors.

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1. CONTEXTUAL ENVIRONMENT

2. REVISED CORE PILLARS

2.1 Building a diverse &

innovation driven local economies

2.4 Developing learning and

skillful economies

2.2 Developing inclusive

economies

2.3 Enterprise development

& support

2.5 Economic Governance

and Infrastructure

1.1 National Economic Development Context

1.2 LG & LED Context

3. LED SUPPORT (ENABLING) PILLARS

3.5 Planning, Research and

Strategy

3.2Funding

3.3 Organisational& Institutional

3.5 Capacity Development

3.1 Monitoring

& Evaluation

SCHEMATIC OVERVIEW OF THE FRAMEWORK

1.3 SA Policy Environment1.4 International Contemporary Issues In

LED

2.6 Strengthening

Local Innovation

Systems

LLED Core Pillars

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Bu

iild

ing

a D

ive

rse

& In

no

vati

on

-dri

ven

Lo

cal E

con

om

ies

•Local sector development

•Metro economic development programme

•Link to Regional Economic Development

•Link to Regional industrial development

•Advancing primary, secondary and tertiary sectors

•Exploiting STI to advance sustainability, competitiveness and productivity

•Linking LED to corridor development & sub-national cross boader programme

De

velo

pin

g I

ncl

usi

ve E

con

om

ies

•Development of informal economies

•Inner city economic revitalisation

•Township economic development

•Inclusive and integrated rural economies

•Expanded public and community works programmes

•Small town economic development programme

De

velo

pin

g L

ear

nin

g &

Ski

lfu

l Eco

no

mie

s

•Improving economic and management capacity

•Leadership and management skills

•Addressing skills gaps

•Enhancing capacities to innovate

•Enhacing capacities to foster innovation-driven LED

•Enhacing capacities to foster

•Workplace skills

•21 Century skills

•Strengthening linkages between knowledge organisations and LED actors

En

terp

rise

De

velo

pm

en

t an

d S

up

po

rt

•Support businesses of women, youth owned and people with disabilities

•SMME support

•Techno-entrepreneurship

•Co-operatives support

•Business incubation

•Business linkages

Eco

no

mic

Go

vern

ance

an

d In

fras

tru

ctu

re

•Improving LED planning capacity

•Improving economic and management capacity

•Enhance Administrative economic development capacity

•Improve access to development funding/finance

•Strengthening LED agencies

•Improve the ease of doing business, i.e. red tape reduction

•Improve business attraction, retention and expansion

•Image enhancement, beutification and marketing of local spaces

•Faciliate and coordinate investment

Str

en

gth

en

Lo

cal I

nn

ova

tio

n S

yste

ms

•Strengthen municipality-university and municipality-science council linkages

•Strengthen capacities of municipalities to promote innovation & techno entrepreneurship

•Provide support for science and technology infrastructure

•Provide support for innovation infrastructure

•Strengthen capacities of municipalities to undertake mapping of local innovation systems

INSTITUTIONAL PRINCIPLES FOR LED

1. A functional economic development unit can exist on a

small budget.

2. A functional LED Unit needs to be involved in both pro-

growth and pro-poor projects.

3. LED needs to occupy centre stage within a municipality &

economic thinking must be integrated into the other

functions performed by a municipality.

4. A functional LED Unit should furnish the rest of the

municipality with robust economic intelligence.

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STRATEGIC ISSUES IN REIMAGINING LED

• LGs should mainstream economic considerations into their sectoral

departments & also into the accompanying strategies of those

departments.

• LGs need to use municipal levers, such as land-use planning, to

support their economies.

• Municipalities should do more to build economic intelligence, with the

assistance of other spheres of government.

• LGs should strengthen economic strategies that are appropriate for

their specific economic context and based on solid economic intelligence.

• LGs should develop economic partnerships, as municipalities need to

facilitate, not drive economic development.

• LGs should create appropriate institutional arrangements that support

economic development.

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ISSUES TO RESOLVE

1. Economies often dependent on a single sector.

2. Old economies.

3. Economies vulnerable to national decisions.

4. Important regional role within their rural hinterlands.

5. Links with the larger urban areas.

6. Aging infrastructure & poor municipal finances.

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AREAS OF CONSIDERATION

Longer-term strategies include helping sector departments to understand

local economic drivers & consequences/ risks fore their areas.

To achieve this LED units can take the following actions:

• Develop narratives to explain the current economic situation, future

risks & implications so municipal management & other departments

understand

• Identify economic assets & assess the municipality’s competitive

advantages, which might (for example) be linked to a city’s regional

services function

• Develop long-term plans & visions & ensure these plans are included

in the IDPs

• Link IDPs and SLPs more effectively in mining towns

• Develop appropriate intergovernmental relations to support a local

development strategy.

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WHAT DOES THIS MEAN PRACTICALLY?

• Employ more people with economic & business skills.

• Educate other departments to understand the relationship between

the services they deliver & economic development.

• Develop long-term plans & vision, based on the municipality’s

competitive advantages & economic assets.

• Tackle the business red tape.

• Introduce proactive rezoning & more flexible land-use regulations,

especially during the times of economic decline.

• Develop a database of business closures, changes & confidence

levels.

• Build a comprehensive understanding of local economic drivers &

assets.

• Appoint an economic development advisory body.

• Use municipal information (e.g. land use applications, clearance

certificates ) to build economic intelligence.

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LED SUPPORT TO BUSINESSES

A local business enabling environment survey should be conducted and

should aim to achieve several outcomes . They should seek to:

• Find out about individual businesses, how long they have been

established, number of employees, skills, products produced, exports

and supply chain information;

• Establish what the business community thinks are the major strengths,

weaknesses, opportunities and threats that face the area;

• Establish the types of problems that are faced by businesses when

dealing with municipalities and other tiers of government;

• Enquire as to what needs businesses have, what ideas they can bring to

the LED agenda; and,

• Establish contact with local businesses to ensure that an ongoing

business relationship is formed with the LED team.

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Thank You!