Economic development is the key element in truly empowering people and alleviating poverty. Yet it is defined in diverse ways by different municipalities. According to the eThekwini Metropolitan Municipality in KwaZulu-Natal, economic development ‘is about building a globally competitive region so that all communities can benefit from economic growth’. For the City of Johannesburg, it is about ‘creating a conducive environment for investment’. The City of Cape Town defined it as ‘the process through which partners from the public, business, labour, and non-governmental sectors work collectively to identify, utilise, and harness resources to grow and transform the economy in specific local areas, through implementing specific projects that build on opportunities and/or address economic development constraints.’ What the above three definitions have in common is their recognition of the need for growth.

The study on local economic development compiled generic recommendations for municipalities based on case studies as follows:

·         Municipalities should address growth of the formal economic sectors, but also target the small-scale and informal sectors.

·         Although there should be interaction within different sectors of municipalities and other tiers of government, municipalities should also interact with other stakeholders such as businesses and non-profit organisations.

·         They should create an environment in which businesses can develop, and also one that attracts investment.

·         Municipalities should devote realistic budgets and appropriate staff to local economic development units and services.

·         Interventions need to be accepted as part of all municipal functions in practice and policy.

·         Municipalities should initiate defined monitoring and evaluation programmes to gauge the success of their initiatives.

Although these recommendations could can help municipalities improve the state of economic development in their communities, municipalities need to ascertain which aspects will be useful to deal with their specific challenges. However, the challenges facing local economic development are in some cases external, such as the effect a decline in gold mining activity would have on the Free State goldfields (Lejweleputswa District Municipality).

In addition, a major challenge for municipalities is the limited power they have to influence several key factors that contribute to economic development. For example, a good education is key in ensuring a skilled and professional labour force, yet this is a provincial and national area of jurisdiction. Decentralisation of powers would allow municipalities have more on influence their economic situations. But they are handicapped by corruption, nepotism, and skills shortages which, in some cases, make municipalities even unable to provide the most basic services.

The municipal outreach project will conduct research on best practices that will enable municipalities to combat the poverty challenges which were identified during the first year of the project.

-          Nthamaga Kgafela