NATIONAL LED FORUM PRETORIA- RESERVE BANK

1. Together accelerating Local Economic Development

2. NATIONAL LED FORUMPRETORIA- RESERVE BANK S. N. MTMKULU KZN DPT ECONOMIC DEVELOPMENT LED- LEE Together accelerating Local Economic Development

3. Overview of presentation • Introduction • What is the LED unit currently doing • What is the plan of the unit to advance LED in financial year 2009/10 • What are the main challenges in LED and how can the forum assist • Concluding remarks Together accelerating Local Economic Development

4. Introduction • The biggest challenge • create jobs in a dual economy where a wealthy, regulated modern economy flourishes alongside a marginalized and informal economy characterized by high unemployment and poverty • Bridge the gap between two economies • address market failures and stimulate partnerships at the local level that broaden • black economic participation, improve competitiveness, stimulate business growth and create jobs • The Accelerated LED Program. • The essence - must be driven by local actors acting in partnership across government, business and civil society • The principal role of provincial and local governments: • create an enabling environment within which local economies can grow and prosper. • It is essential that the private sector takes advantage of the opportunities afforded to stimulate and invest in the emergence and growth of competitive and sustainable enterprises and jobs. • The economic participation and empowerment of communities and workers is the third critical dimension of LED. Together accelerating Local Economic Development

5. Introduction (CNTD) • LED- critical component of serving the needs of the developmental state in the South African context • Mandate of DMs and LMs embedded in considerable policy documentation • While there have been a number of initiatives and programmes there is a need for institutional alignment, establishment, coordination and management of LED programmes and institutions at all levels of government in the KZN province, together with appropriate capacity building mechanisms to support such alignment • Range of business associations • poorly resourced, uncoordinated, racially divided, inappropriately structured, and not interacting and communicating effectively with local government • lack of appropriate partnerships for local economic development between public and private sectors, and with other organs of civil society • The full potential of local business contributions in local economic development is therefore not being realized. Together accelerating Local Economic Development

6. What is the LED unit currently doing • Gijima KZN • support projects that could assist disadvantaged people to improve their lives through economic activity. • Funds • Business Enabling Fund (BEF) • Assist provincial and local government to create an enabling environment for local economic development • Local Competitiveness Fund (LCF) • encourage partnerships which facilitate private sector investment in sustainable local economic development projects. • LCF Competitiveness Action Plan (LCF CAP) and LCF Implementation (LCF IMP). • Network & Co-Operating Fund (NCF) • To establish a provincial Learning, Monitoring and Research Facility (LMRF); provide LED institutional support ; provide marketing and communications for the program. • Technical Assistance Fund (TAF) • provide technical assistance to local and provincial government and partnership groups to more effectively carry out their responsibilities with regard to local economic development • DED Funded Projects • Rejuvenation of Trading Centers • Huge spatial disparities which exist between the urban service centres/towns and the smaller, rural service centres/towns. • Disjuncture between where people live and where social and economic opportunities are concentrated. • Bridge this gap, to ensure that the quality of lives of the rural population are enhanced and to stimulate economic growth opportunities within the rural trading centres and urban township areas in KwaZulu-Natal. Together accelerating Local Economic Development

7. What is the LED unit currently doing (CNTD) • Capacity Building Unit • Funding Forum established in 2005 • Currently the Funding Forum comprises ABSA, Development Bank of South Africa, FNB, Industrial Development Corporation of SA, Ithala Development Bank, Khula Enterprises Finance Ltd, National Development Agency and Standard Bank • Platform to optimise, strengthen and forge partnerships and joint ventures in recognition of the need to promote private and public synergies toward the objective of local economic growth and development." • leverage additional private and public sector funding for projects approved for implementation. Together accelerating Local Economic Development

8. What is the plan of the unit to advance LED in the financial year 2009/10 • Projects from previous years • Approval of 2009/10 projects not yet finalised. Together accelerating Local Economic Development

9. What are the main challenges in LED and how can the forum assist • Absence of an appropriate asset base and infrastructure and associated service delivery. • Improving the delivery of infrastructure services to poor communities is a critical element of LED in support of poverty alleviation • Absence of appropriate, synergistic integrating mechanisms. • Integrating mechanisms enable actors from various sectors/ relevant stakeholders and communities to come together to share ideas, engage in joint problem solving and action. • Inability of location to equitably distribute benefits and proceeds from economic activity. • If the gains from economic activity are restricted to firms and entrepreneurs only, then although there may be economic growth for a location, it does not translate to overall locality development. It leads to further disparities in wealth, with uneven development and may contain vast pockets of underdevelopment and marginalisation • Lack of embeddedness of the location in value chains networks • The extent that a location is embedded in value creation networks regionally and globally. A high level embeddedness implies that the location has many linkages and offers value into national and global value chain networks. A low level of embeddedness implies that the locality is marginalised and hence network poor Together accelerating Local Economic Development

10. Forum Assistance • To develop the LED capacity of organisationally based stakeholders for effective coordination, planning and implementation of LED that leads to equitable and sustainable economic growth in KZN. • Develop a framework, proposed structures and mechanisms for the institutional alignment, establishment, coordination and management of: • LED programmes and institutions at all levels of government in the province specifically at district and local municipal level. • include an overall provincial coordinating and management mechanism • Local business associations in the district municipal areas of KZN in relation to LED programmes, institutions and agencies at all levels of government in the province Together accelerating Local Economic Development

11. Forum Assistance (CNTD) • Develop a support framework, implementation modalities and mechanisms for capacity building and training interventions to assist in: • the setting up, coordination and management of sustainable LED programmes, structures, institutions and agencies at all levels of government in the province • the rationalisation, institutional alignment, coordination and management of business associations in relation to LED programmes structures, institutions and agencies at all levels of government in the province; • and to conceptualise, plan and implement effective strategies, programmes and projects based on best practice • Creation and operation of a visible provincial LED Forum Together accelerating Local Economic Development

12. Concluding remarks • LED Strategies vs Implementation • Strategy: Thinking and Effort put on paper- real momentum around a project • Why are LED strategies not happening • Institutional Arrangements? • Correlation, coherence & coordination between gvt dpts • Implementation Oriented • LED – GVT Strategic goals Together accelerating Local Economic Development

13. THANK YOU Together accelerating Local Economic Development