Local Economic Development

LED is a complex process which needs the active involvement of a wide variety of stakeholders. In order to bring these stakeholders together in a meaningful and effective way, it is important to have a clear concept of the different actors and their roles to play in such a process.

LED stakeholders:

  • Public sector

Government influences LED in numerous ways. They can act as useful catalysts for LED. Similarly, rules and regulations designed at different tiers of government can reduce or increase the costs of doing business at local level. Local Government provides infrastructure  as well as coordination and facilitation to the other LED actors in order to create an enabling environment, or fails to do so if it is characterized by a lack of capacity.

  • Private sector

Well-functioning bodies of private sector organisation and representation, which offer services, lobbying and mutual exchange.
The lack of effective representation prevents the private sector from becoming a powerful partner and counterpart for the public sector and to properly advocate its common interests in the LED process. It further produces communication barriers within the private sector that prevent the optimal use of synergies such as mutual learning and information exchange between businesses, which tend to specifically exclude and disadvantage the emerging entrepreneurial community. 
Functioning and inclusive private sector institutions are therefore a vital success factor for dynamic LED processes in South Africa, and strengthening the capacity of these institutions is an important element of LED initiatives.

  • Civil society

The degree to which the interests of poor communities, emerging entrepreneurs and wage labourers are taken into consideration by private and public institutions is often limited. There is little information about the specific needs, demands and potentials of poor communities and emerging entrepreneurs.
Local non-governmental organisations (NGOs) and civil society initiatives are an important element in strengthening these communities; they can assist communities in organising themselves. These institutions are often badly equipped in terms of human and financial resources, and might themselves need organisational support from LED facilitators.

  • Intermediary institutions

 In the context of South Africa, the most important LED intermediaries include:

  • The Development Bank of Southern Africa (DBSA), which provides conceptual input to the LED debate in South Africa and provides funding for the design and implementation of LED processes along its conceptual inputs
  • The South African Local Government Association (SALGA), which provides advocacy, conceptual and facilitation support on LED to Local Governments
  • District LED units or parastatal LED agencies, which play an active part in steering and implementing LED on the ground
  • Training institutions such as colleges and universities or parastatal institutions, which are key actors in research; the development of LED concepts and the capacity building around these concepts
  • Private sector LED experts and facilitators, which offer their expertise in terms of LED concept development, LED facilitation and LED training