Examining the impact of local government in promoting local economic development: the case study of Winnie Madikizela Mandela Local Municipality.

Abstract

Local Economic Development (LED) has emerged as a critical strategy for addressing persistent socio-economic challenges such as unemployment, poverty, and inequality in South Africa. Since the advent of democracy in 1994, municipalities have been constitutionally mandated to drive LED as part of their development role and create inclusive local economies that promote both social and economic well-being. The main aim of this dissertation was to evaluate the overall impact of local government on promoting Local Economic Development in South Africa, using the Winnie Madikizela Mandela Local Municipality (WMMLM) as the case study. This research adopted a qualitative research approach, and the researcher employed the thematic analysis technique to analyse the collected data. The study aimed to interview sixteen participants, comprising eight Local Economic Development staff members from Winnie Madikizela Mandela Local Municipality and eight business community members within the WMMLM area. However, due to participant unavailability, in-depth interviews were conducted with fourteen participants. Participants were selected using purposive and snowball sampling techniques. The study was grounded in Community Development Theory, which provided a relevant framework for understanding the role of local government in facilitating local economic development. The findings indicated that WMMLM had established LED initiatives; however, several structural and operational challenges continued to limit their effectiveness. Although LED initiatives showed some positive impact on business growth, poor implementation, inadequate monitoring, weak alignment with local economic needs, unequal resource distribution, and budget constraints reduced their overall impact. These financial limitations also restricted the municipality’s ability to respond to economic shocks and emergencies. The study recommended strengthening institutional capacity, enhancing participatory governance, adopting context-sensitive LED strategies, and exploring diversified funding sources to maximise LED outcomes. The study contributed to knowledge on local economic development in South Africa and provided useful insights for policymakers and local government. However, as the study focused only on business community members within WMMLM, the findings could not be generalised to all municipalities, though they offered valuable insight into the realities faced by small municipalities.