Abstract
Local economic development (LED) is a process encompassing mobilisation of resources for competitive advantage by locally-owned or managed courses of action, identified through participation and social dialogue, in a strategically defined territory. LED based on sound business principles can contribute to economic growth, job creation and poverty alleviation. The South African Constitution mandates LED to municipalities. Agriculture remains one of the most labour-intensive goods-production sectors with substantial employment linkages. The study centres on whether agriculture can provide an effective strategy for LED in uMshwathi Local Municipality, District Municipality of uMgungundlovu, KwaZulu-Natal, using the research method of the case study and secondary data. LED theories applied embody the principle of value-adding risk management. Locational development-inducing factors and high potential agricultural land for smallholder and organic farming provide comparative and competitive advantage. Agriculture’s significant role to accelerate LED in uMshwathi is confirmed. A grand strategy and functional strategies are proposed.
Highlights
There is consensus that the focal point of South Africa’s growth is the creation of employment that leads to comprehensive economic advancement and is the means to more rapid poverty reduction and income redistribution (National Planning Commission (NPC), 2012)
The critical research question in respect of the uMshwathi Local Municipality (ULM), situated within the uMgungundlovu District Municipality (UMDM), Province of KwaZulu-Natal (KZN), is whether agriculture can provide an effective strategy for local economic development (LED). uMshwathi, characterised by poor infrastructure and service delivery backlogs, is susceptible to poor growth and underdevelopment, and attempts to stimulate LED will be limited by capacity constraints
The framework/context suggested by Hindson and Vicente (2005) is that LED should be based on an understanding of regionalisation as it occurs within South African localities, and that it design measures and actions that respond to the opportunities and threats this provides
Summary
There is consensus that the focal point of South Africa’s growth is the creation of employment that leads to comprehensive economic advancement and is the means to more rapid poverty reduction and income redistribution (National Planning Commission (NPC), 2012). South Africans have an opportunity to forge a broad-based ‘social compact’, a shared social and economic vision, aimed at facilitating effective partnerships between government, business, labour, communities and civil society in pursuit of common goals, and a ‘peoples’ contract’ among citizens, as persuasively articulated in both the New Growth Path (NGP) and the National Development Plan (NDP). Municipalities, as a result of their constitutional mandate, are at the forefront in dealing with development backlogs, unemployment and poverty, and it is indispensable that the growth prospects of uMshwathi and its residents be maximised. The theoretical frameworks applied in the case study can be deemed value-creation risk management processes, as they contain elements of both a risk analysis framework (Roberts, 2011) and that of a holistic risk management approach by key social systems (World Bank, 2013)
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