IMPACT OF LOCAL ECONOMIC DEVELOPMENT PROGRAMMES ON LIVELIHOOD: EVIDENCE FROM MPUMALANGA, SOUTH AFRICA

Ogujiuba Kanayo,Portia Ndlovu,Isaac Agholor

doi:10.32479/ijefi.11589

Abstract

Extraordinary levels of unemployment, poverty and inequality perseveres in South Africa, which in itself is a risk for economic development. Initiatives such as Local Economic Development (LED), globally acknowledged, have been adopted to solve the crisis. LED in its simplest practice is about local people uniting to achieve a better quality of life. Nevertheless, effects of LED are still contentious in developing economies and especially South Africa because of the increased level of poverty amongst supposed beneficiaries of LED. This article evaluates the impact of a LED initiative (EPWP) on reducing the triple challenges facing South Africa. A mixed method approach and a paired-sample t-test was performed to determine the effect of LED. Between time 1[M=17.91, SD=2.68] to time 2[M=20.06, SD=3.43, t(44)=5.1429, p<.0005], there was a statistically significant increase in EPWP ratings by participants. The statistic of eta squared (.375) showed a large effect size. EPWP has generated income and increased skills showing a change in some areas, because of the programme. Qualitative findings indicate that LED evidently has a role to play concerning poverty and unemployment relief, but the initiative is not enough. This article recommends the establishment of projects, which will provide sufficient livelihood for local beneficiaries, which will facilitate local participation.Keywords: EPWP, LED, Livelihood, PovertyJEL Classifications: O20, O21, O38DOI: https://doi.org/10.32479/ijefi.11589

Highlights

Poverty is considered the most significant detraction of human development as well as inequality and unemployment
Each community has a unique set of local conditions that either enhance or reduce the potential for Local Economic Development, and it is the conditions that determine the relative advantage of an area in its ability to attract generate and retain investment
This article indicates that lack of motivation, lack of involvement, few Local Economic Development (LED) initiatives, poor provision of services and population growths are some of the challenges hindering the implementation of LED

Summary

Introduction

Poverty is considered the most significant detraction of human development as well as inequality and unemployment. The UNDP Human Report (2003) posits that apartheid exclusion factors continue to affect South Africa’s economy, such as concentration of wealth in a few hands, broad income inequality leading to low income growth. These factors continue to worsen the main challenges of inequality, unemployment, and poverty in South Africa. Local Economic Development aims to create jobs by making the local economy grow. This suggests that more businesses would be established in the municipal area. Key stakeholders in a municipality are expected to come together, reach an arrangement and make choices that would propel their economy as well as creating income opportunities for more people, especially the poor

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