The role of governance within South Africa's state-owned enterprises: a case study of ESKOM

Abstract

The focus of this study is to evaluate the effects of local economic development (LED) in poverty alleviation in municipalities using Lepelle-Nkumpi Local Municipality as a case study. LED is essential as it involves identifying and using primarily local resources and skills to ensure or stimulate local economic growth and community development. Municipalities are responsible to ensure the promotion of LED projects to alleviate poverty. This study was motivated by fact that there is lack of promotion of LED projects, high rate of poverty and unemployment and other socio-economic related issues that is occurring in communities within Lepelle-Nkumpi Local Municipality. Although the Municipality is continuing with the implementation of LED strategies but high rate of poverty and unemployment persist. Lack of capacity, incorrect interpretation or implementation of LED and resource constrains are some of the factors that contribute to failure of LED implementation in municipalities even though they are policies or guidelines in place. The study adopted a qualitative research approach with the aim of interpreting and analysing the responses in thematic method. The data was obtained through semi- structured interviews from the identified municipal officials who are responsible for LED implementation, other municipal officials, economic development agency officials, project beneficiaries, community stakeholders and project leaders. The study used face-to-face interviews as a more natural way of interacting with the respondents. The purposive sampling was appropriate for this study, because the researcher wanted participants who have knowledge about the topic and who can give reliable information which will help to reach the objectives of the study. The study findings revealed LED implementation in Lepelle-Nkumpi Local Municipality is constraints by many factors which hinder it to achieving economic development and poverty alleviation. The Municipality have challenges such as lack of budget, political interference in the allocation of LED projects, double dipping of projects, dependency syndrome of LED projects, LED strategies do not address socio-economic challenges of communities, absence of monitoring and evaluation. Local economic development must contribute effectively on poverty alleviation and should have strong social focus.