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Case Study prepared for the World Bank-Netherlands Partnership Program Evaluating and Disseminating Experiences in Local Economic Development (LED) Investigation of Pro-Poor LED in South Africa, 2005.

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EKURHULENI: TOWARDS A LOCAL INDUSTRIAL POLICY FOR DRIVING PRO-POOR GROWTH AND A PEOPLE-CENTRED ECONOMY Christian M. Rogerson

1. Introduction The metropolitan municipality of Ekurhuleni is based upon what historically has

been known as the East and/or Far East Rand. Unlike other metropolitan

municipalities it does not represent the extension of an existing city but instead

represents the amalgamation of several long-established towns (Machaka and

Roberts, 2004). The five East Rand towns of Alberton, Benoni, Boksburg

Germiston and Kempton Park have been merged with the three Far East Rand

towns of Brakpan, Nigel and Springs. According to SACN data (2004) the

combined Ekurhuleni currently is the fourth most populace of South Africa’s six

metropolitan municipalities. Although a separate municipality, Ekurhuleni is

functionally part of a much larger urban-economic system that spans nearly all of

Gauteng and beyond. Together with Johannesburg, Tshwane (Pretoria), Mogale

City (Krugersdorp) and Emfuleni (Vanderbijlpark-Vereeniging), Ekurhuleni is an

integral part of a “virtually continuous urban ‘extent’ of 8.6 million people” (SACN,

2004, p. 24). Ekurhuleni is distinguished by the fact that within its boundaries,

population growth has been expanding at an annual average rate of 4.12 percent

which is the highest growth rate recorded of all the six South African metropolitan

municipalities (SACN, 2004). Equally significant is that Ekurhuleni is marked by

higher unemployment rates than those recorded in other major urban centres;

based upon 2000 census data the unemployment rate in Ekurhuleni was 40

percent (ANC Gauteng Province, 2004, p. 58).

Ekurhuleni encompasses what is claimed to be “the largest concentration of

industrial activity in South Africa, and in sub-Saharan Africa” (Machaka and

Roberts, 2004, p. 2). Indeed, the former East Rand has been described variously


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as South Africa’s ‘national industrial workshop’, ‘the workshop of Africa’ or as

‘South Africa’s Ruhr’ (Bloch, 1993; Centre for Development and Enterprise, 1997;

Machaka and Roberts, 2004). Historically, the region existed as “a bastion of the

mining industry” prior its emergence during the 1970s as the national industrial

heartland (Nieftagodien, 2004, p. 2). The industrial base of the region benefited

enormously from the apartheid economic boom period of the 1960s, including the

growth of military production which was heavily concentrated in the East Rand.

From the mid-1970s, however, the manufacturing economy entered a phase of

protracted decline. Triggered by decline in mining, a major downtown in the local

manufacturing economy occurred from the mid-1980s with a hollowing out of the

industrial base resulting in the loss of a total almost 100 000 jobs between 1989-

99 (Rogerson and Rogerson, 1997, 1999; Rogerson, 2000, 2004).

Despite this bleeding of manufacturing employment, the SACN (2004) study

confirms that manufacturing still remains the core of Ekurhuleni’s formal sector

economic activity. Indeed, there is evidence that since 1996 there has been a

turnaround in the fortunes of the local manufacturing economy with a recorded

increase of 30 000 new manufacturing jobs between 1996-2001, an increase of

26 percent (ANC Gauteng Province, 2004, p. 7) As indexed by the total gross

value added by key economic sectors, the three leading drivers of the Ekurhuleni

economy are manufacturing (28.8 percent), financial, insurance, real estate and

business services (20.9 percent), and community, social and personal services

(13.5 percent). Three large sub-sectors account for nearly two-thirds of value-

added (2002) in the critical local manufacturing sector (Pogue and Maharajh,

2004, p. 13). These three essential sub-sectors of Ekurhuleni’s manufacturing

economic base are metal products, machinery and household appliances (34.2

percent), fuel, petroleum, chemicals and rubber products (20.2 percent), and

food, beverages and tobacco products (10.5 percent). Of significance is that

gold-mining, which Nieftagodien (2004, p. 3) observes “contributed hugely to the

initial transformation of the East Rand from a sparsely populated and


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undeveloped region into one of the country’s leading economic zones”, has been

reduced to the point that by 2002 it contributes only 1.8 percent to total gross

value added.

Against this brief background portrait of the historical economic development of

Ekurhuleni, the objective in this paper is to present an analysis of the current

state of local economic development practice and policy. Methodologically, this is

a desk-top study which draws necessarily upon both primary and secondary

sources relating to LED in Ekurhuleni1. In the first section of this report, an

attempt is made to provide a picture of the broad LED vision and strategy as put

forth in official LED statements approved by the Ekurhuleni municipality. It is

argued that this ‘people-centred’ approach is viewed in policy rhetoric as

embodying a strong pro-poor focus. The absence is noted, however, of a clear

and focussed economic strategy for driving the agreed LED vision of creating “an

inclusive wealth generating local economy” (Ekurhuleni Municipality, 2003a).

Accordingly, in the second section, attention shifts to review the key dimensions

of an analysis of the competitiveness of the Ekurhuleni local economy. This

strategic economic analysis offers an alternative “local economic development

model to effectively implement an industrial policy for broad-based industrial

development and employment creation” (Machaka and Roberts, 2004, p. 2). It

will be argued that within this second stream of writings on LED in Ekurhuleni

there are embodied several potentially important ‘lessons’ or ‘best practices’ for

evolving local pro-poor growth strategies in South Africa.

2. Towards a People-Centred Economy

1 As of end-2004 the Ekurhuleni municipality had not responded to and completed the survey questionnaire for the World Bank-Netherlands Partnership Program. It was the only one of the six metropolitan municipalities that failed to respond.


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The Ekurhuleni official policy, strategy and implementation framework for LED

was presented for adoption to the Council in 2003. There are three components

to the documentation. The first is the Ekurhuleni Local Economic Development

Policy (Ekurhuleni Municipality 2003b), the second is the Ekurhuleni Economic

Strategy (Ekhuruleni Municipality, 2003c) and, the third is the LED Policy and

Strategy Implementation Framework (Ekhuruleni Municipality 2003a). In this

section the key themes as represented in these official policy statements are

reviewed and analysed. The overriding theme is developing ‘a people-centred

economy’, a theme which derives from the title of the earlier documentation on

LED policy that was drafted in 2002 (COPAC, 2002)

As stated earlier, the LED vision for Ekurhuleni is viewed as that of creating an

“inclusive wealth-generating economy” with the LED mission statement given as

“To facilitate a conducive environment where all can participate in a wealth

generating local economy by focusing on economic growth, empowerment and

transformation” (Ekurhuleni Municipality 2003a). The municipal local economic

development policy reflects the strong imprint of the Reconstruction and

Development Policy with several long quotations presented from the RDP

document to justify the directions offered for LED.

The LED policy framework for economic empowerment and transformation is

explicitly pro-poor in every respect. Ten policy thrusts are identified which are

based upon eight so-termed ‘development principles’. These are listed in Tables

1 and Table 2. Together Tables 1 and 2 encapsulate the key components of

Ekurhuleni’s LED Policy.

Table 1: Key Features of Ekurhuleni’s LED Policy (Source: Ekurhuleni Municipality, 2003b)


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POLICY THRUST KEY OBJECTIVES INTERVENTIONS

Local Production for Local Need

*Create and facilitate an

environment within which people

are able to achieve sustainable

livelihoods

*Assist individuals and

communities to increase income

and wealth

* Facilitate production projects to

eradicate poverty

* Increase local production to

meet local needs and eradicate

food security

* Facilitate conditions at local

level to ensure sustainable LED

* Set up industrial hives

*Promote SMMEs and

micro-enterprises

*Facilitate the participation

of women in local

production and services

*Stimulate and encourage

beneficiation of local

mineral and manufactured

products

*Develop and sustain all

economic sectors

A Cooperative Movement to Represent Community-Based Interventions in the Local Economy

*Create and facilitate

mechanisms for sustainable

livelihoods to be achieved

* Promote Asset formation and

asset management amongst the

poor and marginalized

*Realise BEE

*Provide the environment for

skills development, skills

acquisition and diversification of

skills

*Provide a voice to organised

groups in the policy process

* Link the marginalised with the

mainstream economy

*Develop the socialised third

sector

* Set up ongoing linkages

with community

organisations involved in

economic activity

*Facilitate the involvement

of communities in all

economic programmes of

the metro

*Encourage the initiation

and continued

development of coops

*Investigate the potential

to set up municipal worker

coops on key service

delivery channels

*Develop linkages with

national and provincial

programmes to facilitate

access to financed,

information and marketing


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of products

*Review local legislation to

include coops.

A Skills Development Network

*Enhance the access of local

people (employed and

unemployed) to acquire skills

development and increase the

skills base through diversification

of skills

*Provide training, mentoring and

support for the developing

economic enterprises

*Create a system that can

respond to plant closures and

industrial decline such that

workers are given the option of

training to enable self-

employment or a smooth

transition into new employment

*Organise the supply side of the

labour market to meet demand.

*Facilitate the linkages

between the local skills

development needs and

the national and provincial

programmes

*Develop a skills

development network

comprising all training

institutions to consolidate

the capacity at local level

and to align vocational

training and skills

development to the needs

of the local economy

* Facilitate the supply of

labour for projects and

service delivery

programmes of the metro

through organizing the

unemployed into skills and

technology coops.

Develop and sustain urban and commercial agriculture to build food security

*Eradicate food insecurity and

poverty

*Ensure sustainable land use

*Promote sustainable livelihoods

*Ensure that land in the

Metro is accessible to

residents interested in

carrying out agricultural

activity

*Facilitate urban

agricultural friendly

legislation

*Facilitate linkages to

finance, information and


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production methods with

national and provincial

government.

*Encourage organic

farming

*Support the development

of fresh produce markets

in local communities to

ensure that agricultural

produce can be sold

cheaply

*Facilitate linkages to

export markets

*Increase the efficiency

and broaden the base of

access and ownership of

the municipal market

Promote Waste Recycling and Reusable Energy

*Create Sustainable communities

*Assist poor households bring

down energy consumption costs

*Provide alternative sources of

energy

*Create sustainable livelihoods

*Contribute to local production for

local need

*Stimulate approaches to

value added waste

processing

*Encourage the use of

renewable energy through

establishing coops

*Encourage the

establishment of

renewable energy coops

Build Local Development Capital

*Increase the savings base of

local communities

*Provide safe and secure

institutions in which people can

save and borrow money to meet

their development needs

*Build a pool of finance to support

self-reliant development in local

*Encourage local savings

in communities

*Facilitate access to

finance

*Set up a co-operative

bank for development

projects to save and

access small loans


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communities

*Create institutions that can

house technical experts for co-

operative development and

expansion.

*Set up a local LED fund

with local businesses to

support local development

Ensure Participatory and Integrated Planning

* Mainstream the IDP process in

local governance

* Limit the technocratic and top

down approach to development

*Develop a system of

participatory budgeting

*Give communities control over

development

*Decentralise resources and

power in the development

process

*Strengthen the

public/Community partnership for

development

*Develop a sound base of

information on the regional

economy and data on the impact

of LED projects and policies

* Design and foster an IDP

process that plans LED

and fosters participatory

budgeting

* Ensure that needs,

priorities and resources

are planned for

* Empower and capacitate

participants in the process

Maintain linkages with the industrial base

*Contribute to the formation of

development capital in ‘township

economies’

*Assist and enable skills transfer

and reskilling

*Foster local entrepreneurship

*Reduce factor costs for

industries

*Promote job retention within

existing industries.

*Facilitate, engage and

negotiate with local

businesses about their role

and contribution to overall

LED strategy

*Devise strategies for each

sector of the economy

*Ensure that local

businesses are lead (sic)

and positioned within the


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LED development strategy

to make commitments to a

common vision for the

regional economy

*Facilitate the

implementation of national

government trade

incentives

*Create opportunities for

local businesses to make

contributions to loan

guarantee funds, venture

capital for SMMEs, skills

development programs,

mentoring programs and

incubation facilities for

grassroots entrepreneurs.

Facilitate and Grow SMMEs *Promote black economic

empowerment

*Develop a support environment

for SMMEs

* Establish linkages between

existing big businesses and

emergent enterprises

*Create jobs

*Contribute to poverty eradication

*Provide women, youth and

disabled with entrepreneurial

skills

*Develop linkages wit

national programmes of

DTI, Ntsika and Khula on

finance and information.

*Facilitate a local SMME

council

*Supply information about

business opportunities

*Provide one-stop centres

to deal with technical

advice and support

*Set up incubators to

assist emergent

entrepreneurs to establish

their enterprises

*Support the growth of

informal traders into small


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businesses

*Provide infrastructure,

technical support and

business advice and

access to finance to

informal traders

Affirm Local Procurement * Promote BEE

* Support SMEs and other forms

of collective enterprise

*Contribute to state-led economic

transformation

*Allocate resources to the

township economy

*Build resources and capacities in

previously disadvantaged

communities.

*Promote a local buy ethic

*Ensure transparency in

the Metro procurement

process

*Establish and implement

a percentage quota for

start-up businesses

*Ensure that procurement

procedures are friendly

and accessible to locals,

coops and SMMEs

The above ten policy thrusts are underpinned by the eight development

principles which are shown on Table 2.


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Table 2: Development Principles of Ekurhuleni’s LED Policy (Source:

Ekurhuleni Municipality 2003b).

DEVELOPMENT PRINCIPLE

1. A People Focus – Putting the Poor First

2. Recognition of the Differences Between Communities

3.Recognition of the holistic nature of people’s lives

4. Linking the micro with the macro

5. Accessible Institutions and processes

6. Mainstreaming the environment within the holistic approach

7. State-led partnership approaches between communities, labour and the

private sector.

8. Learning to listen

Overall, it is evident from Tables 1 and 2 that there is an over-riding pro-poor

focus in the LED Policy of Ekurhuleni. The key underpinning development

principle of “putting the poor first” is reflected directly in many of the policy thrusts

for creating a people-centred economy, not least the heavy emphasis accorded

to self-reliance, BEE, disadvantaged groups, the empowerment of women, youth,

the development of co-ops and the socialised third sector.

The Ekurhuleni Economic Strategy represents the second component of the

local economic development framework. It is argued that whilst the LED

framework “addresses interventions to close the poverty gap, the economic

strategy “points to how the Metro could organize itself and all its services to

realize improved service delivery and capacitation in the economy” (Ekurhuleni

Municipality 2003c). This focus derives from the belief that “the local

government’s ability to act in the economic arena is limited” (Ekurhuleni

Municipality 2003c) and that the “principal role of the Municipality in sustaining


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the economy is to provide core infrastructure for day-to-day economic activity”.

More specifically, the core infrastructure in terms of provision of electricity, water

management and waste disposal is viewed as “the backbone of the economy”

(Ekurhuleni Municipality 2003c) and it is re-stated that “the municipality’s core

business is the provision of services” (Ekurhuleni Municipality 2003c).

Beyond infrastructure, it is asserted that another key dimension to growing the

local economy is “developing an integrated approach where the Metropolitan

area is consolidated into one economic region, taking into account all the

imbalances and inequities in wealth, skills and access to infrastructure”

(Ekurhuleni Municipality 2003c). The absence of any economic analysis in the

economic strategy is brushed side in the sweeping belief that “the market-led

economy will continue to grow” and re-assertion that local government’s role is to

“restructure itself to play the leading role in facilitating the implementation of

national programs on economic development, in particular Black Economic

Empowerment, Co-operative forms of ownership, and the economic

empowerment of women”.

A number of strategic interventions are proposed in order to realise the economic

strategy with the major targets of interventions being “to create jobs in small and

micro enterprises and in cooperatives”; to diversify the economy by providing for

local needs and to attempt to increase export revenue, as well as to provide

ownership opportunities for black people and women and the poor”. Nine sets of

strategic interventions are outlined.

1. A focus on administered pricing and tariffs to ensure wider affordability of

services

2. Ring-fencing of revenue from electricity, water, sewage and refuse removal to

ensure that surpluses improve the reach and range of these services


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3. Development Zones to be established to cover the entire region with no area

left out

4. Harnessing conditional grants for supporting infrastructure, public works, skills

development, transport and tourism

5. Mainstreaming the informal economy and women – it is argued that a “key

thrust in economic regeneration is the formalisation of informal businesses in

order to move them out of subsistence survival to production of adequate

surpluses”

6. Procurement needs to be local and in support of economic growth with set

targets to ensure 20 percent of all procurement is with start-up businesses.

7. Service levels to business and industry linked to retention plans – quality of

services provided to business and industry is to be “directly linked to the

willingness to remain in the region”.

8. Establishment of a register of all formal and informal businesses.

9. Developing and sustaining economic sectors

(a) Agriculture – support to build food security and restructure local state assets

in terms of the municipal fresh produce market in order to realise BEE.

(b) Mining – establish a mining forum and job creation projects to clean up the

environment, including developing profitable business opportunities through

recovering gold and other materials in surface revenue deposits

(c) Manufacturing – needs to be retained and supported/facilitated to become

more competitive in order to tackle the crucial problem of rising rates of

unemployment. The main role of local government is seen as “engaging with

industry to achieve its developmental objectives by anticipating interventions that

industry would make, gather information, analyse the strategic path of

manufacturing and coordinating activities and initiatives of institutions engaged in

industrial development”. Under the heading of the manufacturing support there is

also a focus on the upgrade and revitalisation of commercial areas in terms of

township infrastructure and support for skills development.


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(d) Services – this sector needs to respond to HIV-AIDS and care work and to

respond to the challenge of commercialising home skills such as cleaning,

catering and domestic skills as important linkages to tourism.

Finally, the LED Policy and Strategy Implementation framework provides detail

on Key Performance Areas for LED in Ekurhuleni (albeit no information on details

of monitoring) and on implementation mechanisms to reach objectives and

deliver KPAs (Ekurhuleni Municipality 2003a). The implementation mechanisms

focus on the establishment of sets of internal inter-departmental forums and

external sectoral programmes to involve other stakeholders, such as the private

sector. Table 3 lists the KPAs as indicated in the municipal policy and strategy

implementation framework.

Table 3: KPAs for Ekurhuleni LED (Source: Ekurhuleni Municipality 2003a)

Key Performance Area Issues for Monitoring

Provide economic friendly municipal

procedures and regulations

* Facilitate review and development of

economic activity friendly by-laws

* Provide municipal procedures that promote

economic activity

Develop and sustain all economic sectors * Facilitate the regeneration of the

manufacturing sector and other sectors

* Monitor the growth of tourism and the

linkages to the sector

* Facilitate the growth of agriculture

* Facilitate the development and growth of the

IT sector

* Monitor the performance of various sectors

* Facilitate the reskilling of the labour force

* Facilitate the regeneration of industrial areas

and CBDs and upgrade of residential areas

*Input into the spatial plan


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Key Performance Area Issues for Monitoring

Mainstream all economic activity into the formal

economy

*Facilitate the acquisition of economic skills

*Facilitate the utilisation of coops in the

municipality’s procurement system

* Facilitate the growth and contribution of

SMMEs

Align procurement processes for economic

development

*Monitor the implementation of the preferential

procurement policy to support economic

development

Promote and market investment for sustainable

job creation

*Develop investment incentives packages

*Market Ekurhuleni as a friendly investment

destination

Facilitate the growth of Co-operatives * Promote credit and savings unions

* Facilitate the development of financial

services co-ops

*Encourage the community to form coops

Assess the effectiveness and efficiencies of

Utilities

* Facilitate the review of all utilities

* Ensure revenue generation in utilities

* Monitor the efficiencies of utilities

In reviewing the Ekurhuleni policy framework for LED it is apparent that pro-poor

LED is explicitly viewed as the major focus of activity for local government. What

is entirely missing, however, is any economic driver for this LED strategy and

especially for the crucial manufacturing sector. Rather, the municipality sidesteps

this issue with the argument that provision of infrastructure is its core mandate

and the faith that “the market-led economy will continue to grow”. In the final

section of this report attention turns to a body of detailed work and analysis which

seeks to ensure that the market economy is sustained through the development

of a local industrial policy for Ekurhuleni.

3. Towards a Local Industrial Policy for Driving Pro-Poor Growth


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The process of seeking to refine a more nuanced economic strategy for

Ekurhuleni that addresses the metro’s core economic base – the manufacturing

sector – began in late 2002. It was aimed at “consulting with manufacturers with

respect to how local government can assist to improve productivity and bring

about economic growth as well as job creation” (Ekurhuleni Municipality 2003d).

During late 2002 the municipality’s LED department launched a study to assess

the economy and to devise a long-term economic sustainability strategy and in

2003 entered a partnership with the Corporate Strategy and Industrial

Development Research Project based at the School of Economic and Business

Sciences, University of the Witwatersrand in Johannesburg. Under this

partnership a series of studies were carried out to assess the performance of

firms as well as the strengths and weaknesses of various industries. The results

of this work have “informed the process of developing competitiveness in the

economy and increasing the rate of investment” (Ekurhuleni Municipality 2003d,

p. 1).

In terms of identifying best practice the methodology of the research is of

considerable significance. The analysis is anchored on understanding enterprise

competitiveness as based upon a range of factors which relate to firms

production processes, use of technologies, supply linkages and marketing and

distribution. The theoretical lens of the commodity or value chain framework is

applied in order to examine the progressive value addition from raw materials

through to finished products and the production capabilities and competitiveness

conditions at each stage. Value chain analysis highlights the importance of

linkages and raises questions of governance by firms at different levels in the

chain (Kaplinsky and Morris, 2002; McCormick and Schmitz, 2002).Issues of

governance further relate “To the organisation of inter-firm relations, including the

provision of common services, in the nature of business associations, and in

government’s industrial policy frameworks” (Macjaka and Roberts, 2004, p. 3).


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The approach of value chain analysis is seen as implicit within the national

Department of Trade and Industry’s (2002) industrial policy framework document

which stresses the importance of related activities, such as logistics, and speaks

in terms of the language of value matrices. Moreover, a significant role also is

specified for LED in the implementation of national industrial policy (Machaka

and Roberts, 2004). Overall, therefore, a significant contribution here is made in

terms of the framework used for interpreting and seeking to enhance

competitiveness and job creation within the Ekurhuleni local economy. It is

asserted that “Understanding the nature of industry within Ekurhuleni ultimately

creates an enabling environment in which local government can embrace its role

in facilitating local economic development” (Ekurhuleni Municipality, 2003d, p. 6).

In the adopted framework “local economic development and industrial policy can

be approached through understanding: firm production capabilities and

performance; firms strategies and decisions (such as around training); the nature

of inter-firm relationships; and the role of local government” (Machaka and

Roberts, 2004, p. 4).

The approach was applied through undertaking a detailed survey of

manufacturing firms in Ekurhuleni. In addition a series of sectoral studies were

pursued (Phele and Steuart, 2004; Roberts, 2004; Taka, 2004) which were

complemented by focussed issue investigations on procurement (Chabane,

2004) and innovation through technological change (Pogue and Maharajh, 2004).

Among the key findings, conclusions and recommendations that derived from this

survey were the following:

• The local economy is dominated by relatively labour-intensive rather than

capital-intensive industries. Historically, national industrial policy has

focussed on the strategic needs of the latter and neglected the

development of downstream manufacturing, which represents the

predominant local industrial base (Machaka and Roberts, 2004).


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• The existing local strengths to be built upon are in sectors or niches within

plastic products, foundries and mining machinery (Ekurhuleni Municipality,

2003d; Phel and Steuart, 2004; Taka, 2004).

• Employment growth and output are strongest in a group of dynamic or

successful firms, the majority of which were medium-sized (Ekurhuleni

Municipality, 2003d).

• Key features of successful firms include, inter alia, a tendency to export, to

focus on quality and delivery time for competitiveness, to invest in

improving their capabilities in terms of both upgrading machinery and

equipment as well as investing in training, accessing the national skills

development levy and using other government incentives, especially the

SMEDP (Ekurhuleni Municipality, 2003d).

• Education and skills levels in the local economy are of concern and skills

development is viewed a strategic priority. The most dynamic firms are

building production capabilities through training and are not held back by

the apartheid legacy of poor education levels (Machaka and Roberts,

2004).

• The core support requirements from local government are identified

(especially by better performing firms) as the improvement of public

transport (in order to allow split factory shifts) and more reliable public

services (especially uninterrupted electricity supplies) (Phele and Steuart,

2004; Roberts, 2004).

• The need for establishment of local technical centres under the Advanced

Manufacturing Strategy points to an important coordinating role to bring

together industry and relevant branches of government to identify suitable

locations (Taka, 2004). Technical centres would strengthen the local

capacity of enterprises to take international products and flexibly reverse

engineer them such that they are South African appropriate (Ekurhuleni

Municipality, 2003d)


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• The level of national government capital spending on infrastructure is a

critical determinant of the local economic health of especially the metal

products and machinery sectors (Roberts, 2004).

• For machinery and equipment firms a partnership needs to be coordinated

by local government to ensure coordination of national industrial policy

and the Mining Charter with plans for local sector and technology support

centres ((Ekurhuleni Municipality, 2003d).

• A critical challenge for local government is to provide appropriate

institutions to support firm learning, skills upgrading and technological

development (Machaka and Roberts, 2004).

• Specific support is required to nurture the existing sectoral strengths in

Ekurhuleni’s industrial economy with “interventions to support firm

capabilities, training and collective learning in these sectors, in conjunction

with the building of more coherent industry organisations” (Machaka and

Roberts, 2004, p. 17).

4. Concluding Remarks As a result of the historical context of the amalgamation of several separate

municipalities, currently institutional development at the metropolitan level is

weak across Ekurhuleni (Machaka and Roberts, 2004), more especially as

compared to South Africa’s other five metropolitan municipalities (SACN, 2004).

Nevertheless, LED policy development in Ekurhuleni is of considerable interest in

particular for its overwhelming pro-poor stance for the making of a people-

centred economy.

The major gaps and weaknesses of the proposed local economic strategy for

Ekurhuleni currently are being addressed through an important focus using a

value chain framework designed to unpack the obstacles and opportunities of

local enterprise performance. This approach is important in terms of generating


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the bases for developing a local industrial policy in Ekurhuleni which incorporates

the ‘new determinants of competitiveness’. The framework and value chain

approach as utilised in Ekurhuleni has been acknowledged by the national

Department of Trade and Industry as requiring that for restructuring or supporting

industrial agglomerations “three key platforms need to be in place, those for

developing skills, infrastructure and technology” (Zalk, 2004, p. 8). These critical

ingredients for a pro-poor growth strategy require “high quality institutions and

coordination of policy and implementation efforts, both at the level of the national

economy and at the sub-national level” (Zalk, 2004, p. 8).


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REFERENCES

ANC Gauteng Province, 2004: Understanding Gauteng’s Changing Economic,

Social and Political Landscape: Implications and challenges for the ANC-led

Democratic Movement during the Second Decade of Freedom, The Base

Document prepared for the 9th Provincial Conference.

Bloch, R., 1993: Regenerating the East Rand: Promoting growth and opportunity in

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EKURHULENI: TOWARDS A LOCAL INDUSTRIAL POLICY ... - World Banksiteresources.worldbank.org/INTLED/Resources/... · Case Study prepared for the World Bank-Netherlands Partnership Program