The role of local economic development in building capacity and growth for small, medium and micro enterprises in Sedibeng District Municipality

Abstract

South Africa as a developing country experienced high levels of poverty and unemployment. These levels emanate from skills gap and low literacy rate in the townships populated by low income households. To an extent some households lacked access to participate in the economic sector, resulting from fragmented policies and apartheid regime. The lack of participation among the households placed pressure on government. These problems forced the state to provide social protection (grants). Such allowances are expensive especially where there are fewer opportunities for employment activities. The promotion of entrepreneurship and small business remains an important priority of the government of South Africa. The South African government is acknowledged for its commitments to ensure that small businesses progressively contribute to growth and performance of the South African economy. Globally, numerous policy legislative frameworks have been developed to support the SMMEs. This study aimed to discover the support given to the SMMEs by the South African government. In particular, the study is situated within the SMMEs in the SDM. The hypothesis for this study is premised on the fact that SMME`s can contribute immensely to job creation. The outcomes of this argument relies on the provisions based on a conducive environment which can enable the SMME`s to thrive. This statement was validated by means of literature review, interviews and site visits. This study found that the SMMEs are indeed the cornerstone of job creation and for sustainable livelihoods. LED programmes can create more jobs through the SMME sector. Literature worldwide confirms that the SMMEs are vital in creating employment opportunities. This research also confirmed that this is possible only if the environment in which SMMEs operate in is favourable for the SMMEs to prosper. In this regard many policy documents were developed to emphasize the stance of government to develop, grow and capacitate SMMEs in South Africa. It is indeed true that the LED can be used to grow and capacitate SMMEs in South Africa. Despite the progress being made on the development of the SMMEs, few issues need to be taken care off. The municipality indicated that there are no monitoring procedures in place which make it difficult to measure the infectiveness of their interventions and they further pointed out that they are working on the matter. The measurement of these milestones is not properly recorded to inform future generations. It is suggested that more research should be emphasised on the SMME sector, especially being the mandate of the municipality.