The role of local economic development in poverty alleviation : the case of Sicelo, Midvaal local municipality

Abstract

The role of Local Economic Development (LED) in poverty alleviation has been a point of debate over the last decade or so. Half of the households in South Africa survive on less than R20 per day. Up to 60% of these households live in rural areas. Poverty alleviation and LED are interlinked concepts and are relatively new in South Africa. Limited success has been achieved through various projects but no real impact has been made to uplift or improve the poverty issues. Sicelo is an informal settlement within the Midvaal Local Municipal area. Extreme poverty also exists in this township of approximately 1998 households. During the empirical part (Chapter 4) of this study a survey was done within Sicelo to determine where the problem areas and shortcomings exist. Certain socio-economic indicators and statistics were gathered. The literature part of this study focuses on background information, Strategies and policies regarding LED and poverty alleviation. Certain municipalities were investigated and case studies were reviewed. Lastly, and most importantly the results from the Sicelo survey was used to compile a strategy and best practice to uplift the Sicelo community and pull them out of the grip of poverty. Some of the recommendations in this study include focusing on better management and planning when it comes to LED projects. LED strategies and projects should be outcome based and should focus on its main aims of job creation, poverty alleviation, economic growth and skills development. Because poverty varies from area to area it is important to remember that LED projects must also be linked to the magnitude of poverty. Thus, the success of any LED project depends on the correct allocation of resources such as skills training, funding and management.