S Mufamadi: National Conference on developing local economies

14 August 2006

Chairperson, Mr Dereck Powell
Members of Executive Councils (MECs)
Chairperson of the National House of Traditional Leaders, Khosi Kutama
Mayors and councillors here present
Municipal managers and other officials from over three spheres of
government
Esteemed guests
Ladies and gentlemen

We have been brought together to participate in an important undertaking � a
national conference whose theme is �Partnering to Build a Sustainable Economy
for All�. We approach this task fully conscious of the fact that the crowning
point of this endeavour has to be the laying of a firm basis for civic
reflection and discussion on how best each one of us, individually and
severally, can contribute to the process of making our country a more
prosperous and happier place to live in.

The times in which we live call for the harnessing of a dynamic public
opinion to the government led task of setting our country on the path of
sustainable development. All of you therefore, were invited to this conference
on the presumption that from your respective vantage point, you have something
of value, to contribute.

The partnerships which are the subject of our contemplation are of two
kinds: the first set of partnerships involves effective intergovernmental
co-ordination, and the second one is about co-ordination between government and
social partners. In this regard, it bears emphasis that Local Economic
Development (LED) is not about local government per se, rather, it is about
what the entirety of government does in local spaces. In other words, out
collective efforts must be directed towards ensuring optimisation of
intergovernmental impact on every part of our space economy.

As we are all well aware, prior to 1994, our country was amongst those which
had a very poor record of economic growth over a long period of time. In
addition to the problem of stagnant or declining growth, the opportunity
structure which prevailed then was shaped by systematic arrangements and
processes that confined some places and people to a condition of
underdevelopment. The racial inequality and the legacy of spatial exclusion
survived the demise of apartheid. Our conception of the �Strategic Way Forward�
therefore, takes its point of departure in the reality that putting our economy
on a higher growth trajectory is an indispensable condition for the realisation
of the goal of a better life for all.

This conference was visualised as an integral part of our �Plan to Make
Government Work Better�. It forms part of the action steps which are contained
in our �Five-Year Local Government Implementation Plan�. In terms of the Plan,
this conference serves as an important backdrop to the Growth and Development
Summit (GDS) which must be held in all the 46 district municipalities and the 6
metropolitan municipalities by March 2007. The summits must, in turn, feed into
a process of ensuring that our next generation of municipal Integrated
Development Plans (IDPs) is more credible.

In order for our actions at local level to be meaningful and effective, we
need to develop a common understanding of the geography of our national
economy. It is for this reason that, in the context of trying to determine
local government�s contribution to the national task of pursuing a 6 percent
growth target, we are conducting a rigorous analysis of economic opportunities
and potentials of each of the districts and metropolitan municipalities. We are
intent on identifying interventions for skills developments according to the
make-up and potential for economic development, of each local area.

Ladies and gentlemen, it has indeed become a matter of mounting importance
that we sharpen the spatial focus of government programmes. The macro-framework
for this is already in place. The �National Spatial Development Perspective
(NSDP)� has been developed, and was recently updated, with a view to guide us
as we seek to direct growth-inducing investment in a co-ordinated and
spatially-targeted way.

This has implications not only with respect to attracting private sector
investments into prioritised geographic spaces, but also with respect to social
provision of sustainable modes of living to people who were previously
marginalised. This means that as a government, we must keep a close watch on
our fiscal interventions and the distributional dynamics which are unleashed by
these interventions. The test is whether our fiscal interventions, include the
way we distribute nationally-raised revenue to local jurisdictions, serve to
buttress existing inequalities or they help hitherto marginalised geographic
spaces to overcome their inheritance of disadvantage.

I am confident that we are making progress in this regard. For instance,
appreciable progress was recorded with respect to improving our capacity to
plan, manage and monitor infrastructure investment and the provision of
municipal services. In 2005/2006, we set aside R5,4 billion for the Municipal
Infrastructure Grant (MIG). By the end of March 2006, the entire amount had
been transferred to municipalities, and the municipalities were able to realise
a 72 percent spending rate on municipal infrastructure.

The experience of working together with municipalities has given us better
insights as to the impediments which stand in the way of rapid progress, and we
now have a better idea of what we should do together to remove those blockages.
The trends therefore, firmly support the prognosis of an accelerated and shared
growth.

For the participants who come from different spheres of government, the
central message we hope you will take away from this conference is that the
entirety of government must respond to the challenge of growing our economy
within the context of some coherent national framework. That framework must
help us achieve the necessary synergies between the NSDP, the Provincial Growth
and Development Strategies (PGDs), as well as the Integrated Development Plans
(IDPs).

It is indeed my pleasure to announce that we intend to avail to you, the
draft National Framework for LED as well as the draft LED Toolkit for your
considered comment. I also take this opportunity to express our heartfelt
appreciation to the European Union and the Deutsche Gesellschaft fur Technische
Zusammenarbeit (GTZ) for the contribution they made towards helping us
establish the LED Research Facility which will be housed at the Department of
Provincial and Local Government. The research facility will focus on tracking
trends, data and information on all municipal economies.

What is clear therefore, is that this conference is part of a continuum of
initiatives whose purpose it is to find more creative ways of optimising the
impact of our developmental endeavours. I hope that the conference will meet
the collective expectations of our people, namely that it will take us beyond
the current levels of developmental optimism.

I thank you for your readiness to rise up to the expectation.

Issued by: Department of Provincial and Local Government
14 August 2006
Source: Department of Provincial and Local Government (http://www.dplg.gov.za)