Smme

SMMEs and local economic-base restructuring – a South African local government perspective

Introduction The support that the South African government provides for small, medium and micro enterprises (SMMEs) is widely acknowledged as the country’s effort towards economic restructuring and poverty alleviation. This acknowledgement results from governments’ political and legislative commitment, through policy and strategy, to ensure that SMME development is viable. SMME development in local government typifies part of a local economic development (LED) strategy that aims to, among other priorities; achieve the local government’s constitutional mandate to promote economic development. This article asserts that SMME development plays a vital role in South Africa’s economic development – particularly in the restructuring of the economic-base of local municipalities.

Since municipalities are entities of local government, any restructuring effort undertaken in respect of them will affect the character of local government in its entirety. A qualitative research method that is premised on a comparative analysis of SMME development and spatial features in towns and townships are used as the basis for the conclusions arrived at in the article. This article proposes an SMME development intervention to restructure and consolidate the economic-base of townships, in particular to transform the South African local government. Despite referring to local government in general, the scope of this article is limited to category B (local municipalities), which consists divided of towns and townships. It anticipates influencing SMME policy interventions to foster local economic-base restructuring in them, without which South Africa’s local government transformation is unattainable. This article is premised on a public administration view, which asserts that support for SMMEs and economic restructuring are public services in which government plays a critical role.

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