Managing Local Economic Development (LED) in Kwazulu Natal


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South African president Thabo Mbeki recently has said that there were two economies in this country, existing side by side and not intersecting: a first and a second economy. The first economy is first-world and comprises sophisticated businesses with well-developed infrastructure and markets. The second economy exists on the fringes of society with very little infrastructure and uncertain markets. This second economy is very vulnerable and fragile. There is also a huge economic gap between the high income earners and the low income earners. He said that it was imperative that these two economies be brought closer together.

The Gijima KZN LED Support programme has been specifically designed to support projects that could assist disadvantaged people to improve their lives through economic activity. It provides access to an ambitious European Union fund that has been specifically set up for this purpose. Part of the goal is also to create a better environment for economic growth, and this means developing the capacity and skills base of local municipalities so that a climate is created for local economic development. Its overarching purpose is to make the second economy less vulnerable to the vagaries of business.


  • Promoting pro-poor local economic development
  • Building the capacity of local government in managing local economic development
  • Increasing local competitiveness through the building of partnerships

Funding Application Process

The application process will be is preceded by a major awareness campaign to ensure knowledge of the BEF and LCF funds within provincial and local governments, and the private sector within KwaZulu-Natal.

For both funds there will be is a local call for project proposals using the KwaZulu-Natal media. Potential applicants will be provided with the Guidelines for Applicants (which will include an Application Form and other supporting documentation), explaining the purpose of the funds, the rules regarding the eligibility of applicants and partners, the types of actions and costs which are eligible for financing, and the evaluation criteria.

Potential applicants will be given information on the evaluation process that will follow (including an indicative timetable) and on the contractual conditions which will apply to selected projects. Technical assistance from the Gijima KZN team PCU will has stimulated the submission of applications.

Once received, the applications will undergo a technical and administrative assessment and a full evaluation by a committee which is independent of the PCU and appointed by the DED and ECD. If approved, a contract will be entered into between the Contracting Authority and the applicant.


The following are indicative allocations to the various components of the program:

Business Enabling Fund € 3,7 mn R 29,6 mn
Local Competitiveness Fund € 13,7 mn R109,6 mn
Networking & Co-operation Funding € 3,7 mn R29,6 mn
Interim Workplan 1 (Nov 03 –Oct 04) € 1,2 mn R9,6 mn
PCU and Technical Assistance € 13,2 mn R105,6 mn
Contingency € 1,5 mn R12 mn
TOTAL €37 mn R296 mn

(€/Rand exchange rate at time of allocation:€1 = R8-00)

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  • Last Update:22 Sep 2020
Copyright gijima KZN 2006