South Africa's cities are the places of opportunity that drive the bulk of economic growth. Many indicators, including job creation and revenue generation, have demonstrated the significant growth that has occurred in South African cities and the potential for further development. Despite the opportunities, however, these same cities often have concentrations of poverty. Therefore, it is critical to explore and share ideas on how to continue to grow the urban economy while ensuring that it translates into jobs and a better life for all urban residents.

The structural framework whereby South African cities can provide for local economic development (LED) strategies begins with the adoption of each city's integrated development plan (IDP), in which economic development is an integral function of the city's overall planning strategy. The IDP is mandated by the national Municipal Systems Act.

When the ICMA CityLinks program was initiated, there was widespread consensus that municipalities should be integrally involved in promoting economic development, but consolidations of jurisdictions and the expansion of local government authority and responsibility had forced them to focus instead on specific capital improvement projects and central government initiatives and programs.

WIth the help of USAID/South Africa, the nine largest cities in the country established the South African Cities Network (SACN) to share best practices and coordinate cities' engagement with the central government in planning, promoting, and implementing economic development. Within the context of strong, integrated governance, SACN focuses on the full scope of the urban management process. USAID asked ICMA to estabalish a partnership program to support the efforts of SACN.

ICMA recruited the city of Virginia Beach, Virginia, a member of the Virginia Hampton Roads Economic Development Alliance. With a mayor supportive of local economic development, a talented staff, and a targeted strategy, Virginia Beach had successfully attracted investment (both foreign and domestic) and jobs and built up its tourism industry. The city was eager to share its experience with SACN and its member cities as well as to learn from them.

Program Objectives

ICMA and the city of Virginia Beach collaborated with SACN to form a partnership for technical assistance and knowledge sharing in local economic development. This partnership capitalized on both SACN's goal of helping its member cities formulate and operate self-sustaining local economic development activities and ICMA's experience in facilitating municipal development worldwide.

The principal objective of the partnership was to empower the staff in the municipalities of Buffalo City, Mangaung, and Msunduzi to be more effective both at promoting local economic development and tourism and at engaging local stakeholders and institutions to plan and implement LED strategies. This would ultimately involve broadening the cities’ LED vision as well as teaching them how to turn vision and theory into practice and implementation. The partnership also focused on strengthening SACN’s capacity to support its membership in economic development.

A detailed description of program activities and results appears in ICMA's CityLinks 2003-2008 Report .

Program Results: Summary

The results of the joint efforts of all the partnerships were illustrated and shared with a wide audience in Buffalo City at the 2006 CityLinks Local Economic Development Workshop, “Accelerated and Shared Growth in South African Cities: From Policy to Practice.”

Buffalo City:

• Assessed the city’s business development challenges and opportunities
• Created a business retention plan based on the beliefs that retention is preventive medicine and that ownership should be in the public sector
• Developed a comprehensive action plan outlining the creation of a nonprofit marketing corporation to increase and support capital inquiries and employment and to develop and execute a robust business retention program.

Mangaung:

• Developed a plan for the Botshabelo industrial area in the broader context of an area known as the N8 Corridor, with the ultimate goal of leveraging improvements and economic growth for the Botshabelo area
• Recommended that the steering  committee evolve into a full-fledged quasi-public N8 Corridor Redevelopment Authority with a board of directors.

Msunduzi:

• Outlined the city’s economic development status, potential, and needs
• Laid out short-term and long-term goals
• Created an action plan that would lead to a strategic plan to increase investment in the city
• Reached agreement on a district-wide economic development strategy, appointed a consultant, and established a project team to undertake the development of the city's strategic plan.