Small, Meduim and Micro Enterprises and local economic-base restructuring – A South African Local Government Perspective

Abstract

Small, Medium and Micro Enterprises (SMMEs) worldwide are seen as the cornerstones of national economies. In South Africa they acquire government support as a means of restructuring the national economy and to reduce poverty. In local government, SMMEs are an integral part of local economic development strategies to reduce persistent spatial inequalities that are most obvious when comparing towns with townships. If SMME development could be driven by local municipalities, spatial inequalities would be reduced and the pace of local economic-base restructuring increased. Sadly, municipalities fail to take advantage of their intergovernmental relations roles and as a result rely on SMME development support interventions from national and provincial spheres of government. SMMEs have the potential to reduce unemployment, generate income, create assets, contribute to skills development, reduce the rate of crime and (often violent) service delivery protests, and attract investments in local municipalities. They thus have the potential to contribute to the local economicbase restructuring of South African local government.