An evaluation of the role of the local competitiveness facility in igniting local economic development in Rwanda

Abstract

This thesis is entitled “The Role of the Local Competitiveness Facility in Igniting Local Economic Development in Rwanda”. Since 1990, the Local Economic Development (LED) approach was recommended as a self-reliance mechanism and a strategy for developing countries to address poverty and economic issues as well as adapt to shocks of the fast-changing global capitalist economy. In this context, Rwanda also sought to address its persistent poverty and economic development issues by setting up a robust economic policy with alternative development strategies to speed up socioeconomic transformation, among which is the LED approach. The study contributes to knowledge of LED, which is a relatively new field, by assessing the suitability of the LCF model as one of the proposed LED instruments for Rwanda. LCF is a pro-poor mechanism which is a matched grant fund for micro, small and medium enterprises (MSMEs), piloted in four districts of Rwanda, namely Nyagatare, Rutsiro, Gakenke and Gisagara. Typically, LCF is an LED model, notably a “growth poles theory approach”, as per François Perroux, given its design and stated inclusivity objectives to create jobs and reduce poverty in the poorest districts of Rwanda. It aims to achieve this with a combination of change factors, such as access to finance, economic partnerships and capacity-building for local enterprises. The study was necessitated by the fact that there is still limited knowledge about this recent approach of LED in Africa, and Rwanda in particular. Notably, the apparent absence of studies that evaluate LED strategy in its complexity on both material and non-material dimensions led to an exploration in this study of economic growth, employment, and inclusiveness, as LED aspires to “improve lives for all”. Primarily informed by desk research and an LED theoretical framework, this study focuses on the social world of knowledge with interpretivism as epistemological position to explore the LED phenomenon. Therefore, an inductive approach with the mixed methods research design was used: for quantitative methods, a digital questionnaire was used for data collection with Open Data Tool Kit (ODK), while Statistical Package for Social Science (SPSS) was used for statistical analysis. For qualitative methods, an interview guide for both focus group discussions (FGD) and key informants interviews (KIIs) as well as field observations generated data in scripts and pictures that were analysed and, together with quantitative data, made up the research findings and recommendations. The findings show that from 2017 to 2019, LCF was an unprecedented programme that contributed tangible results to LED in target areas based on local potentialities and industrial development. In total, 1 476 new jobs were created with an increment of 56%, while 73% of total jobs were given to the poorest residents. Local businesses became more competitive, with an increase of 76% of turnover, and local market development with 244 new ‘Made in Rwanda’ products. In terms of inclusivity and livelihood, LCF supported weak and informal companies thanks to trickle-down effects, while the incomes earned by employees supported up to 35% of their total households’ basic needs, among other results. While exploring the LED phenomenon and based on the research findings, the researcher testified that LED is not only measured in terms of economic growth (Y), but also its combination with wellbeing (WB). Therefore, LED is a function of different factors used together, namely local milieu (LM), labour (L), and capital (K), business agglomeration effect (AE) as well as territorial innovation (I); thus, the new proposed LED formula YWB = f (LM, L, K,AE,I). Additionally, however, the findings show that LCF design and implementation critically needs a substantial change in terms of governance and access conditions by local companies to become more inclusive of informal businesses, allow more local participation, and develop adaptive and flexible mechanisms for becoming a sharp instrument to achieve better LED results.

Le thesisi inesihloko esithi "Indima Yesikhungo Sokuncintisana Kwasekhaya Ekunciphiseni Ukuthuthukiswa Komnotho Wendawo eRwanda". Kusukela ngonyaka we-1990, indlela yokuThuthukiswa koMnotho Wendawo (i-TMW) yanconywa njengendlela yokuzimela kanye necebo lamazwe asathuthuka ukubhekana nezinkinga zobuphofu nezomnotho kanye nokuzivumelanisa nokwethuka komnotho wonxiwankulu oshintsha ngokushesha. Kulesi simo, iRwanda iphinde yafuna ukubhekana nezinkinga zayo eziqhubekayo zobuphofu nokuthuthukiswa komnotho ngokusungula inqubomgomo yezomnotho eqinile enezinye izindlela zokuthuthukisa ukusheshisa uguquko kwezomnotho, phakathi kwayo okuyindlela ye-TMW. Lolu cwaningo lufaka isandla olwazini lwe-TMW, okungumkhakha omusha, ngokuhlola ukufaneleka kuyimodeli ye-LCF njengenye yemathuluzi eTMW ezihlongozwayo zaseRwanda. I-LCF iyindlela yokuxhasa abampofu eyisikhwama semali yesibonelelo yamabhizinisi amancane, naphakathi nendawo (ama-‘MSMEs’), ahlolwa ezifundeni ezine zaseRwanda, okuyiNyagatare, iRutsiro, iGakenke neGisagara. Ngokujwayelekile, i-LCF iyimodeli ye-TMW, ikakhulukazi "indlela eyithiyori yokukhulisa izingongolo ", njengo-François Perroux, enikezwe ukwakheka kwayo futhi washo izinhloso zokubandakanya ukudala amathuba emisebenzi nokunciphisa ubuphofu ezifundeni ezihlupheka kakhulu zaseRwanda. Ihlose ukufeza lokhu ngokuhlanganiswa kwezinto eziguqukayo, njengokufinyelela kwezezimali, ukubambisana kwezomnotho kanye nokwakha amandla amabhizinisi endawo. Ucwaningo lwaludingeka ngenxa yokuthi kusenolwazi olulinganiselwe ngale ndlela yakamuva ye-TMW e-Afrika, kakhulukazi kanye naseRwanda. Ngokuphawulekile, ukungabi bikho kwezifundo ezihlola isu le-LED ngobunzima bayo kuzo zombili izinto ezibonakalayo nezingezona ezezinto kuholele ekuhlolweni kulolu cwaningo lokukhula komnotho, ukuqashwa, kanye nokubandakanya, njengoba i-TMW ifisa "ukwenza ngcono izimpilo zabo bonke abantu". Ngokujwayeleke kakhulu ukwaziswa ngocwaningo lwasedeskini kanye nohlaka lwethiyori ye-TMW, lolu cwaningo lugxile ezweni lomphakathi lolwazi nge-transilivizimu njengesikhundla se-ephisthemeloji sokuhlola isimo se-TMW. Ngakho-ke, kusetshenziswe indlela yokufaka inkomba ngezindlela ezixubekile zocwaningo: ngezindlela zokubala, kwasetshenziswa uhlu lwemibuzo lwedijithali ekuqoqeni idatha nge-Open Data Tool Kit (ODK), kuyilapho iStatistical Package for Social Science (SPSS) yayisetshenziselwa ukuhlaziywa kwezibalo. Ngezindlela zokufaneleke nesimo, umhlahlandlela wezingxoxo wazo zombili Izingxoxo Zamaqembu Okugxila kuwo (i-IZO “FGD”) kanye nezingxoxo ezibalulekile zabafundisayo (ama-‘KIIs’) kanye nokubhekwa kwemikhakha okwenze idatha kwizikripthi nezithombe ezahlaziywa futhi, kanye nedatha ebalwayo, yakha okutholakele ocwaningweni nezincomo . Okutholakele kukhombisa ukuthi kusuka ngonyaka wezi-2017 kuya kowezi-2019, i-LCF ibiwuhlelo olungakaze lubonwe olube nemiphumela ebonakalayo ku-TMW ezindaweni ezibhekiswe kuzo ngokuya ngamakhono endawo kanye nentuthuko yezimboni. Sekukonke, kuvulwe imisebenzi emisha eyi-1 476 ngokunyuka kwama-56%, kuyilapho ama-73% emisebenzi isiyonke inikezwe izakhamuzi ezihlupheka kakhulu. Amabhizinisi endawo aba nokuncintisana okukhulu, ngokunyuka kwemali engenayo engama-76%, nokuthuthukiswa kwezimakethe zendawo ngemikhiqizo emisha engama-244 ‘Yenziwe eRwanda’. Mayelana nokubandakanywa kanye nokuziphilisa, i-LCF isekele izinkampani ezibuthakathaka nezingahlelekile ngenxa yemiphumela ebucayi, kanti imali etholwa ngabasebenzi yasekela kwaze kwafika ku-35% wezidingo eziyisisekelo zamakhaya abo, phakathi kweminye imiphumela. Ngenkathi ehlola lo mkhuba we-TMW futhi esuselwe kokutholakele kocwaningo, umcwaningi ufakaze ukuthi i-TMW ayilinganiswa kuphela ngokukhula komnotho (Y), kodwa futhi nangokuhlanganiswa kwayo nempilo engcono (MN ‘WB’). Ngakho-ke, i-TMW ingumsebenzi wezinto ezahlukahlukene ezisetshenziswe ndawonye, okungukuthi indawo yasendaweni (i-ND), ezabasebenzi (S), kanye nemali yokuqhuba umsebenzi (M), umphumela wokuhlanganiswa kwebhizinisi (PHB) kanye nokuqanjwa kwendawo (Q); ngakho-ke, ifomula entsha ehlongozwayo ye-TMW eyi- YWB = f (ND, S, M, PHB, Q). Ngokwengeziwe, kodwa-ke, lokho okutholakele kukhombisa ukuthi ukwakhiwa kwe-LCF nokuqaliswa kwayo kudinga ushintsho olukhulu maqondana nokubusa nezimo zokufinyelela ezinkampanini zendawo ukuze zifake kakhulu amabhizinisi angahlelekile, vumela ukubamba iqhaza okwengeziwe kwendawo, futhi wakhe izindlela eziguqukayo nezishintshashintshayo zokuba ithuluzi elibukhali ukufeza imiphumela engcono ye-TMW.

Die titel van hierdie proefskrif is “Die rol van die fasiliteit vir plaaslike mededingendheid in die stimulering van plaaslike ekonomiese ontwikkeling in Rwanda”. Sedert 1990 word ontwikkelende lande aangeraai om Plaaslike Ekonomiese Ontwikkeling (PEO) as selfredsaamheidmeganisme en teenvoeter vir armoede, ekonomiese probleme en die skokke van die snelveranderende, globale, kapitalistiese ekonomie toe te pas. In die lig hiervan het Rwanda ook gepoog om sy hardnekkige armoede- en ekonomiese vraagstukke op te los deur ʼn kragdadige ekonomiese beleid en alternatiewe ontwikkelingstrategieë, waaronder PEO, en sosio-ekonomiese transformasie te bespoedig. Hierdie studie brei die betreklik nuwe kennisgebied van PEO uit deur die geskiktheid van die bestaanskoolstoffonds- oftewel BKF-model, een van die PEO-metodes wat vir Rwanda voorgestel is, te bepaal. Die BKF is gemik op armes en is ʼn bypassende toelaagfonds vir mikro-, klein en medium ondernemings (MKMO’s). Dit is in vier Rwandese distrikte op die proef gestel, naamlik Nyagatare, Rutsiro, Gakenke en Gisagara. Die BKF is ʼn PEO-model, ʼn “groeipoolteoriebenadering” volgens François Perroux, gegewe sy ontwerp en verklaarde inklusiwiteitsmikpunte om werk te skep en armoede in die armste Rwandese distrikte te verlig. Hierdie mikpunte sal bereik word deur ʼn kombinasie van veranderingsfaktore soos toegang tot finansiering, ekonomiese vennootskappe en die verbetering van die vermoëns van plaaslike ondernemings. Hierdie studie is genoodsaak deur die gebrek aan kennis oor die toepassing van hierdie nuwe benadering van PEO in Afrika en in Rwanda in die besonder. Aangesien daar klaarblyklik geen studie oor die komplekse materiale en niemateriële dimensies van die PEO-strategie onderneem is nie, verken hierdie studie ekonomiese groei, werkskepping en inklusiwiteit. PEO streef immers daarna om die lewenspeil van iedereen te verbeter. Hoofsaaklik lessenaarnavorsing met PEO as teoretiese raamwerk is gedoen. Hierdie studie bepaal hom by die maatskaplike wêreld van kennis en gaan van ʼn epistemologiese vertrekpunt uit om PEO as verskynsel te bestudeer. Derhalwe is ʼn induktiewe benadering gevolg en het gemengde metodes die studieontwerp gekenmerk. Wat die kwantitatiewe metodes betref, is ʼn digitale vraelys ingespan om data met behulp van die Open Data Tool Kit (ODK) te versamel. Die Statistical Package for Social Science (SPSS) is in die statistiese ontleding aangewend. Wat betref die kwalitatiewe metodes, het ʼn onderhoudgids vir fokusgroepbesprekings (FGBs) en onderhoude met sleutelinformante (OSI) sowel as veldwaarnemings data in oorspronklike dokumente en beelde voortgebring. Dit is ontleed en het saam met die kwantitatiewe data tot die bevindings en aanbevelings gelei. Volgens die bevindings was die BKF van 2017 tot 2019 ʼn ongeëwenaarde program wat danksy plaaslike moontlikhede en nywerheidsontwikkeling tasbare resultate in die teikengebiede tot gevolg gehad het. Altesame 1 476 nuwe werksgeleenthede is geskep, wat ʼn styging van 56% verteenwoordig. Nagenoeg 73% van die totale werksgeleenthede is aan die armste inwoners gegee. Plaaslike ondernemings het meer mededingend geraak, met ʼn styging van 76% in omset, en die plaaslike mark het flink gegroei danksy 244 nuwe produkte waarop “Made in Rwanda” gepryk het. Met betrekking tot inklusiwiteit en bestaan, het die BKF danksy die deursypeleffek swak en informele maatskappye ondersteun. Werknemers se inkomste het tot 35% van hulle totale huishoudings se behoeftes bevredig. Op grond van ʼn verkenning van die verskynsel en die bevindings, voer die navorser aan dat PEO nie alleen aan ekonomiese groei (Y) nie, maar ook saam met welstand (WB) gemeet moet word. Gevolglik is PEO die gesamentlike resultaat van verskeie faktore, naamlik plaaslike milieu (LM), arbeid (L), kapitaal (K), die besigheidsagglomerasie-effek (AE) en gebiedsinnovering (I). Dus word ʼn nuwe PEO-formule voorgestel: YWB = f (LM, L, K, AE, I). Afgesien hiervan dui die bevindings egter daarop dat die ontwerp en implementering van die BKF ingrypend moet verander ten opsigte van die bestuur daarvan en die toegangsvoorwaardes vir plaaslike maatskappye sodat dit meer informele ondernemings insluit, meer plaaslike deelname moontlik maak, en aanpasbare en buigsame meganismes ontwikkel om beter PEO-resultate te behaal.