Document: REDI Case Study: Ugu District Municipality

At the outset of the DBSA's Rural Economic Development Initiative (REDI) in Ugu, the district’s core problem was identified as an underperforming and spatially skewed economy with an average annual growth rate significantly below the provincial average of 4%.  This underperforming economy is impacting negatively on the district’s ability to address its high poverty levels, huge spatial disparities, and its high unemployment rate.  The design of the Ugu REDI intervention, therefore, was less focused on promoting growth and more on how to forestall further and more rapid decline within the regional economy.  The timber and sugar industries have been targeted for proactive interventions given their significant forward linkages into the local economy and the multiplier effect of either their growth or decline in the regional economy. 

The Ugu District REDI is designed to intervene at two levels.  First at a governance level through facilitating the strategic and institutional capabilities required by municipalities to play a more proactive LED role, and secondly, at a strategic level through engaging proactively with sectors that have high multipliers within the local economy, such as sugar and timber. The intended development impact of the REDI is to:

• Arrest economic decline through addressing key industries with a strong rural and urban presence, namely sugar and timber;
• Pre-empt and mitigate the impact of negative industry decisions through being informed of industry plans and needs;
• Promote more positive engagement between industry and local government;
• Promote a coherent and aligned approach towards development in the region by both the different spheres of government and industry;
• Increase capacity across all municipalities within the Ugu region to understand and engage with stakeholders regarding economic development;
• Identify investment opportunities based on sound economic arguments and understanding of market trends; and
• Promote more effective service delivery and investment outcomes owing to greater alignment of plans and service delivery mechanisms.

For feedback, comments or to propose your municpality for another LED case study, write to: contact@led.co.za.

Further case studies on the REDI of the DBSA are available for Cacadu District and Theewaterskloof Local Municipalities.