Document: West Rand DM: LED Strategy

The West Rand District Municipality (WRDM) has a Growth and Development Strategy (2007) which focuses on the development of sectoral clusters and resulted in the establishment of the West Rand Development Agency. In view of the requirements for local government to have a credible LED strategy in place, the current Economic Development Strategy needs to be reviewed to reflect the most recent local and regional development dynamics and appropriately packaged as an LED Strategy.

Urban-Econ, a firm of development economists, has been appointed by the Gauteng Economic Development Agency (GEDA) to update the existing economic strategies of the West Rand District Municipality in order to develop a Local Economic Development Strategy (LED). The West Rand District Municipality, which is part of Gauteng province, reflects the challenges that have been identified nationally. These include:

• A high unemployment rate (24%),
• A shortage of skilled labour and
• A high HIV/AIDS incidence (16%).

At the same time, its economic performance shows that the implementation of the LED strategy should commence speedily. The following are the main findings within the situational analysis:

• The Gross Geographic Product (GGP) growth rate of WRDM is 1.1%, below the national target of 4.5% for 2005 – 2009. 
• The sectors that contribute the most to the GGP of the West Rand are Manufacturing, Government Services, Finance and Trade. 
• The sectors that contribute the most to employment are Finance, Trade, Manufacturing and Government and Community Services. 
• The agricultural sector is characterised by low productivity relative to its importance in employment. Agricultural productivity and value-added by the activities in agriculure need to be addressed in the LED Strategy. 
• The main weakness of the WRDM economy is that it currently has a comparative advantage in mining where it is vulnerable to fluctuations in mineral prices. There are also weak linkages between the sectors as the transport, electricity and manufacturing sectors could work to serve the primary sectors, mining and agriculture. 
• The manufacturing sector is the most important sector in terms of production, but not in employment. In addition, while the contribution of manufacturing to production has increased, its contribution to employment has decreased over the same period.
• The finance, business services and trade sectors showed strong growth in the West Rand District, in terms of both production and employment, while growth in the transport sector has been slow. 
• The services sector is a large source of employment, but a small contributor to production. The LED Strategy must address productivity concerns in this sector.