Organisation: P3 - Partnership, Participation, Progress

Supported by funding from the European Union and the Swedish International Development Agency, P3 is testing a number of approaches related to LED and transparency in 25 municipalities in South Africa, Namibia and Botswana. The goal is to make lessons learned, material produced and progress available to a wider audience through the partner associations.

P3's specific objectives are promoting transparency and improved municipal finances through economic development. It is not a traditional capacity building programme but is deliberately aimed at partnering with non-metropolitan municipalities where there will be significant impact. In South Africa, 12 municipalities were selected to participate because of their geographic, economic and demographic characteristics. At the same time, they have similar internal or institutional conditions which would benefit from P3 support. The participating municipalities are:

Eastern Cape - Instika Yethu and Emalahleni in Chris Hani DM, Senqu, Elundini in Ukahlamba DM
Free State - Kopanong and Mohokare in Xhariep DM. Naledi in Motheo DM, Setsoto in Thabo Mofutsanyane DM
Western Cape - Theewaterskloof and Cape Agulhas in Overberg DM. Hessequa and Mossel Bay in Eden DM

In partnership between P3 and municipalities, the process starts with a diagnosis of what needs to be addressed before the application of tools and lessons informed by international experience. P3 is directly supported by Financial Management and LED practitioners assisted by dedicated process facilitators. Individual details and the type of support to each municipality are negotiated based on P3 budget limitations. P3 provides interventions in the form of a LED Toolbox with various options for focusing the interventions using locally appropriate methods selected with the municipality. Municipalities choose only one or two of the tools and the P3 team will then work with the LED officials to unpack a detailed 16month programme of activities to guide the engagement and form part of the monitoring and evaluation format. The toolbox components are as follows:

Business retention and expansion offers the municipality a structured approach to identifying and supporting the needs of existing local businesses. It can be applied where an LED strategy is already in place, and some work needs to be done on opening up channels of communication between the municipality and local business. This approach is especially appropriate where businesses are threatening to leave the area. Job creation out of expanding existing businesses is often more sustainable than creating jobs out of untested new businesses, which have a high failure rate.

Red tape reduction. Red tape refers to regulations, rules, administrative procedures that stand in the way of doing business efficiently. They often form barriers to entry and exit, and have unintended negative consequences on local competitiveness. The aim is to reduce the costs and increase the ease of doing business in a locality, prioritise economic growth and job creation, reduce barriers to entry and exit for small business and encourage transition from the informal economy into the formal economy.

Leak-plugging in the local economy identifies ways to stop value leaving the locality, improves the circulation of cash within the local economy, and improves the quality of life of residents. It is based on prioritising local enterprise, and emphasises local value-addition and innovation. It looks for activities with strong multiplier effects, and increases the interconnectedness of elements within a local economy. More robust local economies are the long-term goal. This approach is especially useful in small scattered rural economies located reasonably close to major centres such as secondary cities. Local businesses here compete directly with their larger neighbours where transaction costs may be lower.

All municipalities in the P3 project hold quarterly LED Round Tables to engage stakeholders around a concrete agenda for change. In addition, two business enabling environment surveys are carried out in each municipality: one at the start of the action and another at the end, to measure change. The P3 project applies LED tools on the premise that by improving the business enabling environment through municipalities and their stakeholders working together, jobs will be created in the medium to long term.

The newsletters attached below contain further information on activities and outcomes of P3 so far.

Contact:
Lu Heideman – LED luheid@mweb.co.za