While I of course believe that LED has a lot to offer developing countries in general and African countries in particular. I don't, however, share the enthusiasm of some practitioners and donors that LED could be implemented pretty much everywhere.
Africa has major resource endowments and potentially competitive economic sectors whose potential could be unleashed for greater employment creation and revenue generation. The LED approach, based on a partnership between public, private and civil society actors to strategise on and invest in improving their local economies, has major potential to remove the obstacles that these economic sectors face (such as barriers relating to infrastructure, human skills, investment levels or capacity of local firms) in order to unleash their potential.
However, for LED to be successful, some minimum pre-requisites should be in place. At a minimum, one could say that the country or region needs to:
- Be free from conflict and major unrest – as conflict presents a major impediment to private sector confidence and therefore to levels of investment and business activity
- Have a relatively free market economy – with macro-economic and sectoral policies that encourage and facilitate private sector activity
- Have some economic endowments and related comparative advantages with the potential to be competitive on international markets after some targeted support
While many places in Africa certainly meet these pre-requisites, others do not. One particular consultancy I did in a country in East Africa (which shall remain nameless not to upset anyone) really brought home to me the lesson that some places in Africa are just not suitable for LED. My task was to recommend LED initiatives that could be implemented by local governments in some of the poorest and most remote regions of this country.
It was almost impossible to come up with sensible LED initiatives in that context because:
- The national economic policy context in this country remains non conducive for private sector development or attracting inward investment – let alone LED. Major policy barriers exist including insecure property rights due to ownership of land by the state, a relatively closed environment to FDI as well as regulatory difficulties in starting a business and trading across border, among other issues.
- The targeted regions all suffer from very harsh conditions including inadequate access to water, extremely low levels of infrastructure and environmental degradation. The regions are all characterised by small, scattered populations making public service provision particularly challenging. Many of the areas are inaccessible with poor or no roads and few social services. Conflict is a serious issue in some of the areas and the security situation is often volatile.
- Local governments in the above regions face acute capacity gaps and difficulties in attracting and retaining qualified civil servants while relationships between government, private sector and civil society actors are currently characterised by an atmosphere of mistrust and animosity.
This begs the question, therefore, as to why the decision was taken to embark upon an LED programme in this context in the first place. In the end all we could do was to recommend investments that remove the obstacles faced by specific value chains such as livestock and agricultural chains. These investments would not differ much, however, from those that would have been implemented by a livelihoods or food security programme and didn’t require the LED approach. It is also arguable whether local governments were the ones best placed to implement such interventions, given their major capacity constraints in comparison to NGOs or others.
The question of whether LED is suitable in the African context and where specifically within African countries is it likely to have the greatest success has already been academically researched. For example, Rodriguez-Pose and Tijmstra (2005) point out that “some of the specificities of Sub Saharan Africa, such as low population density and lack of spatial connectivity, weak integration across the primary-secondary tertiary sectors, reliance of both rural and urban households, and especially public sector workers, on multiple sources of livelihood to survive, the predominance of the informal economy, and weak governance and government capacities, may put a spanner in the works, limiting the ability of sub-national institutions to develop and implement successful strategies, especially in those areas where capacity constraints are greatest.” They conclude that LED may not be relevant for the poorest and most remote parts of the sub continent.
Yet it seems that due to pressures exerted by donor budgets that need to be spent or governments wanting to show they are doing something for the poorest regions, LED is being implemented in areas where it is not the best solution and is likely to fail.
This does not mean to say that no economic development is possible in such areas but that there are alternative development approaches suited to those contexts.
It would be better to invest on social protection, basic service provision or livelihoods and food security interventions targeting the household level. That way resources are not wasted on LED strategies and investments that are likely to fail.
I would be interested to hear the views of others on this issue though.....
Emma Wadie Hobson