LED interventions can be as broad as a long term comprehensive regional economic strategy, or as a specific quick-win project - or ideally, a combination of both! Whatever the approach there is a need to understand the economic context, decide who and how stakeholders will be engaged and how all the various organisational steps will happen.
LED governance, therefore, includes the use of institutional resources for LED programmes, building effective stakeholder networks, improving local government and building capacity and competency to deliver on LED strategies and projects.
LED can be undertaken by a variety of different stakeholders including:
- District / Regional Governments
- Local offices of line Ministries
- Investment and export promotion agencies
- Enterprise development agencies
- Private sector companies (large and small)
- Financial service providers
- Educational and research institutions
- Chambers of Industry and Commerce
- Civil society organisations (NGOs, CBOs, associations representing women, youth, disabled and other groups)
- And others
However, LED cannot be achieved in the absence of effective local government. Local government is the main body mandated with providing public services that would alleviate key constraints affecting economic performance at the local level (e.g. low levels of infrastructure, human skills or regulatory barriers). Local government is also the main actor at the local level with a mandate or capacity to coordinate the activities of the multiple actors contributing to development in a locality. In a decentralised system, local governments are also mandated to enact national sectoral policies (for agriculture or road works, for example) at the local level, putting them in a key position to develop strategies for local economic development. Where local government is weak or nonexistent, the efforts of private sector and civil society towards economic development usually produce sub optimal outcomes.
According to accepted LED practice, local governments have a limited yet critical role in LED promotion, which usually focuses on: Convening stakeholders to develop a strategy for their local economy; Enhancing the enabling environment for local businesses; Attracting investment in priority sectors with competitive potential; Making investments that alleviate obstacles faced within priority sectors; Incentivising the private sector to enter new activities or sectors with competitive potential by underwriting their initial risk; Incentivising other service providers (e.g. Microfinance providers) to better serve the needs of local businesses and citizens.
However, in the majority of African countries, local governments are seldom able to play such a role. This is firstly due to their unclear mandates and functional assignments for LED promotion in local governance legislation. Secondly, if and when such mandates are given, local governments are usually under-resourced, both in terms of financial and human capacities to fulfil them.