Question & Answers
African Mayors ask about LED
How to assess an LED programme's impact from the common man perspective ?
How can I assess an LED programme and show to people the impact on job creation and revenue generation?
Leonard Bihondo
Mayor of Mwanza, Chairman, Association of Local Authorities of Tanzania Member of LEDNA's Steering Committee
Demonstrating LED's Impact
I would like to respond to Honourable Mayor of Mwanza City by 1st advising him to visit Misungwi and Sengerema districts in his home region of Mwanza to see and appreciate LED in action. In Mwanza, the government of the United Republic of Tanzania in collaboration with the United Nations Capital Development Fund and UNDP has for the last four years been implementing a support to Local Economy in Mwanza (SLEM) Programme that uses local Economic Development approach. Where-as the mayor’s question focus on impact on job creation and revenue generation, the key objective of many LED programs including SLEM in Mwanza has been alleviation of poverty through economic growth. The SLEM looks at how districts can think globally and act locally to maximize their full potential and comparative advantage in managing local resources (labour, land, capital technology) to produce goods and services, improve business environment, Involve stakeholders in economic governance (running a District Forum for Local Economy), empowering Micro Small and Meduim Enterprises to access vital information, technology and financial capital to increase their competitiveness etc. It is hoped that production of goods and services will improve in the two districts and therefore income to the producers and district. In other words impact on job creation and revenue generation are some of advantages or outcomes of territories that have decided to adopt LED approach. Through Public Private Partnership, Sengerema and Misungwi councils selected two reputable Micro-Finance Institutions to operate a revolving credit scheme on their behalf. The access of loans to MSMES not only made them expand their existing businesses but new ones were also established and by so doing creating jobs. A study can be carried out to find groups that have accessed loans and number of people benefiting or job created as a result of acquiring loans. The operation of a Business Development Services Centre by SLEM that offers support to many MSMES on extension, preparation of business plans, project proposals and information have enabled many MSMEs acquire loans not only through the credit scheme mentioned above but as well loans from other banks. Again opening of more businesses means job creation. One of the functions of a Business Development Services Centre is creation of awareness and sensitization of MSMEs rights and obligation of paying taxes. Indeed the Tanzania Review Authority in the two districts of Sengerema and Misungwi have effectively used the centre for education and displaying information regarding taxes. Where as we can confirm that more MSMES are knowledgeable regarding their rights and obligation of paying taxes it is difficult to ascertain whether any increases in the districts revenue is solely attributed by SLEM program. Increased revenue generation among local governments is key to their fiscal autonomy and SLEM is doing all efforts to ensure the two councils improve their revenue collection. However, in implementing (SLEM) LED programs great care is being taken especially at this early stages so that increased revenue generation does not become counter-productive to all efforts of promoting LED programs.
HOW TO ASSESS AN LED PROGRAMME'S IMPACT FROM THE COMMON MAN
Without decrying the previous correspondents response, i think the question remains unanswered. An interesting dichotomy exists. On the one hand SMEs prefer as little regulation as possible in order to flourish. However, without some regulation this question cannot be answered. A major failure I have identified in Africa is business licensing. Either business licensing is complex and corrupt and slows the process down to the extent it kills off the entrepreneurial spirit. Alternatively there is no licensing of businesses, as is the case where I live.We stopped licensing in the 1970's or 80's and since then have had no clue which sectors exist, which are under-traded, which are over-traded. so we rely on a consultant to estimate this. Why not simply collect the primary data? You cannot track progress unless you measure it. So some form of simple registration process, in order to get the business on record. is a necessity. It must be a 10 minute process, and must in no way form a barrier to entry. Then you need to regularly measure progress. Compliance should be cheap or free , and non-compliance should be very expensive. Ideally a carrot approach should be used to gain compliance, but unfortunately sometimes only a big stick works. However, avoid trying to collect confidential data if you want compliance. This in itself will create jobs for researchers to do an annual business census in each city. town or region. For more details email me Rob@smorfitt.co.zaRob
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