The Role Of Local Government In Economic Development

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Heyman and Totemenyer (1988:2) defined local government as “a decentralised representative institution with general and specific powers devolved on it in respect of an identified restricted geographical area within a state”. This definition implies that local government is both local and government. Local authorities are created to render services in defined geographical areas, mainly because of the inability of central governments to attend to all the detailed aspects of government. Its importance lies around its role as a sub-system of government, its ability to promote citizen participation and its ability to further economic and social progress.

The main objective of local government is to enhance citizen participation in the grassroots
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- Promote social and economic development.
- Promote a safe and healthy environment.
- Encourage the involvement of communities and community organisations in the matters of local government.
- Ensure the provision of services to communities in a sustainable manner.


Local economic development is concerned with creating a healthy and comprehensive local economy that develop local opportunities, deal with local needs and contribute to factors such as poverty eradication and economic growth. It is characterised as a locally owned approach which allows local stakeholders to understand their economy, identify the needs, organize resources inside and outside and equally take actions meant at improving the local economy to understand its full potential. Local government therefore ensures that the factors below are met to improve the economic growth of the
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Local government therefore support small businesses and other community development organisations with the provision of support services such as training to improve their current skills.

 Providing of economic services - The Constitution states that local government is responsible for promoting the social and economic development of communities. This provides municipalities with a mandate to provide special economic services.
 Marketing and investment support can be provided in order to attract and secure potential investors.
 Small business support services can be provided to assist small entrepreneurs.
 Training and placement services can be provided to help people to acquire the skills they need to find work, or to find jobs once they have the skills. Municipalities play a role in tailoring these services to local circumstances, in order to match supply and demand in a practical way.


There are a variety of reasons for local government to be not working well in practice.
These reasons includes:
 Poor community participation
 Lack of capacity
 Failure to raise enough
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