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BY ROSINA //HOABES JANUARY 2013 Supervisor: Prof. Dr Ravinder Rena Department of Economics Faculty of Economic and Management Sciences (EMS) University of the Western Cape Private Bag: X17 Bellville 7535 Cape Town, South Africa ii DEDICATION





1.1 Introduction

1.2 Orientation of the Study

1.3 Statement of the problem

1.4 Research Questions

1.5 Objectives of the Study

1.6 Significance of the Study

1.7 Limitation of the Study

1.8 Definitions of terms:

1.9 Outline of the Research



2.1 Introduction

2.2.1 The International Experience of Local Economic Development

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2.2.2 The Sub-Saharan African Experience of Local Economic Development....... 15 2.2.3 The Southern African Development Community Experience of LED........... 17 2.2.3 Stakeholder involvement as the driver of the local economic development... 20 CHAPTER THREE


3.1 Research Design

3.3 Population

3.4 Sampling Procedure

3.5 Research Instruments

3.5.1 Case study

3.5.2 Interviews

3.5.3 Document Analysis

3.6 Data Collection Procedure

3.6.1 The Semi-Structured Interview Questionnaire

3.6.2 Conducting the Interviews

3.6.3 Document Analysis

3.7 Data Analysis

3.8 Research Ethics

3.10 Elimination of Bias

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4.1 Introduction

4.2 Analysis of the Findings

Part 1: All Stakeholders

Part 2: National Government/MRLGHRD


5.1 Conclusions

5.2 Recommendations

5.2.1 Recommendations concerning the Ministry

5.2.2 Recommendations concerning the Municipality

Appendix 1: Map of Local Authorities and Regional Councils

Schedule of Local Authorities in Namibia

Appendix 2: Consent Form

Appendix 3: Structured Interview Schedule

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I, Rosina //Hoabes, hereby declare that this mini thesis entitled The role of stakeholders in local economic development: a case study of the Swakopmund Municipality is my own original work carried out under the supervision and guidance of Prof. Dr.

Ravinder Rena and it has not been submitted elsewhere in fulfilments of the requirements of this or any other award.


Date:…………………………………… DEDICATION To my precious late mother, Justine Tsipiri Seibes, for being a brave, loving and caring woman during the most difficult times, especially when I was relying on her during the

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Table 1: Profile of Swakopmund Table 2: Summary of the stakeholders interviewed


Graph 1: Awareness of Swakopmund MUN LED Strategy Graph 2: Awareness of White Paper Graph 3: Participation in the Compilation of LED in White Paper Graph: 4 LED Workshop Attendances Graph 5: Establishment of LED Strategy by Municipality of Swakopmund Graph 6: Money Allocation

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I would first and foremost like to thank the Almighty Father for giving me the strength and necessary wisdom to complete this thesis. It is impossible to complete an MBA degree without the help, assistance and moral support of those closest to you.

Therefore, my heartfelt gratitude goes to my dearest husband, Harry Aube //Hoabeb, for his endless support and encouragement during this study. I wish to thank my fellow students for their good spirit and co-operation, especially when we were working together on some joint assignments and during the preparations for examinations. I am also greatly indebted to Dr Hengari, the Director for Namibia Business School, Ms Lovisa Amon, the Course Co-ordinator at NBS and all my lecturers. Thank you all for making me realise my dreams.

Last, but certainly not least, a very special word of appreciation and thanks to Prof. Dr.

Ravinder Rena, who was my supervisor for the final Research Paper. I am much indebted to him for his commitment, excellent assistance and guidance during the time I was working on my study.

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ABSTRACT This research investigated the role of stakeholders in the local economic development in the Swakopmund Municipality. The study sought to find out the roles and responsibilities of stakeholders in the local economic development in Swakopmund Municipality. It also further identified the contributing factors affecting the effective participation of stakeholders in local economic development programmes.

The study employed a qualitative approach which relied mainly on semi-structured interviews and document analysis to obtain both primary and secondary data from different institutional actors. Some of them were the Ministry of Regional, Local Government, Housing and Rural Development, Erongo Regional Council (ERC), Municipality of Swakopmund, Namibia Chambers of Commerce and Industry (NCCI) representing Business people, Non-Governmental Organization, Faith-Based Organizations and Investors and Tourist Association of Namibia (TAN). Relevant literature was reviewed to explain the Local Economic Development as well as the roles and responsibilities of stakeholders in Local Economic Development.

The findings of the study revealed that the non-participatory top down approach, lack of communication and consultation among stakeholders resulted in stakeholders not

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On the basis of findings of the study, conclusions were arrived at and recommendations were made to improve communication and consultation between the Ministry, the Municipality and Regional Council as well as between the Municipality of Swakopmund and the stakeholders in its locality. It is argued that proper consultation can prevent a repetition of the present malaise when future legislation is introduced. It will enable the aims and objectives of the legislation to be effectively implemented by the Municipality of Swakopmund.

The research is also considered to be one of the first attempts to establish the role of the stakeholders in Local Economic Development.

Keywords: Local Economic Development, Swakopmund Municipality, Stakeholders,

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1.1 Introduction This study investigated the role of stakeholders in local economic development (LED) programmes in the Swakopmund Municipality. A brief background of Swakopmund is necessary to situate the research problem.

Swakopmund is located in the central coastal region of Namibia, 360 km (175 miles) west of Windhoek, Namibia's capital. The geographic location between the Atlantic Ocean and the barren landscapes of the Namib Desert, while housing examples of German colonial architecture makes Swakopmund a pristine seaside resort.

Table1: Profile of Swakopmund town

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Trading and shipping companies founded branches in Swakopmund. A number of these buildings still exist today. After German South-West Africa was taken over by the Union of South Africa in 1915, all harbour activities were transferred from Swakopmund to Walvis Bay. Many of the Central Government services ceased.

Businesses closed down, the number of inhabitants diminished, and the town became less prosperous. However, the natural potential of Swakopmund as a holiday resort was recognised, and this potential has subsequently been developed. Today tourism-related services form an important part of the town's economy (Massmann, 1983:2-3).

The development of Swakopmund started with the movement of the Germans, but because of the apartheid system then in place, the development was skewed. Some areas got more developed than others. The differences in development of suburbs in Swakopmund are testimony of the skewed policy of development. For example, Mondesa has been left behind in terms of infrastructure development (Massmann, 1983:3).

The Ministry of Regional, Local Government and Housing promulgated the Local Economic Development Policy in June 2008 (MRLGHRD, 2008). This research investigated the role of stakeholders in local economic development programmes in the Swakopmund Municipality. In terms of this research, stakeholders are defined as different public and social actors involved in development delivery; the stakeholders

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Association of Namibia (TAN) and business representative organisations such as NCCI.

(MRLGHRD, 2008:6). On the other hand, Local Economic Development (LED) is defined as a process by which actors within urban areas work collectively with public, business and non-governmental sectors to create better conditions for economic growth, employment generation and community wealth in order to enhance the quality of life for all members of the community (MRLGHRD, 2008:6).

1.2 Orientation of the Study Prior to independence, the apartheid colonial regime made it impossible for communities and individuals to take initiative to improve their economic and social lives. But in the face of oppression, many Namibians organised themselves to resist the system with a large number of people going into exile to join the armed liberation struggle.

At independence, Namibia was confronted with a situation that was marked by extreme social and economic inequality among individuals, groups of people and regions. Most people did not have access to productive resources, leaving them vulnerable and deprived of using their capabilities (MRLGHRD, 2008).

In Namibia, the concept of sustainable and local economic development emerged in 1997 to redress the inequalities created during the apartheid colonial period. Since then,

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(MRLGHRD, 2008:5). Regional Councils and Local Authorities bear the responsibility of government at its lower tiers for allocating resources and promoting social equity.

This required a re-definition of the changing role of government; that of facilitating markets, correcting market failure, promoting economic and political stability, ensuring distributional equity and building on the capacity of communities and civil society to provide goods and services at the local level (MRLGHRD, 2008).

It is against this background that the study is aimed at investigating the role of stakeholders in local economic development programmes, specifically in the Swakopmund Municipality. The study also seeks to find out the roles and responsibility of stakeholders in local economic development programmes.

1.3 Statement of the problem In 2008 Parliament approved the white paper on local economic development in order to bring services closer to people. The Ministry of Regional and Local Government, Housing and Rural Development set up regional offices, thereby de-centralising service delivery and local economic development to Regional Councils and Local Authority Councils to create commitment and participation. The Ministry of Regional and Local Government, Housing and Rural Development among others also identify the involvement of local people and networks of people and agencies as a key defining feature of local economic development approaches (MRLGHRD, 2008: 6). In 2010 the

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to identify and define the roles of stakeholders for successful implementation of Local Economic Development in the Swakopmund Municipality (Swakopmund Municipality, 2010:19).

In the process, the roles of stakeholders seem not to be well defined. In some cases, there seems to be overlaps in the roles of the various stakeholders. As a consequence, some programmes are not implemented optimally. Almost no research has been done in this regard.

This study found out the roles and responsibilities of stakeholders in Local Economic Development in Swakopmund Municipality. This study further identified the contributing factors affecting the effective participation of stakeholders in local economic development programmes.

1.4 Research Questions

The study answered the following main research questions:

 What are the roles and responsibilities of stakeholders in local economic

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1.5 Objectives of the Study

The objectives of the study were to:

 identify the roles and responsibilities of stakeholders in local economic development programmes in Swakopmund Municipality.

 identify the contributing factors affecting the effective participation of stakeholders in local economic development programmes.

1.6 Significance of the Study The study will provide a deeper understanding of the contributing factors affecting the effective participation of stakeholders in local economic development programmes in Swakopmund Municipality. The study will offer some possible suggestions to improve the role of stakeholders in local economic development in Swakopmund Municipality and other towns in Namibia. It will also help the decision makers to come up with possible strategies to address some of the problems in the Swakopmund Municipality.

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