Local Competitiveness Fund (LCF)
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The primary emphasis of the LCF will be to encourage partnerships which facilitate private sector investment in sustainable local economic development projects.
The LCF will provide partnership groups with support to establish integrated projects to encourage:
- A base of infrastructure and services to provide a platform for increased competitiveness.
- Enabling structural economic change, including repositioning the province into higher value-added segments of supply chains, based on knowledge based manufacturing and service sectors, while increasing equitable participation in these value chains.
- Providing particular support to sectors that have a high potential to boost the socio-economic objectives, in particular, employment: agriculture and agro processing; tourism; clothing and textiles; wood and wood products; arts, crafts and cultural industries; information and communications technology; logistics and transport.
The LCF will attempt to create a self-sustaining market for business support services, finance and other essential “private goods” with linked support to local government to address those “public goods” which are essential to the achievement of local economic development initiatives.
The LCF is split into two discrete types of support: LCF Competitiveness Action Plan (LCF CAP) and LCF Implementation (LCF IMP).
What is a Competitiveness Action Plan (CAP)?
A Competitiveness Action Plan is a plan of action to carry out an activity which will increase the competitiveness of a particular area, sector or enterprise and may include, but will not be limited to:
- Business plans;
- Financial plans;
- Project feasibility studies;
- Operational plans;
- Sector plans;
- LED plans linked to IDPs;
- Marketing plans.
What can be supported in the preparation of a CAP?
The eligible costs for funding a CAP include:
- Technical assistance;
- Local consultation and training exercises;
- Competitive advantage identification exercises;
- Research, economic analysis and assessment exercises [value chain, SWOT, sector analysis, market research, training needs assessment];
- Specialised technical assistance to help partnerships to develop an HIV/Aids coping and prevention strategy for a sector or workplaces within a specific locale;
- Establishment and operational costs of the Partnership Group during the preparation of the Competitiveness Action Plan.
Who is eligible to access funding support for the preparation of a CAP?
Only Partnership Groups will be eligible to access funding from the LCF. The Partnership Group will involve representatives of key stakeholders for the particular sector, set up to:
- represent the interests of the development players and/or communities concerned – normally, but not necessarily a Public-Private Partnership;
- define the Competitiveness Action Plan and submit the application for support under the Fund;
- implement the Competitiveness Action Plan;
- wield the power of decision.
A partnership must be constituted from two or more of the following types of entities: Business enterprises, trade unions, non-governmental organisations, institutions providing services to the economy, legally established community entities, finance institutions, government (national, provincial or local government) who agree to establish a CAP.
What geographic area is eligible for support from the LCF?
Partnership Group members need not all be located within the KwaZulu-Natal Province, but only those whose primary location is within the KwaZulu-Natal may be direct beneficiaries of support under the fund. The geographic area covered by a CAP must be clearly defined but need not correspond to an administrative area or sub-division of KwaZulu-Natal.
What are the provincial priority sectors?
All sectors of the economy are eligible for support, but priority will go to the following sectors:
- agriculture and agri processing;
- clothing and textiles;
- wood and wood products;
- arts, crafts and cultural industries;
- information and communications technology;
- logistics and transport.
What level of funding is available for the preparation of a CAP?
The level of Fund support for the preparation of a CAP will be between R40 000 and R800 000. Although specific conditions will apply, grants will normally be up to 70% of the assessed, real cost of the project. The balance of funding must be provided by the Partnership Group. “In kind” contributions are acceptable as part or all of the contribution of the Partnership Group.
What costs are eligible for support in the implementation of a CAP?
Once a Competitiveness Action Plan has been completed, additional financial assistance can be sought by the Partnership Groups to implement the CAP. Applicants need not have received funding for the preparation of a CAP in order to apply for funds to implement a particular project. The eligible costs for the implementation of a CAP include:
- Common capital expenditure;
- Training costs [venue hire, training facilities, training material development, publication and printing, advertising, etc.];
- Study tours [travel, subsistence, organisational costs, etc];
- Knowledge management, information systems, and related costs;
- Technical assistance;
- Project management’s costs.
What are the CAP implementation priorities?
If a CAP or proposal is to receive implementation funding, it must contain two (2) or more of the following actions:
- Actions to improve the design and/or packaging of a product or service;
- Actions to improve and monitor the quality of a product or service;
- Actions to improve the knowledge of market demand, and matching supply to that demand;
- Actions to encourage the development of new outlets for products and services;
- Actions to encourage outsourcing of products and services by government and/or large enterprises;
- Actions to improve products/services so that they can improve and move up the value chain;
- Actions to improve the operation of the market in business development services related to the sector;
- Actions to improve the integration of small-scale producers and service providers into the product or service chain;
- Actions to support Partnership Groups to upgrade the skills and professional profiles of the target beneficiaries within the sector in order to implement the CAP: training needs assessments; training program design; training program delivery; training of trainers;
- Actions to encourage black economic empowerment within the sector;
- Actions to encourage the sustainable economic development of local communities as a key element of sector growth;
- Actions to improve common economic infrastructure essential to the operation of the Competitiveness Action Plan and/or IDP;
- Actions to encourage investment by beneficiaries essential to the operation of the CAP and/or IDP;
- Actions to facilitate either direct public or private sector investment or loan finance to facilitate the implementation of the CAP and/or IDP.
What level of funding is available for the implementation of a CAP?
The level of Fund support for the implementation of an approved CAP will be between R400 000 and R 4 million. Specific conditions will apply, but grants will normally be up to 70% of the cost of implementing the action plan. The balance of funding must be provided by the Partnership Group. In certain cases, “in kind” contributions will be acceptable for up to 80% of the contribution