South African president Thabo Mbeki recently said that there were two economies in this country, existing side by side and not intersecting: a first and a second economy. The first economy is first-world and comprises sophisticated businesses with well-developed infrastructure and markets. The second economy exists on the fringes of society with very little infrastructure and uncertain markets. This second economy is very vulnerable and fragile. There is also a huge economic gap between the high income earners and the low income earners. He said that it was imperative that these two economies be brought closer together.

The Gijima KZN LED Support programme has been specifically designed to support projects that could assist disadvantaged people to improve their lives through economic activity. It provides access to an ambitious European Union fund that has been specifically set up for this purpose. Part of the goal is also to create a better environment for economic growth, and this means developing the capacity and skills base of local municipalities so that a climate is created for local economic development. Its overarching purpose is to make the second economy less vulnerable to the vagaries of business.

Who benefits from Gijima KZN?
Partnership Groups with good ideas for ways to improve their quality of life by increasing their economic activity can apply to the Gijima KZN programme for funding provided their proposals meet the set criteria for the scheme.

Local and provincial governments will also benefit from Gijima KZN through training, access to improved performance and co-ordination between different departments. The programme aims to create a climate where government officials, the private sector, unions and community organizations all work together to deliver services.

Why is Gijima KZN different?
In the past, disadvantaged communities or informal businesses have often been excluded from applying for funding for projects because the process of applying for funds has been difficult and expensive. Recognising this, Gijima KZN has allocated part of its funding to make sure that applicants get expert assistance in applying for funding. Funds are also available to cover the costs of these applications. Special area offices have been set up, with expert personnel, to guide applicants through the process and to answer any queries.

How does Gijima KZN work?
The Gijima KZN programme has four different funds, each for a different purpose.

1. The first fund is the Business Enabling Fund (BEF). This fund has been specifically designed to assist and strengthen local and provincial government with skills development and capacity building in local economic development. One of the goals is to encourage local and district councils to work with the private sector, NGOs, community-based organizations, business chambers, organized labour and other groups.
2. The second fund is the Local Competitiveness Fund (LCF). This is a service intended to streamline existing businesses through networking with other similar businesses. In time businesses will grow through improving their access to markets; improving their products and by improving their output. Particularly identified to benefit will be small businesses involved with agriculture and the processing of agricultural products; clothing and textiles; wood and wood products; arts, crafts and cultural industries; tourism, information and communications technologies; logistics and transport.
3. The third fund is the Networking and Co-operation Fund (NCF). This fund will mainly be used for creating awareness of the program, developing the institutional capacity of local and provincial government in local economic development and monitoring the program aimed at learning lessons for future implementation.
4. The fourth fund is the Technical Assistance Fund. This fund is specifically aimed at providing technical expert advice to applicants to assist them in formulating application forms. Through workshops, expert advice and training, officials will be assisted in accessing the first two funds. They will also be encouraged to create partnerships between government and the private sector.

Where are we now?
Although launched in 2003, the Gijima KZN has only been fully operational for just over a year and will continue to operate until 2009. During 2004 four calls for proposals have been made. Two calls for proposals were made for the Business Enabling Fund (BEF) and one for each of the LCF CAP, and LCF implementation. These applications have been assessed and evaluated. The lists of approved projects can be found in the Approved Projects section of this website.

Two calls for proposals are currently open – one for LCF CAP and the other for LCF implementation. Further calls for proposals for the BEF and LCF funds will be made during 2006.

The challenges of Local Economic Delivery:
Service delivery in many areas has been bedevilled by many and varied factors. Local councils often lack skills and capacity. Various factors have contributed to a lack of experience in local councils. In addition, the epidemic of HIV/AIDS has created a whole new set of challenges. There is also a gender imbalance that needs to be addressed. Councils are often expected to deliver services to areas with poor infrastructure or that are widely dispersed.

All of the above have been taken into account in the planning of Gijima KZN. It has been acknowledged that it is difficult to create a climate of economic growth where basic infrastructure and services are lacking. It is also difficult to create a climate for economic growth where HIV/AIDS is having an impact on the workforce, and where women are still disempowered. Gijima KZN workshops for local and provincial government officials will encourage officials to include the impact of HIV/AIDS and gender imbalances in their planning.