Local economic development beyond the centre: Reflections on South Africa’s secondary cities

Research on local economic development in South Africa has been dominated by reflections on the larger metropolitan areas, while secondary cities have received scant attention. This paper evaluates local economic development initiatives in six secondary cities in South Africa. It advances three arguments based on South African and international literature. First, the local economic development strategies for these cities pay too little attention to creating effective links with their rural hinterlands. Second, while globalization increases both vulnerabilities and opportunities, these cities are ill-prepared to deal with the former or benefit from the latter. Third, local economic development strategies tend to focus on cluster initiatives, which in essence are inward looking. Such strategies increase competition with the larger metropolitan areas. The secondary cities are unlikely to compete effectively with these larger areas if they continue to follow inwardlooking or cluster-oriented approaches.

The City of Matlosana, which consists mainly of the urban settlements of Klerksdorp, Orkney and Stilfontein, has experienced considerable economic decline since the mid-1990s (-2.9% per annum between 2001 and 2011) as gold mining has decreased in the area. This economic deterioration is similar to that of Free State Goldfields (Marais, 2013; Nel and Binns, 2002b). The contribution of mining (and then mostly gold-mining) to the economy dropped from nearly 60% in 1996 to around 30% in 2011. Historically, Klerksdorp functioned as a
rural services centre for the surrounding areas. The discovery of gold after World War II gave the area a new economic base. But now the depletion of gold, the increasing dependence on international market trends and multinational corporations, and the increased cost of labour have all contributed to economic decline in the area (Crankshaw, 2002). The degree of decay, however, seems to have been less
extreme than that of the Free State Goldfields, which shares the same mining history.