Re-engineering local economic development through SMMEs post-COVID-19 in rural municipalities

Abstract

Small Micro, Medium Enterprises (SMMEs) are the most strategic mechanisms rural municipalities in South Africa advocate for to generate employment and increase household income. The Citizen Empowerment Theory was utilised to understand how Local Economic Development (LED) can be re-engineered by SMMEs post-COVID-19 in South African rural municipalities. To arrive at a meaningful conclusion, the paper adopted a document analysis which draws from pre-COVID-19 narratives on SMMEs and examines government documents and peer-reviewed articles that inform SMME development post-COVID-19 in South Africa. Revelations emanating from the document analysis indicate the severe damage COVID-19 did to both formal and informal SMMEs. To grow and reposition themselves in the dynamic entrepreneurship landscape post-COVID-19, SMMEs in South Africa require strategic business approaches that enable them to draw funding from external sources instead of relying on government funding which in most cases has red tape and other bureaucratic complexities tied to it. Further analysis of documents indicates the need for rural SMMEs to embrace digital entrepreneurship where product marketing is done online including most of the business transactions. By doing this, evidence from the document review affirms that SMMEs become competitive by tapping into external markets in the process linking themselves to stakeholders who may have an impact on the growth and sustainability of SMMEs towards employment regeneration and improved LED in rural municipalities. To have an integrative LED that promotes citizen participation post-COVID-19, the paper recommends rural municipalities foster close ties with local SMMEs which is critical for enhancing their networking strategies while SMMEs diversify their portfolios to generate income as well as withstanding shocks that may be triggered by unpredictable external environments.