Business development challenges in a rural District Municipality in South Africa: A case of Fezile Dabi District Municipality

Abstract

Business development continues to be an important driver of economic growth in many rural settings. Some of the results of business development in rural areas include job creation, innovation, entrepreneurship, infrastructural development, and skills development, among others. Many developing countries have identified rural business development as a critical area in their development agenda. The purpose of this study was to explore business development challenges faced by enterprises in the Fezile Dabi District Municipality in rural South Africa. Using the survey method, a questionnaire was administered to a purposive sample composed of 143 business owners and managers located within the municipality. Data were assessed for frequencies and percentages on each item in the questionnaire. In addition, Cronbach’s coefficient alpha was used to test the reliability of the scale. The findings of the study indicate that there are gaps in four areas, namely, markets and business development (1), labour supply (2), business planning (3) and the local operational environment (4). These gaps hinder business growth in the municipality. Establishment of business incubators, improvement of networking between business leaders, and the implementation of an appropriate business retention and expansion program are some of the strategies that may be implemented to eliminate the identified gaps.

Keywords: Business development, district municipality, economic growth, small to medium enterprises