Thesis (M.Sc.)-University of KwaZulu-Natal, Pietermaritzburg, 2005.On a global scale, the challenges of confronting poverty and inequality continue to dominate the development agenda. The ability of local economic development to empower local people has earned favour with national governments and development theorists. The imperative facing South Africa to achieve a more equitable and sustainable economy is essentially the challenge to adopt and implement a development approach that will reduce poverty and inequality to the greatest extent. It is within this context that the South African government has sought to incorporate local economic development into their economic development framework, predominantly through the decentralisation of development control and planning to the local government level. This dissertation seeks to examine the potential for South African local government to have a positive impact on economic development through fulfilling the roles and responsibilities provided in the government's mandate for developmental local government. The analysis focuses on the local economic development strategy adopted by the Ingwe Municipality, with specific attention given to the diversification of their economy through the tourism sector. The dissertation seeks to identify key lessons and contributions for local economic development that Ingwe has to offer, as well as providing recommendations for the Ingwe municipality's benefit. An extensive range of research methodologies, including interviews, questionnaires, secondary data analysis and literature reviews, were employed in this study. Analysis and evaluation of the Ingwe Municipality's local economic development strategy was achieved using the Sustainable Livelihoods Framework and the guidelines set out by Nel (1999). This dissertation revealed the potential that does exist within local government to play a developmental role. The Ingwe experience illustrates the benefits gained when local leadership and vision is extended on behalf of the local communities. Through the acquisition of funds and the formation of public and private partnerships, the Ingwe Municipality has created an economic environment conducive to further economic growth through the avenue of tourism. While success cannot be guaranteed, the Ingwe Municipality is evidence of the potential that does and can exist within local government to embark on innovative pro-poor development initiatives