THE BMZ ACADEMY
THE BMZ ACADEMY
053 8213
BMZ ACADEMY 061 262 1185/068 053 8213Page 1 of 11
, THE BMZ ACADEMY
Question 1
To support economic resilience in Mitchells Plain, interventions must inject money into
the circular flow and stimulate local production. Two highly effective interventions
would be:
Government Investment in Local Infrastructure (Injection - Investment 'I')
A government-funded programme that focuses on upgrading basic infrastructure such
as water supply, electricity networks, and public spaces combined with targeted
investment in human capital through skills training, can significantly stimulate
economic activity. In the short term, such an initiative directly injects money into the
economy by creating local employment opportunities and generating household
income through factor payments (wages, rent, and returns to capital).
In the longer term, improved infrastructure enhances efficiency and accessibility, while
a skilled workforce increases the adaptability and productivity of labour. These
improvements collectively strengthen the competitiveness of local businesses,
enabling them to operate more efficiently, reduce costs, and expand output. As a
result, the economy becomes more resilient to external shocks and better positioned
for sustained economic growth.
Support for Local Enterprise Development (Stimulating Production)
Establishing grant and low-interest loan schemes for small, medium, and micro-
enterprises (SMMEs), alongside a “buy local” campaign, can serve as a powerful
stimulus for local economic development. By improving access to finance, SMMEs are
better positioned to expand operations, increase output, and hire additional workers.
This generates higher business revenues and raises factor payments to households
in the form of wages, rent, and returns on capital. At the same time, a strong emphasis
on local procurement ensures that household and business spending remains within
the community rather than leaking out through imports from other regions or countries.
This circulation of income within the local economy strengthens the internal market,
supports sustainable demand, and fosters greater business confidence. Over time,
such interventions not only promote employment and income generation but also
2|Page BMZ ACADEMY 061 262 1185/068 053 8213
THE BMZ ACADEMY
053 8213
BMZ ACADEMY 061 262 1185/068 053 8213Page 1 of 11
, THE BMZ ACADEMY
Question 1
To support economic resilience in Mitchells Plain, interventions must inject money into
the circular flow and stimulate local production. Two highly effective interventions
would be:
Government Investment in Local Infrastructure (Injection - Investment 'I')
A government-funded programme that focuses on upgrading basic infrastructure such
as water supply, electricity networks, and public spaces combined with targeted
investment in human capital through skills training, can significantly stimulate
economic activity. In the short term, such an initiative directly injects money into the
economy by creating local employment opportunities and generating household
income through factor payments (wages, rent, and returns to capital).
In the longer term, improved infrastructure enhances efficiency and accessibility, while
a skilled workforce increases the adaptability and productivity of labour. These
improvements collectively strengthen the competitiveness of local businesses,
enabling them to operate more efficiently, reduce costs, and expand output. As a
result, the economy becomes more resilient to external shocks and better positioned
for sustained economic growth.
Support for Local Enterprise Development (Stimulating Production)
Establishing grant and low-interest loan schemes for small, medium, and micro-
enterprises (SMMEs), alongside a “buy local” campaign, can serve as a powerful
stimulus for local economic development. By improving access to finance, SMMEs are
better positioned to expand operations, increase output, and hire additional workers.
This generates higher business revenues and raises factor payments to households
in the form of wages, rent, and returns on capital. At the same time, a strong emphasis
on local procurement ensures that household and business spending remains within
the community rather than leaking out through imports from other regions or countries.
This circulation of income within the local economy strengthens the internal market,
supports sustainable demand, and fosters greater business confidence. Over time,
such interventions not only promote employment and income generation but also
2|Page BMZ ACADEMY 061 262 1185/068 053 8213
