Small, Medium, and Micro Enterprises (SMMEs) are widely recognised as critical drivers of job creation, poverty alleviation, as well as Local Economic Development (LED) in South Africa. Despite this potential, SMMEs continue to experience high failure rates. This article evaluates the impact of SMMEs on LED, thus examining the challenges affecting their sustainability with the Nelson Mandela Municipality. Adopting a qualitative study approach, this research was based on semi-structured interviews with 12 SMME owners and managers operating across diverse sectors. The findings reveal that SMMEs make a significant contribution to job creation and skills development; however, their growth is constrained by institutional and structural barriers. This article identifies a disconnect between municipal policy intentions and the lived realities of small business operators. Therefore, concluding that the developmental potential of SMMEs in Nelson Mandela Bay can only be realised through improved governance, streamlined regulatory processes, financial support, and strategic investment in local infrastructure.
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