Abstract The aim of this research analyses municipal economic development capacity, using Ekurhuleni Metropolitan Municipality (EMM) as a case study. The research report endeavours to find out whether EMM’s Local Economic Development (LED) unit is adequately equipped to implement the Policy Guidelines for Implementing Local Economic Development in South Africa (a draft LED policy). This report argues that municipalities must be well resourced or capacitated to implement local economic development. However, the capacity problem has been a serious challenge in South Africa, particularly on issues of service delivery, nevertheless, studies have not adequately been done in relation to municipal capacity to implement LED. Additionally, this report established an understanding with regard to the role of municipalities in implementing LED. The report also discusses challenges confronting EMM’s LED unit as an institution to promote LED within the metro. However, this report also concludes that EMM’s LED unit is one of the well performing, perhaps resourced municipalities in terms of LED implementation.