It has been recognized in several countries that governments need to intervene in order to help socially and economically disadvantaged individuals in the society to compete in the economy with those who have gained historical advantage. Governments have changed legislation in favour of the disadvantaged, so that to ensure that they participate in the economy in a more fairly manner and the standards of living of their communities are improved. Local Government at the City of Tshwane Metropolitan Municipality has been given a greater responsibility in relation to Local Economic Development. A major challenge is encountered given that the new areas, which were, integrated recently, lack infrastructure and are rural in nature. Preferential procurement has been identified as a tool of socio-economic development in South Africa. However, a policy needs to be done, properly implemented, and monitored so that it can achieve the desired results. / Dissertation (MCom (Business Management))--University of Pretoria, 2006. / Business Management / unrestricted