Micro and small enterprises are seen as an emerging private sector, forming the basis forrnprivate sector led growth by providing employment, alleviating poverty, ensuring foodrnsecurity, and private sector development. Practically, the increasing rate of unemployment, therngap between the rich and the poor, corruption and good governance problems need leaderâ€™srnintervention. The purpose of this study was to investigate the role of leaders in MSEsrndevelopment and fill the gap in the city administration. This study employed a descriptivernsurvey research design. As the scope covers all the ten sub-cities of Addis, six offices thosernwere responsible for the development of MSEs purposely selected and represented by theirrnheads, professional experts, Women associations, youth forum and council representatives whornparticipate on the work were involved and three enterprises heads and one of their membersrnwere reflected their view on the roles of leaders on the development of micro and smallrnenterprises. The sample comprised a total of 191 respondents. Primary data were collectedrnthrough questionnaire, interview, and focus group discussion while the secondary data wasrncollected from performance reports. Findings revealed that local economic development whichrnwas used as an approach in the city administration, has given due attention to the importance ofrnproactive management in the development of micro and small enterprises. As a result, all of thernleaders in the sub cities were striving to succeed in the development frame set and majority ofrnthem had achieved better on financial support, working and selling area provision and marketrndevelopment. But there are gaps on entrepreneurship and enterprise development, one windowrnshopping service center development, industry extension service development and institutionalrncapacity development in order to realize the development of MSEs. Based on the findings, thernstudy concluded that there were internal and external constraining challenges that hinder thernleaders` performance. These challenges arise from the enterprises, Some others fromrnstakeholders and still from the leaders themselves. The critical challenges those arise from allrnparties were mainly because of the attitude they have and some of them might be related tornknowledge, technology and skills of all stakeholders. Therefore, the city administration shouldrnbuild the capacity of the leaders to make them play their roles in all aspects and the leadersrnshould identify their gaps, plan them in priorities to take appropriate actions to their context.rnFinally leaders have to play key roles in coordinating all the stakeholders as well as nationalrnand local partners to come up with successful enterprises that can contribute to the localrneconomy and sustainable economic development at large.