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#BudgetSpeech2022: Feed tourism and it will deliver on its economic promise - Fedhasa

As South Africans wait anxiously to hear whether Finance Minister Enoch Godongwana's 2022 Budget Speech will bring tax relief or a further tax burden, the country's tourism and hospitality industry is holding its breath to see whether it will be more than a footnote mention.
Source: Supplied
Source: Supplied

In former Finance Minister Tito Mboweni’s 2021 budget speech, the Department of Tourism was said to have reprioritised R540m over the medium term to establish the Tourism Equity Fund (TEF) as one of the measures to support the tourism sector recovery. A court battle in 2021 to rule on the legality of the requirement for firms to be at least 51% black-owned and controlled has now led to the establishment of a panel to reassess the fund and criteria – a year down the line. That was the only mention of tourism in the budget speech.

"Tourism’s rich potential to create jobs as South Africa’s second-highest GDP earner is continuously stymied, not least because it gets so little budget or indeed attention to unlock the critical factors required for its success, such as visa waivers and a best-of-breed, functioning eVisa system," says Rosemary Anderson, Fedhasa National Chairperson.

"Our new online visa application system, announced at SONA by President Cyril Ramaphosa, is not still not operational, and this is a major obstacle to attracting large markets such as India and China. Our current compulsory PCR test requirement is a further significant deterrent and then there are those Departments not functioning as they should - namely to facilitate the provision of licences timeously, such as the Liquor Boards and National Public Transport Regulator. In addition to these obstacles, are the low budgets allocated for tourism marketing, as South Africa competes with long-haul destinations whose budgets far exceed ours to create awareness of its international appeal."

Creating an enabling environment for growth

"Tourism needs an all-of-government approach to create an enabling environment to flourish and to achieve the Department of Tourism’s stated goal of 21 million tourist arrivals by 2030. Every Minister should be reviewing whether their departments are in fact hampering tourism or stimulating it. If one considers that each tourist generates between seven and 10 jobs, giving tourism the oxygen it needs – not only in terms of budget, but also government attention – is low-hanging fruit to turn around the incredible levels of unemployment in South Africa that President Ramaphosa says is keeping him up at night," says Anderson.

In 2014, travel and tourism’s contribution to employment was estimated to be larger than the individual contribution of the agriculture, automotive manufacturing, chemical manufacturing and mining sectors. Some 1.5m total (direct and indirect) jobs were said to have been supported by tourism as the pandemic hit and the sector is a significant employer of women (70%) and youth (60%). By nature of its geographic distribution and low barriers to entry, tourism also generates economic activity, SME opportunities and employment for low- and semi-skilled workers in rural and remote areas with the greatest need.

Further, tourism has a deep and wide value chain, which offers many SME opportunities, from vehicle manufacturing for the car rental industry to textile manufacturers producing the linen that accommodation providers and restaurants buy. For every direct job created in the tourism sector, one additional job is created on an indirect or induced basis, making its linkages stronger than in the agriculture and education sectors.

When tourism’s environmental, social, economic and other constraints are addressed, it has the power to energise economies, which is something that former Minister Mboweni himself recognised in his paper "Economic transformation, inclusive growth and competitiveness: A contribution towards a growth agenda for the South African economy" published in 2019.

"Tourism is more than ‘living your best life’ on holiday with family and friends. It’s about inclusive economic growth, massive job creation and exports. It’s about trade, travel for business, aviation, accommodation and restaurants. Consequently, it should be more than a footnote. Feed tourism and will deliver on its economic promise,” Anderson concludes.

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