R120m fund for small tourism businesses

Small and medium enterprises in the tourism sector are set to benefit from a R120 million fund, which has been allocated for these businesses.  

Addressing a pre-budget vote media briefing in Cape Town on Tuesday, Tourism Minister Tokozile Xasa said her department has entered into a partnership with the National Empowerment Fund (NEF) to establish a Transformation Fund.

“The fund is currently capitalised to an amount of R120 million, with the aim of building it to R360 million in the medium term. A combination of grant funding and debt financing will be used to drive sector transformation and unlock capital investment in tourism,” Minister Xasa said.

She noted that funding was a challenge in the tourism sector and it restricts growth of small and medium enterprises, as well as the expansion of their existing products.

The fund includes NEF equity, debt and National Department of Tourism (NDT) grant funding. The grant funding will be capped at R5 million. It will be accessible in the second quarter of the 2017/18 financial year.

In pursuit of the transformation agenda, the department will be implementing its transformation plan, which was developed under the guidance of the Tourism Broad Based Black Economic Empowerment Charter Council.

“Empowerment of women is central to our transformation agenda. We will continue with our Women in Tourism Programme. Women in tourism are mobilised behind representation, recognition/reward and respect,” Minister Xasa said.

The recent launch of the ‘30 in 5’ campaign at the Tourism Indaba 2017 will be implemented in the next five years. The campaign is aimed at increasing the representation of women in senior positions by 30 percent in the next five years.

Furthermore, the department will host a national conference on transformation in the tourism sector in the third quarter of the 2017/18 financial year. It is intended to improve compliance and commitment to an inclusive tourism economy.

Developing rural, township tourism

 The Department of Tourism is also developing a framework for precinct development, with emphasis on township and rural tourism.

“Initial efforts will be focused on Vilakazi Street in Soweto, with a view to replicate the model in other viable townships across the country. The combination of Vilakazi Street residents’ entrepreneurial spirit and the uniqueness of this very special place -- once home to two Nobel Peace Laureates and one of a kind in the world -- has created a vibrant and globally sort after tourism attraction. This amplifies the need for a targeted approach to precinct development,” Minister Xasa said.

She said her department will use its budget of R2.1 billion to ensure that as tourism rises, the people of South Africa rise with it. Marketing will take the largest component of this budget at 53% or R1.1 billion.

"The remaining R1 billion is largely distributed amongst Tourism Incentives, Expand Public Works Programme (including skills development), Destination Development and Enterprise Development,” Minister Xasa said.

Working for Tourism 

Through the implementation of the Working for Tourism programme, the department will create 3 347 full-time equivalent jobs through both infrastructure and skills development programmes.

“Based on our experiences, we have put in place systems and capacity for effective implementation and future commercial sustainability of our product based expanded public works projects.

“We have also adopted a zero-tolerance stance on poor performance by contractors with consequence management in such cases,” Minister Xasa said.

The department will also pursue partnerships with other government institutions to scale up the intake of its skills development programmes.