By OBAKENG MAJE
Minister of Tourism, Mmamoloko Kubayi-Ngubane said the Tourism Equity Fund worth R1.2 billion will alleviate poverty, fight inequality, create jobs, and promote the growth of black-controlled tourism enterprises.
Kubayi-Ngubane said this during the launch on Tuesday. She said the launch has been established by the Department of Tourism, in partnership with the Small Enterprise Finance Agency, which falls under the Department of Small Business Development.
“The Tourism Equity Fund is a dedicated fund that will provide a combination of debt finance and grant funding to facilitate equity acquisition as well as new project development in the tourism sector by black entrepreneurs.
“In this partnership, the fund will be managed by sefa on behalf of the Department of Tourism over the initial three-year period of which after that, we will evaluate to improve the fund,” said Kubayi-Ngubane.
She further said during this three year period, the Department of Tourism will capitalise the fund with an amount of R540 million. Kubayi-Ngubane added that the funding from the department will be matched with a contribution of R120 million from sefa and R594 million from commercial banks that will be participating in this programme.
“This combination will put the value of the Tourism Equity Fund at just over R1.2 billion. The fund will be commercially viable and sustainable for the majority of Black-owned tourism enterprises with a minimum of 51% black ownership including enterprises in rural areas and townships.
“It will also de-risk the funding provided to tourism enterprises through patient capital that will ease the debt repayment ability of black-controlled enterprises. The fund will facilitate the participation of targeted groups such as women and youth in the priority tourism sectors as defined by the B-BBEE sector codes,” she said.
Kubayi-Ngubane said they are also excited to announce that they have opened the call for proposals from entrepreneurs who have projects that need funding. She said the team is ready to receive proposals and get the programme rolling.
“The details of the requirements and where to send proposals will be published on various media platforms. The tourism sector in South Africa is largely private sector owned and driven, and its contribution to the South African economy has grown tremendously since the 1994 democratic breakthrough.
“In addition to the beautiful landscapes, the long coastline, and the wildlife, South Africa is also endowed with rich biodiversity and a cultural diversity that makes South Africa one of the world’s most sought after tourism destination. This is because these endowments combine to make South Africa’s tourism attractions more diverse than other tourist destinations,” said Kubayi-Ngubane.
She said the outbreak of the COVID-19 pandemic has brought the tourism sector to a grinding halt for most of last year and still continues today. Kubayi-Ngubane said the COVID-19 pandemic outbreak has reduced the number and diversity of tourism attractions.
However, the Democratic Alliance (DA) Shadow Minister of Tourism, Manny de Freitas said they do not believe that the fund will meet its intended targets of boosting South Africa’s tattered tourism industry through improving the participation of black entrepreneurs in the sector.
“While it is important that there are continued efforts to strengthen the participation of emerging entrepreneurs, it cannot happen at the expense of the tourism industry as a whole. As always, the government’s solutions for tourism remain one-dimensional – as if funding is the be-all and end-all to making tourism enterprises successful.
“The irony seems to be missed by the government in that it was their illogical lockdown regulations that decimated the sector and killed a million jobs. Another irony missed by Ramaphosa, who described the tourism sector as “resilient” by nature, was that the resilience that he describes within tourism is despite the government not because of it,” de Freitas said.
The Guardian 