27 January 2021
Staff Reporter/ PretoriaLIVE
Pretoria – President Cyril Ramaphosa on Tuesday launched the Tourism Equity Fund, a fund which is aligned with the National Tourism Sector Strategy 2016-2026, which places significant emphasis on a transformative and inclusive tourism economy.This fund came after the realization of the role with which the Tourism sector plays in the economy.
For a long time black players in the Tourism sector were being marginalized and preferential treatment was accorded to whites only, but this Fund will facilitates the participation of black entrants, but also, more importantly, businesses owned by women and persons with disabilities.
President Ramaphosa said, “This Fund is aligned with the National Tourism Sector Strategy 2016-2026, which places significant emphasis on a transformative and inclusive tourism economy.”
One of the five pillars of this Strategy addresses is the issue of broad-based benefits in the tourism sector.
“It specifically focuses on transformation, rural and township tourism development.These are areas that have always been ignored, neglected and pushed to the periphery. Now their time has come.” Ramaphosa said.
The President explained that the historic launch of the Fund is taking place when the tourism industry is admittedly facing severe challenges. The COVID-19 pandemic has disrupted activity across the economy.
But the nature of the pandemic,together with restrictions to protect public health,has dramatically impacted the tourism industry negatively; from the smallest B&B to major hotel chains, from local tour companies to airlines.
Many establishments have had to contend with cancellations of bookings or deferred travel.
“The Tourism Equity Fund is informed by the recognition that the capital-intensive nature of the industry prevents many black-owned tourism enterprises from growing and developing.”
“By providing access to finance for black-owned commercially viable tourism projects, the Tourism Equity Fund intends to address this challenge.” said Ramaphosa.
As a combination of grant funding, concessionary loans and debt finance, the Fund will cater to the specific needs of black-owned businesses to acquire equity, invest in new developments or expand existing developments.
The President maintained that mostly black participants to benefit from the Tourism Equity Fund will access funds through commercial banks to ensure viability, transparency and to avoid any leakages.
“A vital element of the operation of the Tourism Equity Fund is the involvement of commercial banks, which will ensure that participants are able to access further loan financing.”
“This will significantly increase the impact and reach of this initiative – and increase the level of private investment in the industry.” The President said.
“This partnership between government, public entities and commercial banks is a great example of the kind of collaboration that is required as we forge a path towards a sustainable economic recovery.”
Ramaphosa said, “We are committed to ensuring that this Fund enables black business to substantially benefit from the tourism economy, not to be roped in by fronting companies, or to be marginal bystanders and small-scale suppliers to larger tourism enterprises.”
South Africa’s tourism base is significant, and we are one of the world’s most popular long-haul destinations.
The President explained that Tourism is a sector that is labour-intensive and therefore has immense job creation potential.
It supports a vibrant and complex value chain.
It generates foreign direct investment and significant export earnings for our country,
It stimulates and supports the development of small businesses.