OVERSIGHT IMPLICATIONS OF SONA 2017 ON THE

TOURISM SECTOR

Dr Sibusiso Khuzwayo

17 February 2017

Committee Section 1
 Table of contents
• Introduction
• Socio-economic case for tourism
• Tourism SMMEs
• Oceans economy
• On the SKA and tourism linkages
• On investments
• Possible interventions to harness benefits of the investment plan
• Minimum wage and labour issues
• Effects of drought in the sector
• On tourist arrivals
• On radical socio-economic transformation
• On Land reform
• Recommendations
Committee Section 2
 Introduction
• Tourism is a multi-sectoral economic activity

• Other sectors act as anchors, facilitators and enablers of tourism

• Policy decisions can either promote or destroy tourism

• The tourism industry is extremely vulnerable to economic, social,

and political changes in either the generating or host countries.

• Various aspects of SONA 2017 have direct and indirect impact on

tourism

Committee Section 3
 Socio-economic case for tourism
“Guided by the National Development Plan, we are building a South Africa
that must be free from poverty, inequality and unemployment….”

The latest Tourism Satellite Account released by Stats SA in December 2016

indicates that:
• Contribution to GDP - increased from R83.9 billion in 2011 to R118.9
billion in 2015.
• Employment
o The industry created 32 186 new jobs in 2015
o Currently, one in 22 employed people in South Africa works in the
tourism industry, representing 4.5 percent of the total workforce.

• The Expanded Public Worked Programme (Social Responsibility

Programme) is used by the Department of tourism to create much needed
jobs in poor communities. Committee Section 4
 Socio-economic case for tourism
“The focus areas include industrialisation, mining and beneficiation, Agriculture and
agro Processing, energy, SMMEs, managing work place conflict, attracting
investments, growing the oceans economy and tourism….”

• Tourism is performing better than other economic sectors such as agriculture and
mining

International and National significance of the tourism sector:

• Sustainable Development Goals

o Goal 8: Promote inclusive and sustainable economic growth, employment
and decent work for all
o SDG 8.9 - by 2030, devise and implement policies to promote sustainable
tourism that creates jobs and promotes local culture and products.
• National Development Plan
• Medium Term Strategic Framework
• National Tourism Sector Strategy
• Provincial Tourism Plans
• Local Government Tourism Plans
Committee Section 5
 Tourism SMMEs
• SMMEs
o Current interventions are disjointed

o Need for more incubators throughout the country

o Need for diversification of tourism SMMEs – niche markets

o Oversight over the implementation of the Skills Audit outcomes

o Need for intense oversight on SMME programmes

- Planned Joint Committee Meeting with the PC on Small
Business Development
- Structured and focussed engagement with SMMEs when
conducting oversight visits
- Department of Tourism to conduct impact analysis of its
SMME programmes

Committee Section 6
 Oceans economy
• Marine and coastal tourism has tended to benefit coastal cities with
well developed infrastructure, such as Durban and Cape Town.

• Tourism has a huge potential for given some 2 798 km coastline.

• All coastal provinces have a potential develop marine/ coastal

tourism.

• The Department should provide feedback to the Committee on the

Tourism Oceans Phakisa initiative – implementation of the
recommendations of the Marine Tourism Lab.

• The Committee to conduct continuous oversight on tourism ocean’s

economy
Committee Section 7
 On the SKA and tourism linkages

“Together with its precursor, the MeerKAT telescope, the SKA project
continues to make important contributions to socio-economic development
in South Africa. Working closely with the industry, the Department of Science
and Technology is implementing a technology localization strategy. This has
ensured that the two billion rand MeerKAT telescope is constructed with
seventy five percent local content….”

• The SKA provides opportunities for adventure tourism, including star

gazing.
• The Department should provide information on tourism economic linkages
leveraging on the SKA.
• The Committee to visit the SKA when conducting oversight to the
Northern Cape for tourism linkages.

Committee Section 8
 On investments
“On Investment promotion, Government has established InvestSA, an
investment One Stop Shop nationally and will open provincial centres in
KwaZulu-Natal, Gauteng and the Western Cape. The message is clear
to the affected government departments. There must be no undue
delays and no unnecessary red tape. From issuing licences to visas,
we should make it easy to do business in South Africa…”

The plan involves:

• The establishment of an Invest SA One-Stop Shop

• Taking advantage of tourism as a job driver
• Scaling up the Expanded Public Works Programme
• Using public infrastructure as a way to create work opportunities

Committee Section 9
 Possible interventions to harness
benefits of the investment plan
• Maximise impact of Meetings Africa and other investment platforms

• Necessity to develop tourism investment portfolios at a national and

provincial level to lobby investments

• Engage municipalities to develop investment portfolios based on

their local tourism strategies.

• Department to determine the viability of including South African

Tourism on investment missions

Committee Section 10
 Minimum wage and labour issues

“Unity in action was also demonstrated again this week with the
conclusion of the agreement on the National Minimum Wage and on
measures to stabilise labour relations…”

o Oversight over the implementation of the minimum wage vs current sector

determination by the Department of Labour

o Potential labour unrest

- concerns that the sector employs foreign nationals vs SA citizens
- flouting of national labour laws

o Need to engage the Departments of labour and Home Affairs to understand

the employment patterns for foreign nationals in the sector

o Interventions – Department of Home Affairs currently consulting with the

sector on the issue of illegal foreign employees
- Need for follow up by the Committee on the interventions by the
Department of Home Affairs

Committee Section 11
 Effects of drought in the sector
“In an effort to curb the high water losses which in some municipalities
far exceeds the national average which is currently at 37%; about ten
thousand unemployed youth are being trained as plumbers, artisans
and water agents. More will be recruited this year to reach the total of
fifteen thousand….”

• Lack of water in some destinations such as the Elephant Coast in northern

KwaZulu-Natal
• The City of Cape Town has approved the implementation of tougher water
restrictions on the use of potable water for non-essential use. As from 1
February 2017, the City is implementing Level 3b restrictions.
• Drought is not a once off phenomenon and this calls for more innovations in
the sector to ensure minimum water usage and prevent wastage
• For example, Hotel Verde near the Cape Town Airport is Africa's greenest
hotel and has adopted genius water saving strategies – Committee to visit
when conducting oversight in Western Cape
Committee Section 12
 Pumped water for wildlife

In 2015 kuMasinga Hide in iSimangaliso’s uMkhuze section was supplied with pumped
water to assist in times of low rainfall. The wildlife and bird sightings there are incredible
and a huge draw card for tourists.

Committee Section 13
 Hotel water saving innovations

This 40,000 litre stainless steel tank stores rainwater and sub-soil drainage
water and is used for irrigation, car-washing and external cleaning

Committee Section 14
 Hotel water saving innovations

The dual flush toilet is supplied with biologically recycled grey water
from showers and baths
Committee Section 15
 On tourist arrivals
“We had identified tourism as a key job driver. We are thus pleased that our
tourist arrival numbers for the period January to November 2016 increased to
nine million, an increase of just over one million arrivals from 2015. This
represents a thirteen percent growth in tourist arrivals…”

• The tireless work of government and private sector is commendable in

turning the tourist arrivals around.
• The country has weathered the unintended consequences of immigration
regulation introduced in 2014.

Year Tourist Arrivals

2013 9.6 million
2014 9.5 million
2015 8.9 million, a decline of -6.8 percent from 2014
2016 9 million, an increase of 13 percent
Committee Section 16
 On radical socio-economic
transformation
“The skewed nature of ownership and leadership patterns needs to be
corrected. There can be no sustainability in any economy if the majority is
excluded in this manner. In my discussions with the business community, they
accepted these transformation imperatives. Today we are starting a new
chapter of radical socio-economic transformation. We are saying that we
should move beyond words, to practical programmes….”

• The tourism sector is still untransformed

• Need to conduct oversight on the implementation of the newly gazetted
Tourism B-BBEE Sector Codes, e.g. the Department to conduct a study on
the state of transformation in the sector
• Opportunities – innovation between government and private sector in
implementing the Enterprise and Supplier Development Programme
• Department to consider developing large impactful SRI community
projects to influence ownership trends
• Enhance support to tourism SMMEs
• Enhance support to rural and community projects. e.g. township tourism
(such as Vilakazi Street in Soweto, KwaMax in uMlazi, KwaMzoli in
Gugulethu, etc)
Committee Section 17
Max’s Lifestyle - Umlazi

Committee Section 18
Mzoli’s - Gugulethu

Committee Section 19
Soweto

Committee Section 20
 On Land reform
“It will be difficult if not impossible, to achieve true reconciliation until
the land question is resolved. Only eight million hectares of arable land
have been transferred to black people, which is only 9.8 percent of the
82 million hectares of arable land in South Africa….”

• Some of land affected by land claims include tourism activities.

• Some communities have benefited, e.g. Phinda game reserve in
KZN
• Some communities have not benefitted maximally, e.g. Mnisi Resort
in Bushbuck Ridge, Mpumalanga
• Opportunities:
– Ecotourism
– Co-management agreements
– Exploring wildlife economy, e.g. wildlife auctions, canning hunting, trophy
hunting, venison, photography
• The Department to enhance models of community-based tourism,
especially in areas affected by land claims
Committee Section 21
 Wildlife value chain

Source: DEA Green Economy Wildlife Based Land Reform Programme (2014)
Committee Section 22
 Recommendations
It is recommended that the Committee considers SONA 2015 as a
government guiding policy statement for the year ahead and :

• Ensures that the revised Strategic Plan and Annual Performance

Plan for 2017/18 take the 2017 State of the Nation Address into
account.

• Conducts oversight on all the matters raised in the SONA 2017 in

the 2017/18 financial year.

Committee Section 23
Thank you

Committee Section 24