The Deputy Minister said that the South African economy was not growing as it should. However tourism growth was good. Tourism had created 700 000 job and contributed 9% to SA’s Growth Domestic Product. The past year had been tourism’s seventh year of sustained growth. There was a 13% growth in international tourist arrivals. Transformation in the tourism sector was a priority. The National Tourism Sector Strategy had been approved by Cabinet in 2011 and was going through a review.
Reporting on its Quarter 1 Performance for 2017/18, the Department of Tourism said that in terms of overall performance for the period 1, 81.16% of targets had been achieved, 15.94% not achieved with significant work done and 2.90% not achieved.
The Performance information per Programme highlighted the following:
Programme 1: Corporate Management
Quarter 1 targets of having minimum 50% women representation at Senior Management Service (SMS), 3% people with disabilities and 91.5% black representation had been surpassed with actual performance sitting at 54.4%, 4.5% and 95.5% respectively. However the Quarter 1 target of not having the vacancy rate exceed 8% had not been met with the vacancy rate at the end of June 2017 being 14.8%.
Programme 2: Tourism Research, Policy and International Relations
All targets except one had been met for Quarter 1. Under expenditure was around R450 000 which was due to currency fluctuations.
Programme 3: Destination Development
The Quarter 1 target to develop a concept document and business case for the Indi-Atlantic Route was met. However the appointment of a service provider to conduct a demand and supply analysis for the Indi-Atlantic Route had not been done but the terms of reference had been finalised and approved.
Programme 4: Tourism Sector Support Services
Of the 27 targets for the Quarter, 23 had been achieved, 2 had not been achieved and 2 had significant work on them done. The Quarter 1 target of having the Draft Tourism Transformation Indaba concept document and draft programme developed had been met.
The NDT was asked to shed light on e-visas matter. Given that the Department of Home Affairs (DHA) was to roll out a pilot project on e-visas in March 2018 members asked that the Committee be given a full briefing on the implementation of the pilot project. How would the pilot project work? Members had observed that Turkey was doing quite well with the use of e-visas. The NDT and the DHA had to work together on implementation whilst making it easier for tourists to select SA as a destination. Members however cautioned that e-visas needed to have a safety mechanism worked into the system so as to prevent unsavoury elements from causing harm in SA. Concerns were raised about the lack of uptake on programmes on offer in the Northern Cape Province. The NDT was asked what it was doing about targets that had not been met on job creation. The Committee asked to be updated on the amendments to the Tourism Act. Members asked what active bilaterals were the NDT engaged in. Members on domestic tourism still felt strongly that dual pricing needed to be applied in SA. Had the NDT considered dual pricing? India was doing quite well with the imposition of dual pricing. Research had shown that there were benefits on the imposition of dual pricing. Members were concerned about the recurring challenges relating to the implementation of the Expanded Public Works Programme (EPWP). The problem was that beneficiaries on the ground were bearing the brunt. The stipend that beneficiaries were paid, contributed towards the alleviation of poverty. Were there no alternative ways that the EPWP could be implemented? Members suggested that perhaps the middleman could be taken out of the equation. Was it not possible for the Department of Public Service and Administration (DPSA) to have a section that could deal with EPWP projects? Members observed as far as the Brazil, Russia, India, China and SA (BRICS) Agreement were concerned not much had been done on tourism. Now that SA was in the driving seat at the BRICS, what plan of action could be introduced? Another concern that members had was that taxpayers’ funds were used to pay for SA’s membership to organisations when there was no real benefit for SA to belong to them. Major concern was raised about the congestion at airports like Cape Town International and OR Tambo International. The NDT was asked who could be blamed. Was there perhaps a need for airports to be expanded? Members felt that the congestion was going on for too long. How could the blockages be unblocked? The NDT was asked how it reprioritised its expenditure when in 2016/17 it had a shortfall of R89m, which National Treasury had not rolled over.
Apologies were tendered for the Minister of Tourism, Ms Tokozile Xasa.
Opening remarks by Deputy Minister
Ms Elizabeth Thabethe, Deputy Minister of Tourism, said that Quarter 1 covered the first three months of the financial year from 1 April 2017 to 30 June 2017. The briefing would speak to the performance of the NDT. The NDT was accountable and transparent. Tourism was important for the economy of SA. The South African economy was not growing as it should. However tourism growth was good. Tourism had created 700 000 job and contributed 9% to SA’s Growth Domestic Product (GDP). The past year had been tourism’s seventh year of sustained growth. There was a 13% growth in international tourist arrivals. Transformation in the tourism sector was a priority. The National Tourism Sector Strategy (NTSS) had been approved by Cabinet in 2011 and was going through a review. There was a process of consultation in terms of the NTSS. Stakeholders had made comments. The NTSS was being submitted to cabinet so that it could be gazetted. The NTSS was still a guiding document. The Department was required to have good corporate governance in place. She concluded by stating that the Committee’s oversight role assisted the Department.
Briefing by National Department of Tourism (NDT) on its Quarter 1 Performance
The delegation comprised of Mr Victor Tharage Director General, Ms Morongoe Ramphele, Deputy Director General: Tourism Sector Support Services, Ms Aneme Malan, Deputy Director General: Tourism Research, Policy and International Relations, Ms Lerato Matlakala, Acting Deputy Director General: Destination Development, Ms Lulama Duma Deputy Director General: Corporate Management, Mr Monith Maharaj, Acting Chief Financial Officer, Ms Nomzamu Bhengu, Chief Director: Strategy and Systems and Ms Petra van Niekerk, Parliamentary Liaison Officer: Office of the Director General.
On overall performance for Quarter 1, 81.16% of targets had been achieved, 15.94% not achieved with significant work done and 2.90% not achieved. Performance information per Programme was presented by the Deputy Director Generals responsible.
Programme 1: Corporate Management
Ms Duma stated that 76% of targets had been met for this programme. Quarter 1 targets of having minimum 50% women representation at Senior Management Service (SMS), 3% people with disabilities and 91.5% black representation had been surpassed with actual performance sitting at 54.4%, 4.5% and 95.5% respectively. In addition the target of having 100% procurement from Broad Based Black Economic Empowerment (BBB-EE) compliant businesses had been met. However the target of not having the vacancy rate exceed 8% had not been met with the vacancy rate at the end of June 2017 being 14.8%. The reason for the huge increase was due to the restructuring process that the NDT had gone through. A bulk internal recruitment drive within the NDT had since commenced. Mr Tharage added that the Quarter was characterised by a move from the NDT’s old structure to its new structure. People were still getting to grips with the new structure.
Programme 2: Tourism Research, Policy and International Relations
Ms Malan stated that all targets except one had been met. Under expenditure was around R450 000 which was due to currency fluctuations. The Quarter 1 target of having the logistical arrangements for the National Tourism Stakeholders Forum meeting finalised had been met. Another target met was that the report on the 2016/17 National Tourism Research Seminar had been developed. The target of having the State of Tourism Report (STR) 2015/16 published had not been met. New data had become available and the NDT had decided to update the document with the latest information. The STR after Ministerial approval would be published in Quarter 2.
Programme 3: Destination Development
Ms Matlakala stated that the Quarter 1 target of monitoring the implementation of the Blue Flag Programme at existing 50 beaches had been achieved. The NDT had also managed to develop a concept document and business case for the Indi-Atlantic Route as was planned for the Quarter. However the appointment of a service provider to conduct a demand and supply analysis for the Indi-Atlantic Route had not been done but the terms of reference had been finalised and approved. The Quarterly target of having 463 Full Time Equivalent (FTE) jobs created through the Work for Tourism Programme had been surpassed with 835 FTE jobs having been created.
Programme 4: Tourism Sector Support Services
Ms Ramphele stated that of the 27 targets 23 had been achieved, 2 not achieved and 2 significant work on them having been done. The Quarter 1 target of having the Draft Tourism Transformation Indaba concept document and draft programme developed had been met. In addition, the target of having to identify and engage Development Finance Institutions (DFIs) for possible partnerships had been met with the National Empowerment Fund (NEF) having been identified and engaged. The target of having 60 trainees (20 per quarter) recruited and selected had not been finalised. However the selection criteria had been developed and the training schedule was developed with the National Cleaner Production Centre. The selection of trainees would be finalised in Quarter 2.
Mr Maharaj spoke to the financial performance of the NDT for Quarter 1. As at 30 June 2017 expenditure sat at 40%.
The Chairperson asked the Ministry of Tourism to speak to the issue of e-visas and the Forum for South African Director Generals (FOSAD). The Committee appreciated the efforts of the NDT on Robben Island. Solo power on Robben Island had replaced diesel power. The Committee was however concerned about the lack of uptake of programmes in the Northern Cape Province. The NDT was doing well on full time equivalent jobs but needed to catch up on targets that had not been achieved. The Committee asked to be updated on the amendments to the Tourism Bill. Members were aware that the NDT and SA Tourism were affiliated to the United Nations World Tourism Organisation (UNWTO) and to Regional Tourism Organisation of Southern Africa (RETOSA). Members asked what active bilaterals the NDT was engaged in.
Mr Tharage, on partnerships with various countries, stated that the NDT had been in China at the UNWTO sitting. There was a bilateral with the Chinese. The Chinese were concerned about the safety of their citizens visiting SA. Minister Xasa had given the Chinese assurances that SA was safe. Once the assurance was given that SA was safe it was as if a switch had been flipped to say all was safe, there was an immediate increase in numbers to SA. Having good relations did bear fruit. Robben Island even had a tour guide that spoke fluent mandarin. Assessments were done to see where benefit could be had. He pointed out that how to manage community based tourism projects was the issue. West Africa was another market that was being targeted. Inroads into the Francophone African countries had not yet fully been made.
Mr J Vos (DA) noted that on e-visas, Department of Home Affairs (DHA) had stated that it was intending to rollout a pilot project in March 2018. The Committee needed a full briefing on the implementation of the pilot project. He asked what such a briefing would entail. Would the NDT lead the briefing? How would the pilot project work? He added that technology made it easier to apply for a visa. It also provided a safer mechanism. Turkey was doing well on e-visas. The NDT and the DHA needed to work together on implementation whilst making it easier for tourists to select SA as a destination. However there had to be a safety measure built into e-visas to keep SA safe from unwanted elements. There were elements who wished to enter SA to do harm. On domestic tourism, he still felt strongly about dual pricing. Has dual pricing been considered by the NDT? Dual pricing could initially be tested at government owned entities. This could be a confidence builder for the private sector. The DA had done quite a bit of research on dual pricing. India was doing quite well on dual pricing. Members needed to see positive progress before the term of the Committee was over.
Mr Tharage noted that dual pricing was a policy issue. He would however provide a technical response. The NDT’s assessment showed that there was a sufficient variety of products in SA to cater for various consumer groupings. There was something for everyone. Without mentioning brands he said that a family of four could easily be accommodated for R500 a night. The NDT even in its grading system made provision for different levels of consumptions. On the other side of the spectrum there were hotels in Cape Town that charged between R40 000 – R60 000 a night. Just across the road from one such hotel there were decent self catering places that charged around R1200 for five or six people per night self catering. There was really a wide array of offerings. Dual pricing was already applied at certain attractions within government. At national parks South Africans did not pay the same prices that tourists did. Dual pricing could be watched to see if there was an impact or not. What did dual pricing mean? Would one have to lower prices for South Africans or increase prices for tourists? There were many questions that arose.
Ms Malan was not sure what the next step on e-visas was. The DHA would be better equipped to provide the Committee with detail. The NDT did however work closely with the DHA.
Deputy Minister Thabethe agreed that the Committee needed to be briefed on the e-visa issue. The DHA had to be present at the briefing as well. She suggested that a joint workshop between the Committee, the DHA and the NDT be held. E-visas were a critical issue.
Ms L Makhubele-Mashele (ANC) pointed out that according to the briefing one of the major challenges of the Expanded Public Works Programme (EPWP) was its implementation. The problem however was that beneficiaries on the ground bore the brunt of it. The stipend that beneficiaries depended on was supposed to alleviate poverty. The challenges on the EPWP seemed to be recurring. Were there no alternative ways that the EPWP could be implemented? She suggested that perhaps the middleman could be done away with. Could the Department of Public Service and Administration (DPSA) not have a section that could deal with EPWP projects? The briefing had alluded to the fact that there were delays on the State of Tourism Report (STR). Why was the STR put in as a target when the NDT knew that there could be issues? If not much had been done in relation to tourism on the Brazil, Russia, India, China and SA (BRICS) Agreement now that SA was in the driving seat, what plan of action could be introduced? The concern was that sometimes SA belonged to partnerships or organisations which yielded no benefits yet taxpayers’ money was used to pay membership fees. She was also concerned about the congestion at OR Tambo International and Cape Town International Airports. Passengers often missed their flights whilst waiting in queues. Whose fault was it? Perhaps there was a need for airports to be expanded. It was a challenge for all travellers including members of parliament. The congestion at airports was now going on for three years. How could the blockages be unblocked?
Mr Tharage agreed that on the EPWP there should be continuous evaluation of implementation modalities. He pointed out that there were good and bad businesses to be found in the same model. The empowerment aspect was all about small businesses being able to participate. The issue was about how the consequences aspect could be strengthened when there was breach of contract. Consequences meant that the good would be brought in and the bad would be kicked out. Funds should also be recouped where possible. These types of dynamics would always be there. National Treasury guidelines did provide that where persons were not doing things in good faith that such persons be flagged. Funds for the EPWP were for training, tools of trade and stipends to be paid. Each project had its own characteristics. Coordination was needed. Putting everything together was a challenge. Sometimes EPWP projects were a headache. Because small businesses were being given opportunities monies were advanced to them. In some instances once monies were transferred to businesses they asked to be released from contracts. In other instances small business owners simply disappeared with the monies which necessitated the NDT having to take court action. The point was that sometimes things were beyond the control of the NDT and even its political principals. How did one resolve things?
Ms Malan responded that on the BRICS, tourism had been identified as a strategic sector but nothing had as yet been done. There was no tourism coordinating platform in BRICS. With SA now playing a chairing role it would like to create such platform. The NDT had identified areas of expertise in the BRICS countries. It was a lobbying exercise to create a tourism workstream in the BRICS. The Committee could be presented with the NDT’s strategy on areas that the NDT would like to drive.
The congestion at airports was ongoing work with different partners. At airports there were not enough terminals open and there were not enough DHA staff to man booths. National Treasury had provided earmarked funding to the DHA for staff. The issue was about funding but it was work in progress. She explained that on the STR when new data had become available the NDT had decided against publishing the STR. This allowed the data to be incorporated into the STR even though it meant that it was to be published later.
Ms Makhubele-Mashele pointed out that in 2016/17 the NDT had a shortfall of R89m which the National Treasury had not been able to rollover. How did the NDT reprioritise its expenditure?
Mr Tharage replied that when the year had started there were two things that could happen. The first was if the funds were rolled over all would be fine. The second was if the rollover was not approved then a mitigating plan was needed. The incentives on grading allowed some funds to be recovered. For incentives there was a need to build a fund. Funds would be shifted around.
The meeting was adjourned.
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