The Committee was briefed by the Department of Cooperative Governance and Traditional Affairs (CoGTA) on the state of tourism at local government level. The meeting took place on a virtual platform. The presentation reflected on key opportunities and challenges in relation to the development of the tourism sector, from a local government perspective. It also showed tourism opportunities in OR Tambo region identified in the District Development Model. Members were told that some of the challenges facing the tourism sector included deterioration in the quality of facilities and services; a lack of awareness of tourism opportunities; an unresponsive regulatory environment; and lack of support from local authorities.
The Committee asked the Department if it had a plan to assist businesses in the tourism sector to pay lower municipal rates, especially in the light of the impact of the COVID-19 pandemic on tourism businesses. How was CoGTA ensuring that budget resorts managed by municipalities were well maintained? Did the Department provide tour guide training to rural communities? Did it have a plan to push local municipalities to provide water and proper sanitation to tourism sites? What was the Department doing in ensuring that road infrastructure was provided?
CoGTA officials replied that, through the Department’s support grant to municipalities, it ensured that some of the funds were allocated for maintenance of municipal facilities. Other funds were utilised for improving infrastructure. The Department had set engineers and project managers to work together with municipalities in maintaining some of the infrastructure. The Department was committed to collaborating with other government structures to improve the tourism sector.
The Committee acknowledged the need for collaboration in order to improve the tourism sector, to do more work on infrastructure development, to rationalise state-owned assets and to maintain existing infrastructure.
The Minister of Cooperative Governance and Traditional Affairs (CoGTA), Dr Nkosazana Dlamini-Zuma, told the Committee that she would only spend an hour in the briefing because she had other important commitments to attend to.
Chairperson opening remarks
The Chairperson welcomed Members. He said the Committee was grateful that the Minister was attending the meeting in person.
He said the Committee had come to realise that poverty, inequality and unemployment were more prevalent in rural areas than in townships. In its remaining four years in Parliament, the Committee would reprioritise its functions to rural areas, townships, and small towns. Tourism activities were concentrated in major cities like Gauteng, Cape Town and Durban and played a crucial role in combating poverty and unemployment in these cities. The Committee realised that tourism activities also needed to be extended to rural areas where high unemployment and poverty was found. One way to achieve this was to partner with local governments and work with provincial legislatures through a legislative oversight forum. The Committee had also agreed to develop village based and township based tourism oversight forums. The main reason for doing this was to make these areas aware that they could use tourism to create employment and reduce inequality. The Committee would partner with 18 government departments, including CoGTA, to improve the tourism sector and bring about its full potential in South Africa.
Opening remarks by the Minister of COGTA
The Minister thanked the Committee for inviting CoGTA to make a presentation on the state of tourism at local government level. Through tourism, rural communities could be lifted from hunger, poverty and exclusion. Despite the fact that tourism contributed more jobs than other sectors such as the agriculture, mining and automotive sectors, it had not been given the special attention given to these sectors. The sector contributed approximately three percent of the total gross domestic product (GDP). However, the sector remained divided owing to the apartheid legacy, where the minority of the population owned most natural attractions compared to the majority of the population that did not have access to these resources. When these natural attractions were publicly owned, like national parks, the majority of the population was still constrained by entry fees prohibiting them from enjoying South African tourism.
The Department had observed that cities such as Mbombela, Mafikeng and Durban had taken time to actively participate in the tourism sector. They were now receiving support from Tourism South Africa to market their tourist attractions. However, the support provided to these small cities was still influenced by apartheid planning preferences. For instance, Cape Town and Kruger National Park destinations continued to receive greater marketing support than other destinations. The financial support gap had led to the unintended consequence of the privatisation of some of the public assets. The state was not against private ventures but there must be a balance between privatisation and public benefit.
Countries such as China understood that to grow their economy, they needed to open doors to foreign direct investment by diversifying and extending the banking system. Compared to South Africa, China had 17 private banks, six state banks, 134 municipal banks, 3 403 village banks, 45 rural banks and 30 cooperative banks, amongst other financing tools available. By improving access to credit, they were able to improve their tourism sector. South African tourism could learn from China. That was why CoGTA had developed the District Development Model (DDM) which promoted collaboration between the three spheres of government and all relevant stakeholders. The South African tourism sector presented a lot of potential, especially in places like the Eastern Cape. It was the mandate of CoGTA to ensure that tourism took economic space. The historical events of South Africa also presented untapped tourism potential and the Department had proposed plans to develop cultural and heritage sites in South Africa
The Minister said CoGTA was deeply aware of the need to promote tourism and heritage as part of its long-term development objectives. However, it was a reality that the tourism sector had not received enough support from relevant government spheres. CoGTA welcomed the establishment of the oversight forum and trusted it would play a crucial role in addressing the constraints affecting the sector.
Briefing: COGTA reflections on the state of tourism at local government level
Ms Avril Williamson, Director-General, CoGTA , gave a presentation on the state of tourism at local government level in South Africa. She said the tourism sector was a national priority sector with enormous potential to promote economic development, thus requiring municipalities to promote it and support it. Tourism was lagging behind in local government. Tourism plans lacked funding, and there was a lack of technical expertise at local government level. There was misalignment of tourism plans across the spheres of government. Proposals to improve the sector included deeper interaction in policy development initiatives; strengthening capacity building initiatives led by the Department of Tourism to look at training for municipal officials; and working jointly with the Department of Tourism to consider the model and configuration of funding to ensure that there was accountability and impact. The two Departments (CoGTA and Tourism) should work closely to provide technical guidance to the local government sector. This could be in the area of capacity building; the development of norms and standards; and research and development.
The presentation included a study of efforts to promote local economic development through tourism in the OR Tambo Region.
[See document attached for detailed presentation]
The Chairperson suggested Committee Members visit the OR Tambo region to observe how the district model actually worked in the context of tourism.
Mr H Gumbi (DA) commented that when a local municipality collapsed, there is little that they could do to assist tourism. During the Committee’s oversight work, it had been observed that when a municipality failed to perform its basic functions such as fixing streetlights, collecting garbage and cleaning communal surroundings, then tourists would resist visiting such areas. This problem led to the collapse of local businesses and tourism assets remaining unexploited and depreciating in value. There was a serious concern about the collapse of local municipalities and their inability to realise the importance of the tourism sector in combating unemployment. What was prevalent in municipalities was the funding of certain individual interests instead of funding municipal basic functions that were beneficial to the tourism sector. He said he would be happy to receive a comment on this problem.
Countries such as Thailand had demonstrated that combining affordability and quality offerings with tourism attractions, culture, and heritage could attract large-scale tourism from around the world. South Africa had a bunch of accommodation establishments that paid business rates to local municipalities. Was there any initiative by CoGTA to reduce these rates to make tourism affordable? This would also assist local businesses that were on the verge of collapsing because of the COVID-19 pandemic.
Mr Vinny Rabothata, DDG: Local Government Support and Interventions Management, CoGTA, replied that collapsing municipalities were a major factor affecting the success of the tourism sector. The Department’s main role was to help failing municipalities in areas of providing basic services. The District Development Model (DDM) identified four implementation areas, and among those was the stabilisation of local government.
Ms Williamson replied that, through the Municipal Property Rates Act, municipalities were able to reduce rates paid by tourism businesses.
Mr P Moteka (EFF) said poor road infrastructure and lack of clean water were among the major factors affecting the tourism sector in rural areas. How was CoGTA going to assist in building proper infrastructure and providing water in rural areas in order to attract tourists? Could CoGTA liaise with the Department of Agriculture to beautify cultural heritage sites in rural areas? He suggested that CoGTA should not only focus its support on provinces that had ocean attractions. Other provinces should be equally supported.
Ms P Mpushe (ANC) asked what intervention strategies CoGTA had implemented to reduce the challenges facing the tourism sector. Had there been any engagements between CoGTA and the Department of Transport to prioritise safe access to tourist sites? Was the Department involved in the policy review conducted by the Department of Tourism? If these two Departments and other stakeholders could work together, the tourism sector could contribute more to GDP. Were there any actions that the Department took to ensure that local government conducted its functions efficiently? The Department must ensure that there was sufficient access to water at all tourism sites. She suggested that the Committee should visit the Eastern Cape to see all the tourist attractions mentioned in the presentation.
Mr Rabothata replied that the Department continued to support municipalities through the Municipal Water Grant. The Department monitored the allocation of the grant and ensured that municipalities utilised the grant accordingly. The Department constantly engaged with local municipalities to prioritise sectors that would provide them with greater returns
The Minister asked to be excused from the meeting. She said the team accompanying her would respond to the questions. The presentation was not saying that the Eastern Cape was the only focus of the Department since it had ocean attractions. The Department did recognise other provinces that did not have ocean attractions.
The Chairperson thanked the Minister for attending the meeting.
Mr G Krumbock (DA) asked whether there were processes that the Department was following with local government to reprioritise some of its spending to labour intensive sectors such as the tourism sector. Why was the budget for the tourism sector very low compared to non-labour-intensive sectors? What processes were taken by the Department to encourage local and national governments to reprioritise funds to the tourism sector? The main problem in the sector was getting things done. Looking at the COVID-19 pandemic, the Government was very quick to approve vaccines, reducing the process from 10 years to a year. When there was a political need, the Government was capable of speeding up processes and getting things done on time. The country was facing a high unemployment rate that was also a pandemic on its own, but it took decades to get things done to reduce unemployment. It took a long time to convert an idea to an actionable cause. The problem facing the tourism sector was the implementation of all the recommendations suggested by the Committee and various Departments. What was the Department doing to assess why projects took so long to be completed? Was there a plan to streamline various Departments that worked with the Committee so that projects were completed on time?
Mr Rabothata replied that the Department continued to see some improvements in the functions it performed. Through the DDM, the Department ensured that municipalities continued to render their services in a sustainable way.
Ms Williamson replied that the country’s budget was set at the national level. The Department was monitoring how the funds were channelled in various municipalities to ensure that the tourism sector was prioritised and given a sufficient share.
Mr M De Freitas (DA) said the biggest threat to the growth of the tourism sector was the collapse of local government. An example was made about the collapse of tourism at Howick Falls due to poor municipal services, where tourist buses decreased from ten to only one per day. It was embarrassing that the presentation did not mention anything about the limitations of local government and how this impeded local tourism businesses. What was the Department doing to solve the real problems on the ground like providing water and fixing road infrastructure?
Ms M Gomba (ANC) said all the concerns raised by Mr De Freitas had been addressed in the presentation made by the Department. She requested a report on the meetings attended by the Department pertaining to tourism forums. When was the Department thinking of implementing the DDM? Were the municipalities informed about the developments of the DDM? Were there any improvements in the way district municipalities were given their equitable share of the national budget? Some municipalities were not receiving enough equitable share for their operations. How would the Department coordinate with the National Treasury to ensure that the equitable share of Municipalities was sufficient? How was the conditional funding of municipalities and the DDM going to be coordinated?
Ms L Makhubela-Mashele (ANC) said the Department of Tourism had recently developed a Tourism Master Plan to ensure that tourism grew in various areas. Did this plan and the strategies developed by CoGTA speak to one another? If they were contradictory, it would lead to a risk of not achieving the growth intended to be achieved. Most of the budget resorts were under municipal custody and were not maintained by the municipalities. How was CoGTA ensuring that municipal budget resorts were kept in good condition? If a municipality was not playing a role in improving services, providing water, maintaining infrastructure and building proper roads to tourism sites, then tourists would be discouraged from visiting those areas. What was the Department doing to ensure that road infrastructure was provided?
Ms Williamson replied that, through the Department’s support grant to municipalities, it ensured that some of the funds were allocated for maintenance of municipal facilities. Another fund was utilised for improving infrastructure. The Department had set engineers and project managers to work together with municipalities in maintaining some of the infrastructure
Mr K Sithole (IFP) asked about the Department’s involvement in digital and road infrastructure in rural areas. Limitations in the tourism sector needed integrated solutions, because without proper access to water and proper road infrastructure, there was no tourism. Did the Department provide tour guide training to rural communities? Did the Department have a plan to push local municipalities to provide water and proper sanitation to tourism sites? Did the Department have policies to promote tourism in rural areas?
Ms Mpushe advised that the Department should explore the capacitation of tour guides at all tourist sites.
Ms Williamson replied that the Department had identified programmes that aimed to develop skills in the tourism sector and tour guiding was among the fields identified to receive training
The Chairperson said there was a lot of work to do around infrastructure development and strengthening collaboration with various Departments, rationalising state-owned assets and maintaining existing infrastructure. CoGTA needed to collaborate with all relevant Departments to achieve its goals.
Ms Williamson replied the Department was committed to collaborating with other government structures to improve the tourism sector
The Chairperson requested the Department to follow-up on the visit by the Committee to Emaphupheni Village, Pietermaritzburg. The Committee had identified challenges related to infrastructure tourism in the district.
The Chairperson thanked Members for attending the meeting and said questions that were not responded to by the Department would be dealt with in the next meeting. To Mr de Freitas, he said it would be interesting to have a debate on whether South Africa was a failed state or not. He said the Committee was making progress in its work and future generations would be grateful for its initiatives.
The meeting was adjourned.
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