Department of Tourism on its 2019/20 Annual Report, with Ministry

NCOP Trade & Industry, Economic Development, Small Business, Tourism, Employment & Labour

23 February 2021
Chairperson: Mr M Rayi (ANC, Eastern Cape)
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Meeting Summary

Audio: Department of Tourism 2019/20 Annual Report 

Annual Reports 2019/20

The National Department of Tourism (NDT) had received an unqualified audit for 2019/20 which was an improvement from the regression experienced in 2018/19. The Minister announced that the Tourism Recovery Plan was near completion and would be presented to Cabinet for approval by the end of March 2021. Attempts would be made to press on with the recovery of the tourism sector in spite of Covid-19. NDT noted an overall achievement of 82% of its performance targets. It explained the reasons for unachieved targets and their subsequent progress.

Committee members asked what were NDT plans to assist tourism small businesses to survive the pandemic; if the Department had undertaken a survey of how many SMMEs had closed down since lockdown or were threatened with closure; if consultations had been held with the private sector to ensure assistance to the tourism industry; what was being done to develop and promote new destinations in the tourism sector; if the Committee recommendations based on discussions with local government had been implemented; the need for repair of provincial and municipal roads to boost to tourism; if there had there been interaction with provincial governments on the Destination Development Master Plans and what were the key elements and implementation timeframe of the Plans; progress on the unmet targets of Baviaanskloof and Shongoni Gate projects; reason for the lack of progress in the Northern Cape; why training interventions had taken place only in selected provinces; QR code system progress; the grading discounts; information about the Tourism Equity Fund and Tourism Transformation Fund and Tourism Relief Fund; problem of student dropouts from the Department’s programmes and if number of participants had been resolved; and progress of cases sent to South African Police Service. NDT was congratulated for procuring the required minimum of 30% of goods from BBEEE-compliant service providers.
 

Meeting report

Department of Tourism and South African Tourism 2019/20 Annual Report
Tourism Minister Mmamoloko Kubayi-Ngubane said the envisaged programme had largely been achieved, except that there had been a negative impact on some institutions towards the end of the financial year, caused by the national lockdown. She updated Members on the work being done by the Department to support the sector during the Covid-19 epidemic. The Tourism Recovery Plan was near completion and would be presented to Cabinet for approval by the end of March at the latest. The work had been slightly delayed for it to be aligned to South Africa’s economic reconstruction and recovery plan. Attempts would be made to press on with the recovery of the tourism sector in spite of Covid-19. Although the Department had anticipated the continuation of operations after full lockdown, it had had to contend with the successive opening and closing down of activities. NDT would be happy to provide full details on the Covid-19 Tourism Relief Fund. The 2019/20 Audit had shown an improvement from the regression experienced in the 2018/19 period. NDT had implemented accounting systems, accountability and consequence management. The Auditor-General had noted an improvement. Recruitment had been a key focus area; the vacancy left by the departure of Ms Morongoe Ramphele, Deputy Director-General: Tourism Sector Support Services, had been filled. She regretted the passing of Corporate Management Deputy Director-General Lulama Duma – the vacancy had not yet been filled. Mr Blessing Manale, Chief Director for Communications, was currently acting in that position. There would be a discussion on efforts to stabilise South African Tourism. Some performance areas could be judged as successes, while in others more work needed to be done in 2020/21. She handed over to Director-General.

Deputy Minister Fish Mahlalela joined the meeting.

Director-General Victor Tharage said NDT had received an unqualified audit, and that there had been a significant improvement in accounting procedures compared to 2018/19. Two problem areas were flagged. The first was the application of the 80/20 principle for the sourcing of goods and services. This problem had not been internal to the Department, but attributable to external procurement agencies procuring goods from third parties. They had tended not to report correctly when applying the 80/20 principle. This error had reflected as irregular expenditure. NDT had dealt with this by ensuring that training was provided for the service providers, and was monitoring it as a key area of concern. The second area flagged was the failure of procurement requests to explicitly state the need for local content. A significant amount of fruitless and wasteful expenditure had been experienced in 2018/19. The Public Audit Act requires that if the Auditor-General found a case of fruitless and wasteful expenditure, the Accounting Officer had to institute an investigation. The investigation had led to the opening of criminal cases with the South African Police Service and internal investigations for disciplinary matters.

Chief Financial Officer, Mr Ralph Ackerman, said that the Department had spent 99.7% of its budget. The underspend of R8.2 million had been due to employee compensation, private enterprises and marketing activities of the tourism and incentives programme, and machinery and equipment. In terms of fruitless and wasteful expenditure there had been a closing balance of R 194 million in 2018/19. It had amounted to R14 000 which was subsequently recovered, resulting in zero fruitless and wasteful expenditure for 2019/20.

An overview of performance targets showed that Corporate Management had achieved 80% of its targets, Destination Development achieved 91.3%, Tourism, Research, Policy and International Relations achieved 91.67%, and Tourism Support Services achieved 72.74%. Overall achievement had been 82.43%.

Mr Blessing Manale, Acting DDG: Corporate Management, said most targets of Programme 1 had been met, the vacancy rate of 9.2% had been on target. One target that had not been fully met which was 50% of women in Senior Management Services. The variance had been due to internal staff transfers or resignations. The inability to fill certain posts had been due to resignations in the last quarter of the year.

Ms Aneme Malan, DDG: Tourism Research, Policy and International Relations said Programme 2 had achieved 11 of its 12 targets. A Tourism Research Seminar planned for 20 March 2020 had failed to achieve the annual target due to the publication of Covid-19 regulations on 18 March. In its place, a webinar had been hosted in the current financial year. She outlined all the target achieved.

Ms Shamilla Chettiar, DDG: Destination Development, said Programme 3 had achieved 21 of 23 targets. NDT had implemented four Master Plans, of which 3 three were in the Northern Cape and one in the Eastern Cape. The work was linked to work in coastal regions throughout the country. Four projects were implemented across all nine provinces. The first was the budget resort network and brand concept, the second facilitates niche tourism development – one per province. NDT collaborated with the provinces to advance the pipeline of nationally prioritised tourism investment opportunities provided by provinces. There was the implementation of interpretive signage at five sites: Kruger National Park which straddles Limpopo and Mpumalanga, Golden Gate Highlands Park in Free State, Kgalagadi World Heritage Site in Northern Cape, Marakele National Park in Limpopo and Addo Elephant Park in Eastern Cape.

The contract for the Visitors Centre at Baviaanskloof had been achieved and construction of the Visitors’ Centre has commenced. Work on the Dinosaur Interpretation Centre in the Golden Gate National Park had proceeded. Work on the Palaborwa Wild Activity Hub in partnership with SANParks in Limpopo had been concluded to facilitate the statutory authorisation and approval of the work being undertaken there. Three projects linked to Green Tourism: the Harold Johnson Nature Reserve in Kwazulu-Natal, the Hole in the Wall in the Eastern Cape and the Orange River Mouth in the Northern Cape, all had been completed.

Two projects not achieved were the Leopard Trail in the Baviaanskloof world heritage site in Eastern Cape. Failure to commence was due to procurement delays on the part of the project partner, Eastern Cape Parks and Tourism Agency – that work had now commenced, with hiking huts to be completed by 31 March 2021. The Shangoni Gate project in the Kruger National Park has not progressed due to the resignation of an engineer who had to finalise the terms of reference for a contractor. SANParks had since appointed an engineering firm to do the designs for the bridge and provide a bill of quantities. The contractor had not yet been appointed, but the detailed work had been completed

The national parks maintenance programme had now been rolled out in all 19 national parks. The Blue Flag Programme had proceeded smoothly and was being implemented in the three coastal provinces of Kwazulu-Natal (nine beaches), Eastern Cape (seven beaches) and Western Cape (nine beaches). NDT had exceeded its target for full-time equivalent jobs having learned from experience that it should recruit many more students than required to counter the dropout rate. The strategy had borne fruit with more participants staying in the programme than leaving it.

Ms Morongoe Ramphele, DDG; Tourism Sector Support Services, spoke about the development of four strategic objectives for Programme 4 aimed at: accelerating transformation in the tourism sector; facilitating the development and growth of tourism enterprises, contribute to economic growth and job creation; diversification and enhancement of tourism offerings; and facilitation of tourism capacity-building programmes. It had achieved 21 of 29 targets. Significant work had been done on five, while 3 had not been not achieved.

To accelerate the transformation of the sector, two awareness sessions had been successfully implemented. Five incentive programmes had been implemented. The Market Access Support Programme had approved 39 applications. The Tourism Grading Support provided discounts on invoices generated by South African Tourism of up to 80 percent and 2,762 discounts had been offered to participating businesses. The Green Tourism incentive programme had been successfully implemented, with 31 applications approved across provinces. The Tourism Transformation Fund was implemented with 6 applications approved.

The Tourism Equity Fund had not been implemented in 2019/20 however some work had been achieved. Significant time had been spent on finalising the concept and approval was obtained only at the end of the financial year. Although the Fund had been launched in 2020/21, it had not been possible to implement activities.

Three initiatives had been planned for provision of support to a domestic tourism growth strategy. The first aimed at increasing tourist numbers, in partnership with SANParks, at five national parks. It was implemented at the Kruger National Park, Golden Gate National Park, Kgalagadi National Park, Marakele National Park and Addo Elephant National Park. A second project had been implemented in support of youth, the elderly and people with disabilities. Success was achieved only in the two latter categories. The first lockdown had adversely affected full implementation as stakeholders were not willing to implement activities at this time. The Tourism Month Campaign had been successfully carried out in Kwazulu-Natal.

The objective of growth of tourism enterprises for inclusive economic growth and job creation had been achieved in 4 out of 6 instances. Support had been successfully provided to four incubators in Pilansberg, Mayele, Phalaborwa and Mier. NDT had planned to develop two new incubators to support tour operators and the youth for innovation projects. As it happened, the project coincided with the lockdown and the site visit to the premises of the service provider had not taken place. However, substantial work has been done on developing concept documents for the project.

On the innovation incubator, the Department was collaborating with the Technology Innovation Agency, with which it had had protracted negotiations over the development of a tourism-specific concept. This had resulted in delays in finalising collaboration with TIA who were due to include tourism within its mandate. NDT had improvised on the tour operator incubator project, to ensure that emerging tour operators were included in the domestic tourism scheme. It had planned three initiatives for enterprise development. The first initiative was to conduct a feasibility study of community-based enterprises in communities situated close to five national parks. This was completed for Kruger National Park, Golden Gate National Park and Marakele National Park. Feasibility studies had not been completed for Augrabies Falls and Addo National Park because the service provider had proved unsatisfactory. It was decided that Department officials should undertake the studies themselves for quality assurance purposes.

On the improvement of visitor services, the Department had implemented a Tourism Monitors Programme for identified tourist attractions in all provinces. On management of complaints, 100% compliance had been achieved according to the NDT service delivery charter.

NDT had planned to implement ten capacity-building programmes. One of the programmes, now fully implemented, focused on training 20 tour guides in Mandarin. The participants had been drawn from the Western Cape, Eastern Cape and Gauteng. The 2019 National Tourism Career Expo had been successfully hosted in partnership with the North West Department. With the exception of the Western Cape all provinces had been represented and the NDT had partnered with the Cultural, Arts, Tourism, Hospitality and Sports Sector Education and Training Authority. The 2018/19 Hospitality Youth Programme which had 3 900 participants had been implemented in spite of some student departures. Participants had been drawn from Kwazulu-Natal, Northern Cape, North-West and Western Cape. A country-wide chef training programme had been implemented, targeting 560 youth and ending with 368. Some graduates of the programme stayed on to learn additional skills. The wine service training programme had experienced some dropout of its 300 young people with 241 finishing the programme.

The Food Security Quality Assurance Programme targeting 1,500 youth had not been implemented, due to the non-compliance with the Public Finance Management Act principles on the part of the procurement service provider. The training of 60 youth in resource efficiency was successful, as were four capacity-building initiatives targeting women in tourism. Only one capacity-building initiative had been implemented. This may have been due to poor planning in identifying potential partnerships. NDT was now looking at resourcing the programmes from its own resources and engaging in procurement to continue programme implementation. The mentorship pilot programme had now begun with the inclusion of Tourism Business Council of South Africa (TBCSA) to do the matching and placement of mentors and mentees. An agreement would be included before the end of 2020/21. Under the Executive Development Programme, 20 Black women were enrolled in institutions of higher learning. As a result, five of the students had been promoted at their places of work, while continuing to participate in this valuable course.

The Director-General reported on the Department's human resources consisting of 472 personnel including interns. 93% of Department personnel represented skilled functions, and of these 56% were female, inclusive of all levels. Of these, 21 (4.4%) were persons with disabilities – this area was being closely monitored and was a source of pride. One member of the Senior Management Staff had passed away during 2020/21 and another had retired. NDT was well within its human resources targets, and this included women’s empowerment at Senior Management level. It was important that the Department is transparent with Parliament on this. Achieving target recruitment levels depended on the number of available positions, while budget availability also affected its ability to fill vacancies. He clarified that the term “Black” comprised Africans, Coloureds and Indians. This was to allay concerns within the general public that only Africans were referred to. Africans comprised 87% of this category.

Discussion
The Chairperson said he was impressed what Corporate Management had targeted as key performance areas, in particular the Workplace Skills Plan and Broad-based Black Economic Empowerment. It would be pertinent to include 30-day payment of service providers. The 40% post allocation to women would also have to be part of the Annual Performance Plan, as stated in President Ramaphosa’s recent State of the Nation Address. He appreciated that corrective measures had been taken for poor or partial achievement.

Ms S Boshoff (DA, Mpumalanga) asked if the Department had engaged with community-based tourism businesses in the formal and informal sectors. Some had either closed down or were struggling to survive. She asked if the Department had contacted them to provide guidance and support. NDT should engage with small tourism businesses (small, medium and micro enterprises) which have greatly contributed to the value chain in the tourism sector. This would enable it to gain insights into the challenges faced at lower levels of the tourism sector. She asked if the Department had undertaken a survey on how many SMMEs had closed down since the inception of lockdown, and how were threatened with closure.

She enquired if the Department had secured a QR code system as was the case in other countries, to ensure the smooth flow of entrants at ports of entry. She asked if government had undertaken consultations with the private sector and other partners to ensure assistance was provided to all sectors of the tourism industry, which was one of the top contributors to South Africa’s GDP. The sector was well below the 2019 R5 trillion mark, and it was now crucial to develop innovative plans and implementation methods. She wondered what the Department was doing about this.

She asked what was being done to develop and promote new destinations in the tourism sector. She referred to South Africa’s rich historic and cultural heritage, exemplified by Iron Age rock engravings in Mpumalanga. This was a little-known feature and she wondered if the Department had engaged in discussions with local government and local communities, to promote the development of tourism businesses and stimulate a concomitant improvement in livelihoods. A report should be made on discussions that had taken place with local government, particularly on the state of provincial and municipal secondary roads. Repair of this infrastructure would provide a much-needed boost to tourism. The provision of water and electricity were also of concern. In line with the President’s State of the Nation Address, it was necessary to support local initiatives and the local tourism industry in all provinces. In reference to the presentation, she asked why training interventions had taken place only in selected provinces. She requested further detail on the attribution of grading discounts.

Mr M Mmoiemang (ANC, Northern Cape) appreciated the presentation. He asked where the Department was with its Annual Performance Plan and Strategic Plan. He congratulated the Department on the unqualified audit. On Programme 1, the service provider had enforced the number of attendees as a condition to carry out the programme. He requested more details on the capacity-building programme, and if the issue of the number of participants had been resolved. He expressed appreciation that the Department had managed to procure the required minimum of 30% of goods from a BBEEE-compliant service providers.

On Programme 2 on Tourism Research, Policy and Commercial Relations, he asked if the Tourism Research Seminar had been replaced by the webinar. He pointed out the importance of this Programme specifically the Hospitality Youth, Blue Flag Tourism Safety Monitors programmes which had been expected to benefit from the Tourism Research Seminar.

On Programme 3, had there been interaction with provincial governments on the Destination Development Master Plans to ensure integration into the work of the Department. He asked what it was doing to address challenges in contract management. He referred specifically to the Baviaanskloof and Shondoni Gate projects. He pointed out that most of the unmet targets were in Programme 4 and noted that work for the Northern Cape had not been achieved. He suggested that the Department engage the Northern Cape MEC for Tourism, to provide guidance for the inclusion of the province in NDT programmes.

On the recently-launched Tourism Equity Fund, implemented in conjunction with Small Business Development and Small Enterprise Finance Agency (SEFA), he asked how the Department could protect SMMEs in the tourism sector against the stringent requirements of SEFA. He referred to the 15 September Select Committee meeting with NDT, South African Local Government Association and local municipalities. He asked if it had implemented the key recommendations from that engagement. Given the proximity of the Select Committee to municipal and provincial structures, it was important that the Chairperson brief the Minister on these recommendations.

The Chairperson noted that Committee Report with its recommendations had been adopted the previous week. After it is published in Announcements, Tablings and Committee Report (ATC), it would be transferred together to the National Council of Provinces under NCOP Chairperson Masondo, for consultation with the Minister. All Committees would participate in an Annual Review Planning Session the following week to prepare Committee work for the current year including oversight visits. On the Destination Development Master Plans, he asked for the key elements and implementation timeframes of the Master Plans. He asked if there was a possibility of businesses double-dipping on the Tourism Equity Fund and Tourism Transformation Fund.

Ms M Moshodi (ANC, Free State) asked how many cases had been submitted to the South African Police Service and progress to date. What strategy could be implemented to address the problem of student dropouts from the Department’s programmes. She asked what the input of engineers was and their remuneration level. NDT had spent 99% of its budget, but asked for the financial implications of non-performance in its unmet targets. How did it intend to address irregular expenditure. She then congratulated the Department on the work being done.

Ms B Mathevula (EFF, Limpopo) experienced connection problems and her written questions were read out. She asked for NDT plans to review transformation plans given that they were favourable to existing businesses in the cities, to the exclusion of those in smaller localities. What were its plans to assist SMMEs to survive after the pandemic? The Tourism Equity Fund assisted only those in Polokwane and Tzaneen in Limpopo. She wondered what NDT envisaged for disadvantaged residents of villages and townships. The Shangoni Gate project had seen the resignation of contractors. When would it appoint new contractors?

Department response
Ms Aneme Malan, DDG: Tourism Research, Policy and International Relations, replied to questions on Programme 2. Comments had been made on the importance of engaging with SMMEs. From a stakeholder management perspective, the Department was increasingly including SMMEs in Ministry engagements. Various sub-sector and location-specific platforms had been created reflecting this engagement. NDT would continue to bring SMMEs and all relevant parties on board. On the Department undertaking studies on the impact of Covid-19 on the sector, three waves of surveys had been done in 2021/21 in partnership with the private sector and the International Finance Corporation. The results of all three studies had been released and could be made available. The tourism research seminar had been planned for March 2020 and had to be cancelled due to Covid-19 regulations; it had been replaced with a webinar hosted in October 2020. The ongoing situation would determine if future sessions would be in the form of seminars or webinars.

Ms Shamilla Chettiar, DDG: Destination Development, replied that the Shangoni Gate and Baviaanskloof. projects had experienced some challenges. The Shangoni Gate project had taken a long time, due in part to extensive public consultation on the location of the Gate. The process had lasted until communities adjacent to the park were happy with its location. The knock-on effect of this extensive project, undertaken in conjunction with an environmental impact assessment, meant specialist studies had to be done on the location of the Gate to take into account flood lines, bridges and topography. SANParks had recruited an engineer to work on the project and who had been expected to join the permanent project team – the engineer had however resigned, resulting in the appointment by SANParks of an engineering consulting firm to continue with the work. She agreed there had indeed been challenges and delays, but attempts were being made to continue the project and prevent further interruptions. These challenges had been unforeseen. No contractors been had been appointed to date, but the detailed scope of work and bills of quantities had been finalised by the technical team.

With Baviaanskloof there had been supply chain problems and here again, the terms of reference of the project had not necessarily included troubleshooting advice. The contractor had been appointed before the end of March. Construction work on the Leopard Trail was due to be completed by 31 March 2021.

NDT was not the competent authority for road management and the state of rural roads. However, where tourism in specific areas had been affected by the poor state of the roads, the Department had been in liaison with the provincial and local authorities. She believed that consultation with local authorities would be strengthened during Master Plan implementation. The Master Plan was a broad and special plan incorporating a concept for tourism development, and linkages to further investment in tourism and other forms of infrastructure. The Master Plan highlighted key tourism assets within a given area, and proposed long-term plans for tourism development there. The Master Plan indicated items linking to tourism, such as road and airport infrastructure. Depending on funding availability, Master Plans could take between 5 and 20 years to come to fruition. As an example, she cited the Cradle of Humankind in Gauteng for which the Master Plan had been initiated in 2001, with the opening of the first sites such as Maropeng in 2005. The roughly 99 initial sites have increased to 400. This demonstrated the impact of a Master Plan. It fostered integrated development plans, and allowed for a progressive implementation of tourism which was ultimately the expected impact of the latest four Master Plans. Taking the work forward would involve working within the District Development Model (DDM) to infuse the elements of the Master Plans into a plan for each district. The Master Plan extended into multiple districts because tourism had no boundaries. The DDM could then be integrated into regional plans.

She replied that that departmental projects worked with the prescribed rates for built environment professionals, as defined by their council. The amounts varied according to project size and complexity.

Ms Morongoe Ramphele, DDG; Tourism Sector Support Services, replied to questions on Programme 4. On engagement with local government, the Department would be hosting two sessions. The first session would aim at building capacity amongst municipal tourism practitioners, and developing ongoing tourism development initiatives; this would entail the sharing of experiences in tourism planning and development, stakeholder identification and the sharing of ideas between role-players and stakeholders on the packaging of information. This would contribute to securing funding for tourism initiatives.

The second session would target business initiatives, with NDT providing information on programmes available in the tourism sector, at government level and in the sector as a whole. This would grading, market access opportunities and others programmes as provided through funding from Skills Initiative for Africa, the Swedish International Development Cooperation Agency, the International Development Corporation, and other funding bodies. This would provide a spectrum of activities in which South African Tourism could make informed decisions, based on completed forms. Businesses would thus be informed on how to access these opportunities. This was not the first year in which such programmes had been hosted; however, it now entailed targeting individual provinces, over a number of years.

On grading discounts, applicant grading was the responsibility of South African Tourism, after which an invoice was generated and the Department would then subsidise up to 80% of this. The criteria included tax compliance of the organisation. She gave assurances that no request had been turned down because most establishments met the desired criteria.

On dropouts, particularly in the Northern Cape, NDT had engaged closely with the project steering committees in all provinces, to ensure that the skills training programmes were a success. Retention had proved particularly difficult in the Northern Cape, and training there would start in the following financial year. In the Northern Cape strict measures would have to be taken in terms of the service provider to minimize dropout rates. Overall, the presentation reflected the numbers enrolled in training programmes in all provinces. NDT was hopeful that participants would remain in the programmes and derive value from them. The role of project steering committees was crucial in ensuring that provinces derive full value from their participation in the Department’s activities, particularly for unemployed youth.

The CFO, Mr Ralph Ackerman, replied that 30-day payments had been included as an indicator in the Annual Performance Plan, and would be included in reports, together with the 40% allocation to women. Expenditure should correspond to targets achieved. However, the Department tended to re-assign funds from projects which had fallen behind, to those which were on track. This explained why the presentation showed expenditure being higher than targets achieved. This fund transfer to better-performing projects permitted a full budget spend, and projects which had lagged in execution would be able to benefit from a reallocation of funds the following financial year.

The question on irregular expenditure had been addressed by the Director-General, but the CFO pointed out that the biggest problem faced by the Department had been the implementing agents who, while complying with the criteria to obtain free quotations, had not included the 80/20 principle calculations on the service providers. This had therefore been deemed irregular expenditure. In general, NDT had obtained value for money; there had been no wastage of funds, and this was merely a classification issue. It was now a question of reporting the irregular expenditure to National Treasury.

The Director-General noted the initial fund of R200 million had been used to establish the Tourism Relief Fund which supported 4 000 SMMEs to a value of R50 000 each. The Fund had R100 million from NDT and R100 million from South African Tourism (SAT) and Tourism Business Council of South Africa (TBCSA).The R200 million had been obtained on the premise that income would be generated from the reference year budget. R100 million had been thus reinvested in the Tourism Relief Fund. This explained the apparent disparity.

On the criminal cases, Department procedure on receipt of the forensic audit was to undertake a series of prescribed measures. The first step was to report the case to the law enforcement agencies for further investigation. This was different from a forensic investigation. The matter was currently in the hands of the South African Police Service, and a case has been opened. Department representatives had met with the investigating officer, but he was not privy to the details of the investigation. Such matters took time. He emphasised that the matter had been duly reported to the SAPS by the Department, which had provided accompanying documentation. The matter was currently before the Commercial Crimes Unit.

On the possibility for double-dipping between the Tourism Equity Fund and the Tourism Transformation Fund, the DG replied that this was not the case. The two funds had different beneficiaries. The Tourism Transformation Fund did not allow for equity acquisition or financial lending – this was the purview of the National Empowerment Fund and the grant component, which is maintained at a level of R5 million under the department budget. The purpose of the Tourism Transformation Fund was essentially to assist businesses at the lower end of the scale which would include most SMMEs. It did not allow for the acquisition of equity. However, the Tourism Equity Fund was able to acquire equity for existing businesses and for expansion into new business areas with a basic criterion of R10 million for the new project, with possibility of augmenting the grant component to R20 million. This provided scope for Black-owned and controlled businesses to access funding. This activity was being carried out in partnership with the Skills Initiative for Africa, with which the Department communicated regularly, and included clear administration and monitoring obligations. This partnership approach was likely to open avenues to more funding. All geographical zones of South Africa would be included in the project and importantly, the rural areas and townships would be covered. The project would provide opportunities to raise funds from international donors, for potential new business ventures and further development of initiatives. Key to this would be the preparation of viable business plans.

On the internal demand for training, the Director-General said that six people had initially been identified, while other candidates came from different institutions. Demand for training had increased with the growth in the importance of financial management tools, and 20 candidates had now been scheduled for training. On the Buy Local and Support Local Campaigns, the Minister and Deputy Minister had travelled throughout the country including rural zones, to promote domestic tourism. Tourism had a major contribution to make in supporting local initiatives. Economic recovery would have to be facilitated through the consumption of domestic tourism products. On product development as raised by Ms Boshoff, the Department faced resource limitations and needed to prioritise. He cited “liberation heritage tourism” as one of the components which could be explored. NDT collaborated with other Departments which had specific mandates for the custodianship of tourism sites, such as the Department of Sports, Arts and Culture. On the use of QR codes, the Minister had indicated that the Department would present Cabinet with a recovery plan which took into account multiple aspects including technology.

Mr Mmoeimang suggested the Department would have a critical role to play in deciding which organisations could benefit from the Tourism Equity Fund which is managed by the Skills Initiative for Africa.

The Chairperson asked if there was an agreement or Memorandum of Understanding which addressed what Mr Mmoeimang had raised.

The Director-General replied that there was a signed agreement which stipulated everything including the criteria. NDT would desist from influencing Skills Initiative for Africa in beneficiary selection. However, the Department would work with Skills Initiative for Africa to ensure full implementation of the spirit of the agreement. NDT would receive Quarterly Reports, and would have clear line of sight in ensuring that funding was reaching the intended beneficiaries. This demonstrated the importance of partnership.

In his closing remarks, Deputy Minister Fish Mahlalela noted that all questions had been responded to, but he raised the point that engagement with Small and Medium-sized Enterprises was one of the Department’s priorities. During the Level 4 lockdown the Department had engaged with them by means of webinars, to institute the development of a recovery plan. Subsequent to Level 1, the Minister and Deputy Minister had visited several provinces to engage with Small and Medium-sized Enterprises. Lately they had met with representatives of such businesses in Bojanala Platinum District to understand the challenges faced due to the impact of Covid-19. They had discussed the development of a collective response to revive the sector.

On engaging with local government as indicated by the Deputy Director-General, a three-year capacity-building programme had been initiated in a particular municipality. Its objective was to oversee the development of a specific local tourism organisation in the municipality. Municipal officials had been trained in grading of the participating establishments, and there were numerous other activities. While acknowledging that some road infrastructure was linked to tourism routes, he repeated the DDG’s assertion that road construction did not fall within the jurisdiction of the Department of Tourism. Referring to his visit in 2020 to O.R. Tambo District, he cited the poor condition of the provincial road linking Umtata to Coffee Bay, a highly popular tourist attraction comprising the Hole in the Wall. The poor state of the road had represented a major challenge, and road repair was the purview of the Department of Transport. It would be necessary to sensitise the relevant Departments on the need to repair key routes which provide access to tourist attractions.

The Deputy Minister replied about a problem of cooperation with the Northern Cape Department. In the course of a visit to the province, he had discussed this matter with the Northern Cape MEC in the hope that collaboration could be fostered. Addressing the dropouts from capacity-building programmes, he pointed out that in some instances people had moved on to new opportunities, while others had faced challenges of a social nature. He suggested that the numbers of people initially recruited to Department programmes could be inflated to compensate for possible future dropout, thus ensuring the achievement of the training targets.

The Deputy Minister closed by saying that the Department was operating within a difficult environment with the Covid-19 pandemic having raised serious challenges in the tourism sector. Consequently, the Department was working hard in collaboration with stakeholders, to resuscitate the tourism industry. He emphasised that the transformation agenda was a key element of this process, and justified the introduction of the Tourism Equity Fund to benefit the broadest possible number of South Africans. Such action would contribute hugely to poverty alleviation and unemployment reduction, and would contribute to reducing inequality. He reiterated the Minister’s remark that in consultation with provincial stakeholders, the Department had developed a Tourism Recovery Plan. This would be forwarded to Cabinet and if adopted, would be made public. Province- and district-specific recovery plans, incorporating input from districts and municipalities, had been developed at provincial level.

The Chairperson thanked the Deputy Minister, Minister, Director-General, Deputy Directors-General, Chief Financial Officer and all officials who had participated in the presentation of the 2019/20 Annual Report.


 

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