ATC111108: Report Oversight Visit to Khayelitsha, Gugulethu and Kwa-Langa small business establishments

Tourism

REPORT OF THE PORTFOLIO COMMITTEE ON TOURISM ON AN OVERSIGHT VISIT TO KHAYELISHA, GUGULETHU AND KWA LANGA, DATED 8 NOVEMBER 2011

 

Having undertaken an oversight visit to Khayelitsha, Gugulethu and Kwa-Langa small business establishments, the Portfolio Committee on Tourism reports, reports as follows:

 

1. INTRODUCTION

 

The 2010 United Nations Millennium Development Goals country report, poverty and unemployment should be halved in the country by 2014. Many international tourism destinations have successfully used tourism industry to encourage other sectors of the economy and to generate new and innovative employment opportunities. Therefore, there is a realization of the important role that Small, Medium and Micro Enterprises (SMMEs) play in job creation, poverty alleviation and economic development. However, it is also reported that the enterprises have a high failure rate due to lack of market access and funding.

 

The committee took a decision towards the end of 2010, when it was developing a programme for the first quarter of 2011, to undertake a local oversight trip to Khayelitsha, Gugulethu and Kwa-Langa tourism establishments. A key focus of the visit was to assess the challenges faced by the township SMMEs and to formulate a way forward to assist in the constraints faced by the sector within a context of economic development, job creation and poverty alleviation.     

 

2. OBJECTIVES OF THE VISIT

 

2.1               To provide a platform for the township small, medium and micro enterprises (SMMEs) to give their first experiences and raise their concerns regarding services offered by government.

 

2.2               To ascertain the extent to which governments offerings were reaching and addressing the needs of the small businesses.

 

2.3               To involve the public in establishing relevant intervention mechanisms that will enhance the delivery of the appropriate services to SMMEs.

 

2.4               Ascertain role the National Department of Tourism can play to intensify the fight against unemployment and poverty alleviation; and

 

2.5               Finally to secure collective participation in finding solutions to the high failure rate of SMMEs in the townships.    

 

3. COMPOSITION OF THE DELEGATION

 

The delegation comprised of the following Members:

 

Table 1: Members of the delegation

Political Party	Representative/s
African National Congress	Mr D.M Gumede (Leaders of the delegation); Ms. V. Bam-Mugwanya Mr. L.P Khoarai Ms. X.C Makasi; Ms. J. Manganye
Democratic Alliance	Mr. G.R Krumbock
Congress of the People	Ms. M.A Njobe
Inkatha Freedom Party	Ms. C.N Zikalala
	Support staff: Mr J. Boltina, Committee Secretary Ms J. Ntuli, Committee Researcher Ms. S. Sixaso, Secretary to Chairperson

 

4. SUMMARY OF THE SUBMISSIONS AND KEY CONSTRAINTS

 

A number of factors were limiting the effectiveness of the township establishments to play a more meaningful role in the economy. Some of the key constraints were identified and classified as follows: 

 

4.1        Transformation: the problem facing the industry is the poor involvement of local communities and previously neglected groups in the industry. While this has been largely due to the previous policies, the need to reverse the situation is of urgent importance.  

 

4.2        Destination marketing: there was no marketing of townships and the marketing agencies were not creating access to markets for township products / destinations, for example, Cape Town Tourism. There was no clear understanding of how Cape Town Tourism markets townships. Township tours were marketed as poverty tours.

 

4.3        Policy: interventional policy was required to narrow the gap between established businesses and growing products, for example, the Broad Base Black Economic Empowerment (BBBEE).

 

4.4        Competition: there was a serious challenge of competition between local tour guides and tour operators. Local tour guides are a threat to Tour Operators. 

 

4.5        Tourism Support Structures: unless tourism is seen as a strategically important to the economy by all stakeholders of South Africa and the necessary plans, policies and resources to support the initiatives put in place, tourism will continue to be a missed opportunity. 

 

4.6        Presentation of township destinations to international tourists / visitors: were being presented as high risk and unsafe, poor and poverty stricken areas. The perception was created and foretold to visitors. 

 

4.7        Supply Chain Management (SCM) issues: Local suppliers were concerned that they were not considered even for events taking in the townships. Small businesses did not understand the decisions that support procuring non-local suppliers when capacity is available.

 

4.8        Local Tourism Organization: tourism support structures take too long to respond, Tourism Enterprise Partnership (TEP) and Khula were cited as example.

 

Subsequent to the oversight visit and for purposes of accuracy and fair reporting to Parliament, the committee invited the City of Cape Town to make a presentation on activities to promote sustainable tourism and to assess support provided to SMMEs. The briefing session was on the 8th March 2011.

 

 

5. RESPONSE BY CITY OF CAPE TOWN TOURISM ON ACTIVITIES TO SUPPORT TOURISM

 

Ms Mkefa, Director: Tourism City of Cape Town and Mr Ngondo, Manager: Product Development Manager appeared before the committee and mentioned tourism development goals for the City of Cape Town and focused on the issues and challenges that arose from the committee’s trip to the townships of Khayelitsha, Gugulethu and Langa to experienced tourism development first hand.  

 

5.1 Context of Local Government: Municipalities had to lead, manage and plan for tourism development. Tourism was a function of local authority and local government had a responsibility to develop and market the tourism sector.

5.2 Functions to be delivered on a local level by local government: These included tourism training and capacity building, tourism research, provisions for tourist infrastructure and services. It also contained information, regulation and monitoring, and marketing strategy, planning, facilitation and implementation.

5.3 Key Focus areas and Policy Principles: It was to position Cape Town as a world class competitor in tourism and adhering to principles of sustainability, social equity, environmental integrity, economic empowerment, co-operation and partnership.

5.4 Definition of Tourism Development: These were sustainable development and maintenance of attractions, facilities and infrastructure. To meet the needs of tourists was to expand services and products as well as building a tourism culture and awareness. These should ensure that local businesses and disadvantaged communities also benefited from tourism was a key definition.

  
5.5 Tourism Developmental Goals: Amongst these were ensuring sustainability by protecting and conserving resources, linking products to markets by meeting visitor requirements, investing in people for a long term future, definition marketing and product development through marketing Cape Town more effectively as a unique, vibrant all year round destination. 

 
5.6 Future focus on Cape Flats & Metro South East as well as City of Cape Town: Especially by emphasising the African vibe and untouched culture, making safety and security a subject of prime importance and investing in small business growth. 

5.7 Explanation of Business Support and Skills Development Programmes: This included ensuring access to information, skills development, business development and procurement support as well as influencing policy and regulation. Digital business centres in underprivileged areas were also supported and hosted events focused on promoting entrepreneurship.

 
5.8 Product Development Programme: Focus on heritage and culture products, not only by supporting existing programmes but, also by developing new ones like nature based tourism. Examples were the False Bay project and implementing infrastructure to develop tourism such as the Khayelitsha Train Tour.  

 
5.9 Addressing issues that were raised during Committee’s visit Khayelitsha: The main issue was a lack of any real voice in the townships and there was no existing unity among township product owners and a lack of marketing for them. Safety and risk perceived and / or real, was also a challenge for tourism. 

 

6. OBSERVATIONS                    

 

The committee made the following observations that:

 

6.1   The SMMEs have insufficient information and awareness of available government services offered.

 

6.2   Lack of collaboration on development and training because of funding.

 

6.3   Lack of access to finance because of adequate equity capital and collateral often required by financial sector before they can fund small businesses.

 

6.4   Lack of interest by establishments to build partnerships with local communities and suppliers, the committee found there was some competition amongst businesses themselves. SMMEs were not complementing each other.  

 

6.5   Lack of incentives to reward private enterprise to build or develop local capacity and create job opportunities.

 

6.6   SMMEs and cooperatives suffer from poor or non-existent business planning and marketing.

 

6.7   Government was not doing enough to support SMMEs development. The main challenge being the late payment, especially when one takes into account that cash flow is a critical element of a small business’s performance;

 

6.8   There was a need for strong and structured inter-agency referrals, tracking and after care system; and

 

6.9   The committee was impressed with the road infrastructure and cleanliness witnessed in Khayelitsha and surrounding areas.     

 

7.         RECOMMENDATIONS

 

The committee recommends as follows:

 

7.1               The township SMMEs should be organised and have a structure so that their voice for business support could have an impact.

 

7.2               There was a need for government to provide SMME incubation process to focus on entrepreneurial stimulation and development, human capital development through training and mentoring.

 

7.3               Establish SMME mentorship programme which would provide opportunities for entrepreneurs at early stages to learn from and be guided by established business entrepreneurs and professionals through counselling.

 

7.4               Create networking platforms and establish SMME business opportunities and facilitate interaction between Development Funding Institutions and SMMEs and cooperatives.

 

8.         CONCLUSION

 

The concerns and anxieties of the previously neglected groups need to be understood and adequately addressed in building a successful tourism industry in South Africa.

 

Report to be considered.