State of the Nation Address implications for Tourism

Meeting report

State of the Nation Address (SONA) implications for tourism
Dr Sibusiso Khuzwayo, Committee Content Advisor, assisted by Ms Sisanda Loni, Committee Researcher, briefed the Committee on the implications of the SONA 2022 for tourism.

Dr Khuzwayo provided an overview of the global tourism performance, comparing statistics from 2019 to 2021. South Africa's decline in international and domestic visitors’ expenditure led to a decline in tourism’s contribution to GDP and employment. This corresponded with global trends.

The COVID-19 pandemic negatively affected the tourism sector. The Committee was provided with perceived barriers to the sector’s recovery. This included red tape for new businesses; restrictive by-laws on tourism for Small, Medium and Micro Enterprises (SMME); continued enforcement of the National State of Disaster; National Public Transport Regulator; slow implementation of eVisas; PCR tests; and low investor confidence.

Other barriers were lack of private-public partnerships; interdicts against transformation; continued closure of sporting events; rising cost of fuel and travel expenses; departmental cooperation; safety and security concerns for tourists; targeted funding for SMMEs; infrastructure maintenance and improvements; unchanged marketing investment frameworks; duplications by state enterprises; low marketing budgets; expensive travel costs; and diminishing state procurement from tourism service providers.

In the SONA, President Ramaphosa stated that government intended to end the National State of Disaster after finalizing measures under the National Health Act and other legislation to contain the pandemic. The Department should respond by lobbying to remove the National State of Disaster to assist quick sector recovery.

The President said that government would be tasked to create conditions enabling the private sector to grow. The required response from the Minister is to engage her Cabinet counterparts to unblock tourism opportunities through a whole-of-government approach. The Department was encouraged to work closely with the Tourism Business Council of South Africa to create market access for emerging tourism enterprises.

The President emphasized the importance of a stable electricity supply, efficient railways and ports, access to broadband network, and access to clean, safe water for the economy. The Minister should engage her counterparts on improving the rail infrastructure for tourism development, the importance of reliable communication networks, and a reliable water supply for tourism development.

The President affirmed that government is streamlining and modernising the eVisa application process to make traveling to South Africa easier. The eVisa system had been launched in 14 countries, including China, India, Kenya, and Nigeria.The revised Critical Skills List had been published for the first time since 2014.

The President spoke about a redesigned Loan Guarantee Scheme that would enable small businesses to recover from the COVID-19 pandemic. The Department should engage the Tourism Business Council of South Africa to increase the uptake of the revised Loan Guarantee Scheme. It was recommended that DOT discuss if it was possible to use the Tourism Transformation Fund and Equity Fund as a form of collateral to increase the uptake of the Loan Guarantee Scheme.

President Ramaphosa stated that government is reviewing the Business Act to reduce the regulatory burden on informal businesses. The Infrastructure Fund was set up with a R100 billion allocation from the fiscus over ten years. Infrastructure projects were prioritized to support economic growth and better livelihoods, especially in energy, roads, and water management. DOT should update the Committee on the infrastructure projects implemented through the Infrastructure Fund that directly and indirectly impact tourism.

The President said that the fourth South African Investment Conference would be held on the 24 March 2022. DOT should provide a breakdown of investment commitments made in the tourism sector and update the execution of the investment commitments made to the tourism sector.

Trading under the African Continental Free Trade Area agreement had recently begun. The Minister should engage with her Transport counterpart in Cabinet about implementing the open skies policy to reduce the cost of travel among African countries. Southern African Development Community (SADC) counterparts should be engaged to revive the Regional Tourism Organisation of Southern Africa with proper structures and funding mechanisms.

The President addressed the global warming crisis. For the first time, South Africa’s climate targets were compatible with limiting warming to 1.5°C. This was the goal that all countries agreed to as part of the Paris Climate Agreement and is essential to prevent the worst effects of climate change.

Government expanded public and social employment, increased the value, and expanded the criteria for participation in the Employment Tax incentive. Government was moving ahead with land reform and anticipated the approval of the Expropriation Bill during this year.

The briefing suggested that the Committee write a letter to the Minister to inform her of the views of the Committee on the SONA 2022 implications for tourism and recommend that the Minister take appropriate measures to incorporate the SONA pronouncements in the Tourism Strategic Plan and Annual Performance Plan. It could request the Minister respond to the Committee by the end of 2021/22 to ensure implementation in 2022/23.

Discussion
The Chairperson stated that tourism cuts across other sectors. All sectors needed to work together for tourism to flourish. When tourists visit malls, they require transport, infrastructure, and safety from unrest. She recommended that the content advisor considered the impact of the happiness index. Tourists were more likely to spend money when they are satisfied. South Africa could not collect revenue if tourists and citizens were not spending money needed for GDP growth.

Ms M Gomba (ANC) expressed satisfaction with the briefing and hard work of the content advisor and researcher. She stressed the importance of departmental cooperation, as all departments have a role to play to ensure the success of the tourism sector. Quarterly or bi-yearly meetings were suggested to follow up on progress and address challenges. The Committee needed to ensure that other departments were helping the Department of Tourism.

Mr M De Freitas (DA) supported the briefing’s proposal to write a letter to the Minister. Tourism will continue to struggle if tourists do not feel comfortable in South Africa. He used examples of access to running water, good infrastructure, and electricity. The Minister needed to reach out to her counterparts, who may be unclear about the impact of tourism on the economy.

Mr P Moteka (EFF) stated that while SONA was "beautiful", as in previous years it lacked implementation. The same issues were raised every year. What action had the President taken to assist tourism? What must be done differently than in previous years? SONA addressed eVisas every year, but nothing had come of it. The Committee needed to look at what was said in previous SONAs and what has been done. Was action taken against those in government who did not do the implementation work?  

Mr K Sithole (IFP) stated that the report helped one understand the impact of COVID-19 on the tourism sector. He asked about the status of intergovernmental relations. Do they have mechanisms to deal with all the concerns that the presentation raised? Departmental cooperation was needed to succeed with the Tourism Sector Recovery Plan.

Mr Sithole asked about job creation data for 2020/21 to see the Department of Tourism’s progress. He criticized the SONA for not mentioning domestic tourism systems to create jobs and empower local municipalities, metros and provinces. A monitoring and evaluation mechanism was needed to track future progress.

Ms H Winkler (DA) stated that the Committee needed clarity as to what extent the Minister has had engagements with Cabinet counterparts? Tourism could boost economic recovery post COVID-19, but fundamental problems such as crumbling bulk infrastructure and environmental pollution had to be addressed. Durban was the host of major sporting events such as the Dusi Canoe Marathon and the Golden Mile attracting many tourists but Durban had unsanitary and unsafe water conditions. The Committee Secretary had raised this with the Department but had not yet received a response. Implementation challenges needed to be addressed.

Ms Winkler addressed the climate change response mentioned in SONA. Existing green tourism programmes needed to be ramped up, and more programmes implemented. Climate change and its impact on the tourism sector could be devasting, and therefore preparation was necessary. Eco-tourism had not been mentioned in the briefing. Eco-tourism was South Africa’s global brand and should be promoted. A part of eco-tourism is biodiversity conservation. Therefore, DOT should be working closely with the Department of Environmental Affairs.

Ms Winkler asked about the eVisa progress aimed at key markets. She asked how the proposed letter to the Minister would be drafted, submitted, and implemented as a committee.

Ms P Mpushe (ANC) said that the Minister should be made aware of the implications of SONA 2022 on tourism. Departments should be encouraged to work together in line with intergovernmental relations. The Committee needed to find a way to ensure that departments work together. She asked if this could be done in the form of a forum discussion. She agreed with the briefing that South Africa’s economy could not grow without efficient roads and railways. The Committee needed to follow up on the revamping of railways.

Ms S Xego (ANC) supported the briefing by the content advisor and researcher. The SONA directed all departments and municipalities to a particular path; influencing and directing policy and budget plans. The SONA directed the nation. She stressed that the tourism sector could not survive without clean water, road infrastructure, energy power supply, and safety and security in the country. Tourism secured employment. She urged the Minister to lobby the relevant departments to support tourism.

Ms Xego said the effects of COVID-19, especially the recent Omicron variant, on the recovery plan could not be underestimated. The goals were now clear. The ministers should be supported. The Department’s objectives should align with what had been said during SONA 2022. Committee members should listen to the State of the Province Address of the premiers. Committee members should be aware of the happenings in all nine provinces. The District Development Model placed importance on district municipalities. The Committee should follow up on what is planned at various district municipalities. There should be a focus on the audit action plan presented to the Committee to avoid repeat audit findings. Tourism should take centre stage since it is the department that provides employment. The Committee must support initiatives by the department so that tourism can boom.

The Chairperson reiterated the main points made by Members as tactics to stimulate tourism:
- The Committee should devise a mechanism for tracking its recommendations to the Minister. Desired outcomes would only be achieved if there was follow-up on the progress in implementation of recommendations.
- The Committee desired roundtable discussions with other Committees and ministries that should be supporting tourism.
- Members brought attention to the domestic and international visitor experiences. Tourists wanted value for their spending and needed to feel safe when visiting the country. This referred to a wide range of issues such as road and rail infrastructure and safety and security. Communication infrastructure needed to be addressed as tourists desired real-time communication and sharing, which required broadband networks.

She addressed the impediments that hinder the development of tourism. Small businesses faced difficulties from financial institutions. The Committee itself had seen the conditions that impede the process of transformation. Transformation was happening at a very slow pace. The mechanisms put into place to quicken transformation were hindered by interdicts. Different solutions should be considered.

Ms Gomba asked how the Committee would assist local municipalities in improving poorly designed master plans that hinder the progress of local tourism. How will the Committee at national level intervene to ensure local municipalities develop sound master plans?

Ms Mpushe referred to the interdicted Tourism Equity Fund and said that DOT should explore if it is possible to use the Tourism Transformation Fund and Equity Fund as a form of collateral to increase the uptake of the Loan Guarantee Scheme.

The Chairperson asked the content advisor and researcher to explore the broad concerns presented during the discussion when formulating a tracking template for Committee recommendations.

Response
Dr Khuzwayo thanked the Committee for interacting with the analysis. It was helpful for the Committee to understand global matters. The analysis enabled Members to deal with matters raised throughout the year.

On the concern about tracking Committee recommendations and implementation problems, a follow-up mechanism was proposed based on the previous year's experience.

Dr Khuzwayo noted that everything said during the meeting would be reduced to one letter addressed to the Minister. The Minister would be requested to respond to recommendations and queries by a particular time. The suggested timeframe was the end of the financial year. The Minister would appear before the Committee and address the issues individually. There would be challenges that would not be resolved within this framework, but the Minister or the Department could update the Committee on their progress. There would be standing quarterly items and the Committee would be informed on implementation movement.

Dr Khuzwayo replied how the SONA could assist the Committee if the announcements made are not followed through. An example was the eVisa process. It had been part of the SONA agenda for five years, but the implementation had been slow-paced. There was a need to fast-track the process involving more countries.

On intergovernmental relations, Dr Khuzwayo suggested that the letter to the Minister would request progress updates and evidence of engagement with other departments. The Committee should be aware of what is discussed with which specific departments..

On the 2020/21 job creation statistics, unfortunately, there was a year lag on official statistics. The job creation data for 2021 were thus not available yet. The presentation had aimed to provide accurate data from credible sources.

Lobbying and engagement with relevant departments could not be done solely by the ministers. Ministers needed the cooperation of the directors-general.

All the items raised during the meeting would be included in the letter and directed to the Minister, including suggestions on how the Committee would receive feedback from the Minister.

Ms Loni responded to concerns about a monitoring tool. This had been raised and addressed in previous years. Dr Khuzwayo had previously developed a monitoring tool. Is this tool still in place? It was never brought to the forefront. The previous tool aimed to assess the achievements of Committee resolutions on an annual basis.

She referred to intergovernmental relations and said that there were various forums in place for this. The Committee had to consider the role of provinces and municipalities in the implementation process. There were structures in place to address intergovernmental relations at those levels. How far down recommendations go depends on the political will at those levels. Committee members had a role to play in addressing this in their constituencies at these levels.

Ms Loni replied about oversight that the Committee’s oversight visits were not as extensive as they could be. Barriers had prevented members from visiting provinces as often as they should. She suggested that Committee members expand and spread themselves across provinces for oversight; the entire group did not have to visit the same province. The Committee could be divided to visit different provinces to improve oversight.

Ms Loni replied that a lack of funding hindered the improvement of master plans. However, assistance and support were still available to local municipalities from the department. She referred further questions about the master plans to the Department's Parliamentary Liaison Officer, Ms Petra van Niekerk.

Ms Loni noted the suggestion about roundtable discussions and how the Committee could engage its counterparts. She suggested that the Committee engage with other Portfolio Committees that cut across the tourism sector.

Mr Jerry Boltina, Committee Secretary, suggested a better strategy for the Committee to decide which provinces to visit. The Committee had visited Limpopo and the Eastern Cape to view their district development model. It was not decided what province should be visited next and he suggested inland followed by coastal oversight visits.

The Committee support team indicated that the concerns raised would be consolidated into a letter addressed to the Minister.

The Committee adopted the minutes of the 1 and 8 February 2022.

The meeting was adjourned.