BRIC vis­i­tors spend R3 bil­lion a year in SA

Weekend Argus (Sunday Edition) - - SPORT - Sizwe Dlamini

VIS­I­TORS from Brazil, Rus­sia, In­dia and China, the four emerg­ing economies that form the BRICS bloc to­gether with South Africa, spend about R3 bil­lion a year in South Africa.

An eco­nomic anal­y­sis is­sued by pro­fes­sional ser­vices firm PwC re­vealed that vis­i­tors from the BRIC na­tions sup­ported an es­ti­mated 26 000 South African jobs in 2016.

PwC econ­o­mist Christie Viljoen said: “South Africa is a much-de­sired des­ti­na­tion among the BRIC na­tions. Tourism sup­ports more than 1.6 mil­lion jobs in South Africa and ac­counts for more than 9 per­cent of the coun­try’s GDP.

“While the op­por­tu­ni­ties are aplenty in the lo­cal tourism mar­ket, there are also a num­ber of risks and chal­lenges. Over­all, the re­cent eco­nomic and po­lit­i­cal tur­moil has not hin­dered or af­fected the in­flux of for­eign vis­i­tors into the coun­try. We also do not ex­pect this to be a chal­lenge in the near fu­ture.”

The BRICS na­tions held their an­nual sum­mit in Jo­han­nes­burg this week, with calls for a united front against ris­ing pro­tec­tion­ism in the US.

Pres­i­dent Cyril Ramaphosa urged BRICS to come up with mea­sures to pro­tect small in­dus­tries against the pos­si­ble im­pli­ca­tions from tar­iffs im­posed by the US.

Ramaphosa said BRICS needed to make full use of the New De­vel­op­ment Bank to pro­tect in­dus­tries.

“Un­der the part­ner­ship, and in sup­port of the manufacturing sec­tor, a new in­dus­trial rev­o­lu­tion ad­vi­sory group com­pris­ing pol­i­cy­mak­ers and ex­perts from all BRICS coun­tries will be es­tab­lished,” Ramaphosa said.

Chi­nese Pres­i­dent Xi Jin­ping said the es­ca­la­tion of pro­tec­tion­ism and uni­lat­er­al­ism would have far-reach­ing im­pli­ca­tions economies.

Xi said the world needed to push back against such mea­sures through multi­na­tional bod­ies like the UN and the World Trade Or­gan­i­sa­tion.

“We are fac­ing a choice be­tween co-op­er­a­tion and con­fronta­tion, be­tween open­ing up and closed-door pol­icy and be­tween mu­tual ben­e­fit and a beg­gar-thy-neigh­bour ap­proach,” Xi said.

The PwC sur­vey found that ar­rivals from the BRIC na­tions in­creased by 6.1 per­cent last year – higher than the av­er­age of all tourist ar­rivals – to

for emerg­ing 275 521 vis­i­tors. The eas­ing of visa re­quire­ments for sev­eral BRIC coun­tries over the past sev­eral years had added to in­creased ar­rivals. BRIC tourists ac­counted for 2.7 per­cent of all ar­rivals in South Africa last year, from 2.6 per­cent in 2016.

“Around a third of tourist ex­pen­di­ture in South Africa is as­so­ci­ated with busi­ness-re­lated travel, with the re­main­der be­ing leisure re­lated. Trans­port (26.5 per­cent) and ac­com­mo­da­tion (15 per­cent) ac­counted for the largest pro­por­tion of in­ter­na­tional tourist ex­pen­di­ture in South Africa dur­ing 2016,” said PwC.

Ac­cord­ing to the lat­est World Travel and Tourism Coun­cil (WTTC) re­port, the to­tal con­tri­bu­tion of travel and tourism to the coun­try’s GDP was R412.5bn, 8.9 per­cent of GDP last year. It is fore­cast to rise by 2.9 per­cent this year and to rise by 3.5 per­cent an­nu­ally till 2028 to R598.6bn, which rep­re­sents 10.1 per­cent of GDP in 2028.

The WTTC re­port also states that last year the to­tal con­tri­bu­tion of travel and tourism to em­ploy­ment, in­clud­ing jobs in­di­rectly sup­ported by the in­dus­try, was 9.5 per­cent of to­tal em­ploy­ment – 1 530 500 jobs. This is ex­pected to rise by 3.3 per­cent this year to 1 580 500 jobs.

SA Tourism chief ex­ec­u­tive Sisa Nt­shona said the BRIC coun­tries were ac­tu­ally ma­jor source mar­kets for tourism in South Africa.

Nt­shona said host­ing the BRICS sum­mit was a great ad­ver­tise­ment for South Africa in terms of tourism in gen­eral and busi­ness tourism in par­tic­u­lar.

He said South Africa needed to re­view its visa re­quire­ments to at­tract more vis­i­tors.

“It is im­por­tant that we re­move as many bar­ri­ers as pos­si­ble with those coun­tries, ev­ery­thing from visas, unabridged cer­tifi­cates and air­line con­nec­tiv­ity,” Nt­shona said. ESKOM has fore­cast a 9 per­cent in­crease in the price of coal in the 2018/19 fi­nan­cial year, com­pared with the 3.8 per­cent in­crease in 2017/18.

The power util­ity’s in­te­grated re­port for the year to March showed that coal prices ap­peared to be a ma­jor com­po­nent of its to­tal costs as it looked to rely on short- and medium-term con­tracts amid re­duced pro­duc­tion from so-called cost-plus mines.

Eskom said coal prices in­creased 3.8 per­cent in the pe­riod.

In its lat­est an­nual re­port, Eskom has fore­cast a 9 per­cent jump in the coal price.

An al­most dou­ble-digit in­crease in the coal price would be in­con­sis­tent with Eskom’s fo­cus on cost con­tain­ment.

“Eskom… faces sev­eral op­er­a­tional and strate­gic risks go­ing for­ward,” chief ex­ec­u­tive Phaka­mani Hadebe said in the re­port.

El­e­vated coal costs would typ­i­cally in­crease Eskom’s over­all pri­mary en­ergy costs and lift the util­ity’s tar­iff re­quire­ments.

Since the 2015/16 fi­nan­cial year, coal price in­creases have been on a roller-coaster ride, drop­ping from 19.2 per­cent in 2015/16 to 3.5 per­cent in 2016/17.

Eskom said mines re­quired sig­nif­i­cant in­vest­ment in or­der to in­crease pro­duc­tion. The util­ity said it ex­pected re­duced out­put from the col­lieries un­til they were re­cap­i­talised.

Eskom said it would re­cap­i­talise these coal mines only “where long-term ben­e­fits can be demon­strated”. It planned to spend R10.7 bil­lion on fi­nanc­ing ex­pan­sion at the col­lieries over the next five years.

“How­ever, a two-to-three-year de­lay can be ex­pected be­fore the cap­i­tal in­vest­ment will re­sult in in­creased out­put and pro­duc­tiv­ity lev­els,” Eskom said.

Eskom will stop pro­duc­tion at ex­pen­sive power sta­tions Hen­d­rina, Grootvlei and Ko­mati in the 2019/20 fi­nan­cial year.

Eskom said the move was sub­ject to it hit­ting plant avail­abil­ity of 80 per­cent, as well as an as­sess­ment of the im­pact on em­ploy­ees and lo­cal com­mu­ni­ties. It said that if de­mand was higher than cur­rent as­sump­tions, the sta­tions would be “re­called” to meet de­mand.

In the year ended March 31, plant avail­abil­ity rose from 77.3 per­cent to 78 per­cent.

Hadebe said Eskom was on course to achieve plant avail­abil­ity of 80 per­cent in the cur­rent fi­nan­cial year.

The tim­ing of new build be­yond Medupi and Kusile power sta­tions would de­pend on the Depart­ment of En­ergy’s in­te­grated re­source plan.


Pres­i­dent Cyril Ramaphosa chairs the BRICS Africa Out­reach and BRICS Plus in­ter­ac­tive di­a­logue at the 10th BRICS Sum­mit in Jo­han­nes­burg. The sum­mit’s theme is “BRICS in Africa: Col­lab­o­ra­tion for In­clu­sive Growth and Shared Pros­per­ity in the Fourth...

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