R1.2 BN TOURISM BOOST

…Govt launches R1.2bn tourism fund, which according to Ramaphosa will accelerate transformation of the sector

JOHANNESBURG -A tourism equity fund worth over R1.2 billion was launched by government on Tuesday.

It was created by the Department of Tourism, in partnership with the Small Enterprise Finance Agency, which falls under the Department of Small Business Development.

The fund will provide a combination of debt finance and grant funding to facilitate equity acquisition as well as new project development in the tourism sector by black entrepreneurs.

President Cyril Ramaphosa said during the virtual launch that the fund is a ground-breaking venture that will speed up transformation in one of the most crucial sectors of the South African economy, especially during a time when the industry is challenged by the impact of the coronavirus pandemic.

“A recovery will happen. Our task is not to simply return to business as usual but to accelerate the pace of achieving our transformation goals,” said Ramaphosa.

“We want to ensure this fund helps black businesses to substantially benefit from the tourism industry, not [ just] to be roped in by fronting or just being small scale suppliers.” He encouraged qualifying businesses not to wait but to ensure they apply for funding as soon as possible.

Minister of Tourism Mmamoloko Kubayi- Ngubane said the launch of the fund was a critical milestone in the tourism sector.

“The tourism sector in South Africa is largely private sector owned and driven, and its contribution to the South African economy has grown tremendously since the 1994 democratic breakthrough,” she said.

In her view, the fund is necessary because not only will it help to “crowd-in” private sector investment in the rejuvenation of the supply side of the tourism market, but it will also help to transform the sector in terms of ownership and make the sector more inclusive.