Department will defend action against TEF
TOURISM Minister Mmamoloko Kubayi-Ngubane says her department is ready to defend the Tourism Equity Fund (TEF) in court.
She said she had instructed lawyers to defend the legal action brought by AfriForum and Solidarity that questions the constitutionality of the TEF.
“We must re-emphasise that our efforts to transform the sector remains steadfast. We have instructed our legal representatives to proceed with our defence to stop attempts by AfriForum and Solidarity to oppose and render the criteria unconstitutional,” Kubayi-Ngubane said yesterday.
The TEF, launched in January, aims to provide a financing vehicle for black businesses and entrepreneurs to invest in businesses in the tourism sector. Investment in the fund amounts to more than R1.2 billion.
It was created in partnership with the Small Finance Equity Agency (Sefa) and aims to help boost transformation in the tourism sector, Kubayi-Ngubane said.
“The TEF is intended to fund majority black-owned and black management-controlled tourism enterprises (minimum 51%) in accommodation, hospitality and related services, and travel and related services, products and initiatives,” she said.
The 51% black-owned minimum requirement for funding has been described by AfriForum as racist and excluding other businesses from benefiting from the fund. The group said because the fund was launched as part of President Cyril Ramaphosa’s economic recovery plan, the transformation component should be secondary to assisting all businesses affected by the pandemic.
Kubayi-Ngubane said her office had held meetings with AfriForum to explain that the fund was envisioned as far back as 2017.
Sefa, which administers the fund, was halted from continuing with making payments and receiving applications to the fund after AfriForum won a court interdict in April. The court halted the fund until the main application was heard.
Kubayi-Ngubane said it was unclear at this stage when the application would be heard, but said she hoped the matter would be quickly resolved. She said black businesses were being heavily affected by halting the fund.
“Prior to the interdict, Sefa reported that the value of the rands of total applications that qualify for final adjudication stood at about R5.6bn.
“It must be noted upfront that the delays in implementing the TEF will negatively affect black businesses which have already negotiated deals and applied for the funding through Sefa,” she said.
Solidarity and AfriForum said yesterday the minister had not followed proper processes to establish the fund. The organisations insisted Covid-19 relief should not be racialised.
Ernst van Zyl from AfriForum said: “We look forward to facing the minister in court. She likes to mention that black-owned businesses suffer and that they should receive help but does not consider the white-owned businesses or their employees. The Covid-19 pandemic and the government’s lockdown regulations have affected all businesses in the tourism industry.”