Minister insists Tourism Equity Fund is above board

MINISTER of Tourism Mmamoloko Kubayi-Ngubane says her department is ready to defend the Tourism Equity Fund (TEF) in court.

The minister said she had instructed lawyers to defend the legal action by AfriForum and Solidarity that questioned the constitutionality of the TEF.

“We must re-emphasise that our efforts to transform the sector remain 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 told a press briefing.

The TEF fund, which was launched in January, aims to provide a financing vehicle for black businesses and entrepreneurs to invest in businesses within the tourism sector.

Total investment in the fund amounts to more than R1.2 billion.

It was created in partnership with the Small Finance Equity Agency (Sefa) and aimed to help boost transformation in the tourism sector, the minister said.

“The TEF intends 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 recovery plan, the transformation component should be secondary to assisting all businesses affected by the pandemic.

Kubayi-Ngubane explained that her office had held various meetings with AfriForum explaining that the fund was envisioned as far back as 2017.

Sefa, which administers the fund, was halted from continuing with the paying and receiving of applications connected to the fund after AfriForum won a court interdict in April.

The court halted the fund until the main application was heard.

The minister said it was unclear at this stage when the application would be heard, but said she hoped that matter would be resolved quickly.

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 up front 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 on Monday said the minister had not followed proper processes to establish the fund.

The organisations insisted that Covid-19 relief should not be racialised.

“We look forward to facing the minister in court.

“She likes to mention that blackowned 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, regardless of the owners’ race,” said Ernst van Zyl from AfriForum.