Tourism is SA’s quick fix

PROMISES: JOBS, ECONOMIC GROWTH

The sector’s employees outnumbered those in mining and utilities in 2016.

The urgent amendment of SA’s stifling visa regime could be the quick fix needed to pull it out of the economic doldrums, especially now that ‘tourism terminator’ Malusi Gigaba has resigned as Minister of Home Affairs.

The tourism industry has been hamstrung for years by unfriendly visa requirements, introduced by Malusi Gigaba, which have negatively impacted the number of tourists. The controversial requirement that visitors present the unabridged birth certificates (UBCs) of children under 18 travelling with them, on entering or exiting the country, has proven especially damaging to tourism numbers.

Millions lost

The Tourism Business Council of SA (TBCSA) says over 13 246 travellers were prevented from entering SA between June 2015 and June 2016, after failing to meet UBC requirements, costing SA millions in potential revenue.

Despite this, tourism has been one of few sectors to consistently show promise and resilience in both job creation and economic growth over the past few years, demonstrating its potential as the lever needed for turning things around in the short term.

Recent figures from Statistics SA show, for example, that of the 15.8 million workers employed formally and informally in 2016, 4.4% (or one in every 23 people) were directly employed in tourism. This compares to 3.8% 10 years prior.

Furthermore, the 690 000 people employed in the sector in 2016 outnumbered those in both mining (444 000) and utilities (118 000). That year, the tourism sector directly contributed to 2.9% of SA’s GDP, making it larger than agriculture’s contribution, although still smaller than construction and mining.

These figures help underscore the extent to which tourism has outperformed other key industries in job creation. And when compared with other countries’ tourism receipts, it becomes clear that tourism should be an easy win for SA.

New Zealand attracted $10 billion in tourist receipts in 2017; Singapore (0.006% the size of SA in land area) brought in $20 billion – more than twice that of SA.

To unlock tourism’s potential to stimulate our economy, we must take our thumb off the choking administrative pipeline.

Zero-cost stimulus

The cost of this tourism sector stimulus is zero or even negative, meaning it’ll free up resources as we reduce administrative and regulatory requirements.

In September President Cyril Ramaphosa announced government’s intention to introduce immediate reforms to SA’s visa regime as part of his stimulus package.

However, these changes still haven’t materialised, with the department of home affairs’ bungled response only creating more policy uncertainty.

Ultimately, however, Ramaphosa’s stimulus plan, particularly the visa reforms, should be welcomed as the quick fix needed to ignite SA’s economic growth and turn the tide on unemployment.

Tlotliso Phakisi is an investment analyst at Cannon Asset Managers.