Tourism body in funding crisis
● Staff told to stay home as offices close
A funding crisis has left Nelson Mandela Bay Tourism at a crossroads over its future after municipal funding dried up five months ago due to a legal oversight.
While it is likely the organisation will be thrown a lifeline, the municipality has made it clear it has no financial obligation to float the tourism body going forward.
Due to its cash flow predicament, effective from Monday all staff have been instructed to stay at home, with just two members remaining to man operations.
Coming shortly before the start of the region’s summer season, some of the body’s public tourism offices will also close, with only the Port Elizabeth airport and Boardwalk centres remaining open.
This was announced at NMBT’s AGM on Friday, where board chair Buli G Ngomane said if it were not for initiatives the organisation is undertaking, she would have had to exercise her fiduciary duties and dissolve it.
It employs 28 people, including brand ambassadors, and supports a membership of around 260 private tourism products and site operators. Along with its head office, it operates centres at the Donkin Reserve and in Uitenhage.
Prior to the AGM, Ngomane revealed that the tourism body had been surviving on reserve funds and monies earned from projects undertaken by the organisation ever since municipal funding ceased in July.
The new development comes despite a 10-year relationship between the municipality and NMBT.
But the metro has now taken the position that NMBT is an industry association which is membership-based and should not solely depend on the municipality for funding.
The administration confirmed to Weekend Post it had not given any funds to the organisation in July, at which time NMBT had been expecting funding for its 2018-2019 year.
Municipal executive director of economic development, tourism & agriculture Anele Qaba said funding had not been transferred due to legal processes.
This was confirmed at the AGM, where Ngomane said the municipality and the tourism body had not examined the legal status of the parties’ agreement over the past decade.
“Previously . . . after the budget had been approved by council, its transfer to NMBT was subject to a service-level agreement,” Qaba said.
“However, when we followed the similar processes this financial year the legal adviser raised concerns [over] the way the [municipality] had been funding NMBT and raised the following issues: NMBT is not an entity of the municipality and its process of funding should be subjected to the processes as subscribed in the Municipal Systems Act, failing which a Section 67 process needed to be followed.”
The Section 67 process essentially means organisations that meet certain requirements can apply for a grant or a grantin-aid from a municipality.
To comply with the Municipal Finance Management Act, the administration cannot simply appoint NMBT to render services to it, if it had not gone through a tender process.
“Based on this legal advice an item following Section 67 process was tabled at the may- oral committee of November 8 for approval. The item will now have to be tabled for final endorsement by council.”
Qaba said once the item has been approved by council on December 4, a funding agreement will have to be signed between the two parties.
However, he said the municipality had no obligations towards the tourism entity.
Among the remedies Ngomane listed at the AGM was changing the body’s constitution, which would allow it to restructure itself to be in a position to earn revenue.
Ngomane said the municipality currently “owed NMBT”.
“We have continued to serve [it] in our capacity as a destination marketer since July.”
Ngomane said NMBT was seeking to continue a partnership with the metro in the best interests of growing the Bay tourism industry, its stakeholders and the economy.
Nelson Mandela Bay Business Chamber chief executive Nomkhita Mona said on Friday: “If indeed the municipality has made it clear they have no obligation to support NMBT, that would be a statement both shocking andmyopic . . . The municipality has an obligation to all citizens of the city to promote and market [it] as a tourism destination.”
The new development comes despite a 10-year relationship between it and the municipality