In an effort to develop the economy and improve the participation of black entrepreneurs in the tourism sector, the South African government launched the R1.2bn Tourism Equity Fund. The fund was launched at a at a time when Covid-19 national lockdown regulations have ravaged the usually lucrative industry.
Through the new fund, black players will receive a boost in their business enterprises in the next three years. The fund will provide either grants or debt funding for companies owned by black women and disabled entrepreneurs, in an attempt to reignite an industry decimated by the coronavirus.
The fund is also aimed at transforming the tourism industry, which has so far proved difficult for black businesspeople to penetrate due to limited access to financial support. The R1.2bn fund would consist of R540m from the department of tourism, R594m from commercial banks and R120m from the Small Enterprise Financial Agency (Sefa).
President Cyril Ramaphosa said the industry directly accounted for 2.9% of the country’s growth domestic product (GDP), and 8.9% indirectly. The tourism industry directly and indirectly employed an estimated 1.5 million people, he said.
“While the Covid-19 lockdown has had a devastating effect on the industry, I am confident that it would bounce back due to its resilient nature. The Tourism Equity Fund is informed by the recognition that the capital-intensive nature of the industry prevents many black-owned tourism enterprises from growing and developing. By providing access to finance for black-owned commercially viable tourism projects, the fund intends to address this challenge,” said Ramaphosa.
The fund would be targeted at beneficiaries across the tourism industry value chain, including those in the accommodation, conferencing, travel and other areas.Ramaphosa said he was committed to ensuring black entrepreneurs would “not be roped in by fronting companies or to be marginal bystanders and small-scale suppliers to larger tourism enterprises”.
“It is our aim through this fund to actively support black-owned businesses to run profitable and sustainable enterprises. It is also our aim to employ people to procure goods and services locally, and to make a real contribution to our economy,” he added.
Tourism Minister, Mamaloko Kubayi-Ngubani said the fund would immediately accept funding applications, starting from Tuesday, its launch day. “The fund would target commercially viable and sustainable black-owned businesses with a minimum of 51% ownership,” commented Kubayi-Ngubani.
