Equity fund seen as a lifesaver for tourism industry

The launch of the R1.2bn tourism equity fund has been welcomed, with role players in the Eastern Cape saying it was long overdue.

President Cyril Ramaphosa launched the fund on Tuesday, describing it as a ground-breaking venture that would help speed up transformation in one of the most crucial sectors in the South African economy.

The R1.2bn fund will consist of up to R540m from the department of tourism, R594m from commercial banks and R120m from the Small Enterprise Financial Agency (Sefa).

With the new fund, black players in the sector were due to enjoy funding to boost 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 equity fund was 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.

Those in the tourism sector in the province are hopeful the fund will level the playing fields and transform the industry.

Nolufefe Nozozo runs a river kayaking business in Port St Johns and has been operational for less than five years.

After Ramaphosa announced that all provincial beaches and rivers would be closed in a measure to contain the spread of Covid-19, Nozozo started to doubt whether to carry on with her business. 

“Most of us are new in the industry and when level 3 was announced we had just started to pick up on clients and customers, and I had two people working for me who are now sitting at home,” Nozozo said.

“We really were starting to take a knock and this fund will help to keep our business open.”

She said black tourism operators were struggling and most had been sidelined, and how this was the first time that government had shown a real commitment to transforming the industry and assisting SMMEs.

Nelson Mandela Bay Tourism chair Shaun van Eck said transformation had always been an issue in the sector, with smaller tourism entrepreneurs struggling to source funding.

“NMB Tourism, together with the municipality, did a township tourism development plan which was to give township players a share in the industry and the scary thing we discovered was that only five township tour operators were getting any business, and so the fund will help with capital which is crucial for operations and with marketing,” Van Eck said.

He said the fund was a win-win situation for both small operators and the big players in the industry.

“Black operators need to get a stake in the industry and the fund will help them buy that stake, and, on the other hand, fully established businesses are desperate for cash flow.

“This is the perfect opportunity for everybody to win and stay afloat,” he said.

Port St Johns Tourism Forum chair Amanda Weerdenburg said she was happy there was a focus on smaller products and operators.

“Tourism is accommodation, food, transport and arts and culture and all those are linked, so if one benefits, others benefit too,” she said.

“For example, I run a restaurant but I have local crafters who display their products in the restaurant, so if people want to buy the crafts they might just sit down for a meal.

“Everybody wins and this is such a positive thing it will boost the morale in an otherwise hard-hit industry.”

Tourism is one of the sectors that was hardest hit by the Covid-19 enforced national lockdown, which contributed to the jobs bloodbath SA and the Eastern Cape have experienced in recent years.

But the new fund would help to grow the stagnant economy,  Eastern Cape Parks and Tourism Agency CEO Vuyani Dayimani said.

Dayimani said the fund was a great initiative that would work towards the holistic transformation of the sector and allow black businesses to fully transition and to make their mark.

“The fund also provides an opportunity for economic inclusion of rural and township products and will enable new tourism products to amplify and present compelling tourism experiences that will be a major drawcard for tourists,” Dayimani said. — Additional reporting by TimesLIVE