SA Tourism lost over R800m in Covid-19 budget cuts

Minister of Tourism Mmamoloko Kubayi-Ngubane.
Minister of Tourism Mmamoloko Kubayi-Ngubane.
  • The Department of Tourism saw its allocations drop from R2.4 billion to R1.4 billion, as funds were redirected.
  • SA Tourism's total revenue of R1.5 billion for was revised downward to R438 million. 
  • Its allocations were reduced by R826 million.

South African Tourism told Parliament on Tuesday afternoon that adjustments to the portfolio's budget have seen the Department of Tourism and SA Tourism's budget shrink significantly, but that it has since started projects to help tourism get back in full swing when lockdown regulations ease.

According to a Statistics South Africa report released in November last year, tourism contributed 2.7% to South Africa's GDP in 2018 and provided jobs for 739 657 people.

Since President Cyril Ramaphosa announced the national lockdown aimed at slowing the spread of Covid-19 in late March, the tourism sector has suffered significantly due to travel restrictions.

Minister of Finance Tito Mboweni tabled his supplementary budget in late June in response to the pandemic. This affected the Department of Tourism, which saw its allocations drop from R2.4 billion to R1.4 billion, as funds were redirected to more urgent budget items.

As a result of the budget cuts, there was less to go round for the Department of Tourism, whose allocations to SA Tourism decreased by over R800 million, contributing to a downward revision of the latter's revenue from R1.5 billion to under R500 million.

Alcohol ban an added impact

Minister of Tourism Mmamoloko Kubayi-Ngubane told Parliament's Portfolio Committee on Tourism that the impact of the Covid-19 pandemic on the tourism sector did not go unnoticed, as government’s immediate interventions involved limiting the movements of people.

"The risk-adjusted approach puts more responsibility on the tourism sector. Limited movements have been allowed and curfews and the ban on the trade of alcohol is expected to have an impact as well," said Kubayi-Ngubane.

SA Tourism CFO Nombulelo Guliwe said the entity's total revenue of R1.5 billion was revised downward to R438 million, due to a reduction in the allocated transfer to the department of R826 million. There was also a downward revision in projected exhibition income and levy fees, she said.

"This would be the revenue or credit side of things. On the debit side, we have, at a programme level, various adjustments." Guliwe added that due to the change in revenue, there was a "corresponding revision on the investing side" which was reflected in the budget.

Guliwe said SA Tourism had a business enablement programme, which seeks to align operations to the strategic objectives of re-igniting tourism demand, rejuvenating supply and building an enabling capability for the sector to start up again once restrictions were eased.

"The business enablement programme is responsible to ensure strategy development, and to provide centralised research insights and analytics to support the core business and provide an open source for information-sharing with the tourism sector to strengthen collaboration with the tourism industry," said Guliwe.

Guliwe SA Tourism had frozen non-essential vacancies, but added that curtailing the cost of compensation was already on the cards before the pandemic. Compensation of employees will be adjusted from R243 million to R237 million.

"There have been discussions about looking at the staff composition, even before the pandemic. We looked at what we needed to do as SA Tourism to be efficient. We highlighted projects we have to do to ensure we have a policy environment aligned to that of government," she said.

SA Tourism CEO Sisa Ntshona said: "SA Tourism, through the department, will continue to monitor the environment with National Treasury. Upon readiness of the sector based on the risk-adjusted approach, the department shall motivate to the National Treasury to consider resourcing tourism's recovery efforts from a marketing and development point of view."

SA Tourism chief marketing officer Mzilikazi Khumalo said when leisure tourism opens up, SA Tourism should be able to meet the demand from tourists and tourism businesses by consolidating events calendar and alignment of all of the Tourism SA's campaigns.

Last week the Financial and Fiscal Commission told Parliament that while Covid-19 grounded the tourism sector, it was vital that in outer years government prioritise as a prime provider of opportunities for employment and growth.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Show Comments ()
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders