Tourism must be leveraged to grow South Africa’s economy

COMMENT

Earlier this year Team South Africa worked hard in Davos and the 2020 Mining Indaba to position South Africa as a favourable and, more importantly, reliable and secure investment destination.

Undoubtedly this drive will continue with a view to meeting President Cyril Ramaphosa’s ambitious target of raising $100-billion in investment over the next five years, which is a pillar of South Africa’s strategy towards economic growth and job creation.

It is commonly known that South Africa has a particular challenge of low growth, unemployment — particularly youth unemployment — and appropriate skills. Creating sustainable solutions for job creation and economic growth, including the much-needed development in peri-urban and rural areas, will therefore require very creative and innovative programmes. 

We should also begin to look at low-hanging fruit which will become catalysts and enablers for broader national priorities.

Tourism is one of those low-hanging fruits that South Africa should leverage and harness — not just as part of how we achieve our national priorities but to also showcase our country, our story, our people and our culture to the world. For South Africans it is sometimes also important to be reminded of the splendour and diversity of our country. I can think of no better sector to achieve this than tourism.

The World Bank in its report “Tourism in Africa: Harnessing Tourism for Growth and Improved Livelihoods” describes tourism’s main comparative advantage over other sectors by noting that “visitor expenditures [domestic and international] have a ‘flow-through’ or catalytic effect across the economy in terms of production and employment creation.” This means that the sector is able to create jobs and development at every stage.

This is echoed by the World Travel and Tourism Council (WTTC), which recognises that travel and tourism is one of the world’s largest employers and a key job creator creating one in every five new jobs in 2017. It also outperforms traditional sectors such as manufacturing, agriculture, retail and wholesale, forestry and fisheries and financial services. 

The sector can also contribute positively to youth employment targets and, importantly, also to transformation since it has also been shown to absorb higher numbers of women than other sectors. Research by the WTTC reveals that the female share of employment in travel and tourism in South Africa (53.7%) is higher than the proportion of total female employment in the economy (43.7%) — a trend echoed in 10 other G20 countries.

The international community is already leveraging the power of the tourism sector, with the Brookings Institute observing in 2018 that the industry is “playing an increasingly important role in the global economy, contributing 5% of gross domestic product (GDP), 30% of service exports and 235-million jobs. Each year, approximately one billion people travel internationally. By 2030, consumer spending on tourism, hospitality, and recreation in Africa is projected to reach about $261.77-billion, $137.87-billion more than in 2015.”

Importantly, the economic growth created by the sector impacts positively on the lives of ordinary people who are simultaneously beneficiaries and co-creators. Tourism has, the world over, been shown to be a sector in which people can simultaneously participate, and co-create their economic growth and development stories. It is a sector where our innate entrepreneurship skills can come to life. Many experiences that are currently popular in South Africa, like bicycling tours through Soweto, started from a life experience that someone was bold enough to build into a business.

The sector has already begun to contribute positively to the South African economy. To this end, the WTTC has noted that the 2018 contribution of the tourism sector in South Africa, directly accounted for 2.8% of real GDP, which amounts to R139-billion and this was projected to grow to R145.3-billion for 2019. The indirect contribution of the tourism sector to the economy’s GDP in 2018 stood at an even higher 8.2%, which captures the strong economic links to the supply and demand side that the sector has with other sectors of the South African economy. The tourism sector’s direct employment accounted for 4.2% of total employment in the South African economy in 2018 and this was projected to increase to 709 000 jobs in 2019, while tourism’s indirect contribution to total employment stood at 9.2% for 2018.

To build on this, we have ambitious growth targets for the sector aiming to attract 21-million foreign arrivals by 2030 and 4.3-million domestic holiday trips by 2030.

Yet as a country we are not unaware that there are some immediate challenges we must be responsive to in order to meet our targets. The important benefit of addressing these challenges is to build and protect the reputation of our country as a place where people should spend their money visiting, hosting conferences and even aspiring to live in.

Some of these challenges include energy and water security, which also affect tourists as well as operators, some of whom may be small businesses without the infrastructure to maintain supply.

Another one, which again affects tourists and citizens alike is concern for personal safety and security. Government and business are currently working together to devise and implement programmes to improve on this area. At the moment, the government has committed R40-million to fund initiatives to improve the safety of tourists while 5 000 new police officers have been deployed throughout the country at strategic points. 

We are cognisant of the need to communicate requirements for travel to, and within, the country clearly and consistently. We have learnt some harsh lessons from previous experiences.

In recognising the role of tourism in growing our economy and creating jobs we know that government, business and civil society must begin to work together to conceptualise and, more importantly, implement the frameworks we agree on. The minister of tourism has established a multi-sectoral stakeholder team which is called upon to discuss and come up with meaningful solutions. 

We have entered a new year and a new decade. Both bring new opportunities and understanding the needs of the country and the power of this sector to impact positively on these priorities, we have some clear targets. We are single-mindedly focused on ensuring that we meet our targets while contributing to a more developed, stronger economy and more socially cohesive nation in the decade ahead. 

Sisa Ntshona is chief executive of South African Tourism.

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Chief executive of South African Tourism Sisa Ntshona is urging South Africans to stay home until the Covid-19 crisis has passed
Sisa Ntshona
Sisa Ntshona is chief executive of South African Tourism
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