The Department of Tourism has urged applicants for the R1.2 billion Tourism Equity Fund (TEF) to be patient, as the dispute over the qualification criteria for the fund would have to be resolved in court.
The department announced its intention to defend the constitutionality of the fund’s criteria in court.
The TEF is managed on the department’s behalf by the Small Enterprise Finance Agency.
The TEF is intended to fund majority black-owned and black management-controlled tourism enterprises (minimum 51 percent) in accommodation, hospitality and related services, and travel and related services, products and initiatives, through a combination of grant funding, concessionary loans and debt finance to support equity acquisitions and new and expansion developments in the tourism sector.
In a statement yesterday, the department called on those who were working with these entrepreneurs to be patient and to understand that the matter was now before the courts.
“As our legal team prepares to present and represent us in yet another court battle on transformation of the tourism sector, we do so with our unwavering resolve that the fund is a necessary intervention, within the constitutional values and imperatives for the creation of an equal society and addressing the imbalances of our country’s past,” the statement by the Tourism Department said.
“It is our view that these perpetual obstructions to the transformation of the sector come at a high price for those who suffered as a result of serious marginalisation and oppression which dominated our unfortunate and sad history. Their only hope is derived from their rights accorded in our Constitution.”
AfriForum and Solidarity are contesting the legality and rationality of the 51 percent black owner/managed qualification criteria for the fund. They suggest it deviates materially from the Broad-Based Black Economic Empowerment (B-BBEE) Act, read with the Tourism Code. The code prescribes a formula for allocating points for B-BBEE compliance.
In a statement yesterday, AfriForum and Solidarity said they were ready to challenge Tourism Minister Mmamoloko Kubayi-Ngubane and would continue with a court application to have the TEF declared illegal.
The court granted an interdict to the two institutions on April 27 that prevented the government from paying out funds pending a court ruling.
“The Covid-19 pandemic and the government’s lockdown regulations have affected all businesses in the tourism industry, regardless of the owners’ race,” said Ernst van Zyl, campaign officer for strategy and content at AfriForum.
The tourism sector has been decimated amid the Covid-19 pandemic. According to the Tourism 2020 report released by Statistics SA, foreign arrivals dropped 71 percent from just more than 15.8million in 2019 to less than 5 million last year.
StatsSA said it was evident that the Covid-19 pandemic had hit the tourism industry hard across the world and in South Africa, mainly due to the lockdown and travel restrictions.
According to the report, the overall number of travellers (arrivals and departures) decreased by 71 percent between 2019 and last year.
The overall number of travellers decreased by 50.7 percent over 15 years, from nearly 24.6 million in 2006 to 12.1 million last year.