Why does tourism sector matter for South Africa’s economy?

ANC Veterans League remeMbers former Finance Minister Tito Mboweni Mboweni.
ANC Veterans League remeMbers former Finance Minister Tito Mboweni Mboweni.
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SPONSORED – Why does the tourism sector matter for South Africa’s economy? 
Before the arrival of the COVID-19 pandemic to our shores, the tourism sector contributed 3.7% to the national Gross Domestic Product (GDP). 
We continue to make steady progress as we recover by injecting some 2.3% in the year 2021.
Our industry has a huge impact on the services sector, manufacturing, and agriculture. 
It employs a significant number of young people in both urban and rural settings.
 Tourism has very few barriers to entry for both skilled and unskilled workers. 
For many years, tourism has been in the top 3 export earnings level for the country. This is a critical industry that needs to be leveraged better by all of us in both the private and public sectors.

In recent times, we have seen some of our sector’s listed establishments realising significant revenue growth as they released their financial results. 
These results demonstrate the strength of tourism, and therefore, the need to give the sector more attention and support. 

What this translates to, are real jobs for people. As the private sector lobby, we have partnered with organisations such as the Youth Employment Service (YES) to provide workplace experience for young people interested in tourism as a career. 
The entire value-chain of the industry is committed to this initiative. We are walking the talk. Our TBCSA office, for example, has transferred skills through interns who have graduated to full-time members of staff in the last four years. 
One of our interns has taken her on-the-job training to a work opportunity overseas. 
Many of our partners have similar stories to tell, and we continue to recruit more young people across the value chain of the tourism industry.  

Like many of its African peers, South Africa has a large population of young people, who through their skill and talent, can significantly contribute to economic growth. 
The United Nations (UN) highlights the benefit of having young people as part of the workforce, which it refers to as the “youth dividend”. 
The UN says economic growth occurs when there are more people of working-age (15 to 64) than those of non-working age (below 14 and over 65). 

Many of these young people are found in rural settings of South Africa.
 These areas would thrive if proper support was given to grow our rural economies. 
We need to be a country where people in the outskirts do not think moving to urban areas is their only solutions to putting food on the table. 

The tourism sector is perfectly poised to function in these under-served hinterlands. 
We can offer not just cultural tours, but jobs for those who reside in these areas. What these remote areas are crying out for, is undivided attention that’s purposeful. 
We are committed to this cause and believe that we need to hold hands to intentionally employ as many young South Africans as possible.

Another key area we are keen to advance in the tourism sector, is establishing a robust working relationship with some of the country’s development finance institutions (DFIs). 
We appreciate the support we have received from players such as the DBSA, IDC, and SEFA on our journey so far. However, more support is needed. 
The launch of the Tourism Equity Fund, together with other incentive programmes that are administered through the Department of Tourism, is critical for SMME development, entrenching transformation and inclusivity. 
These programmes are critical and need continuous funding and support. 

The jobs we create rely on our tourism businesses having sufficient capital investment to survive and thrive for future generations. 
We need investment in infrastructure, especially in the age of energy supply challenges and scarce water supply. 
Many businesses lack the funds to buffer themselves against these mountains that seem insurmountable at times.

That is why we appreciate the support and collaboration of broadcasters like eNCA in making tourism a cornerstone of job-creation and economic growth in South Africa.

When tourism thrives, other sectors follow. 

The issues discussed in this article will form part of the broader discourse at the 3rd instalment of the TBCSA annual tourism leadership conference, taking place from 18-20 September 2024. 

We look forward to seeing you there!

Article by: Jerry Mabena, Chairman of the TBCSA