Tourism industry has the potential to reignite SA’s ailing economy

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The tourism industry has the potential to reignite South Africa’s ailing economy, but more support will be needed from South Africans and from the government giving the green light for reopening borders.

The tourism industry has the potential to reignite South Africa’s ailing economy, but more support will be needed from South Africans and from the government giving the green light for reopening borders.

The shocking announcement of a 51 percent decline in gross domestic product (GDP) during the second quarter had raised the questions of what would need to be put into place to aid the ailing economy, which was already in the doldrums prior to Covid-19, said Tourism Business Council of South Africa (TBCSA ) chief executiveTshifhiwa Tshivhengwa.

A PWC Public and Private Growth Initiative Report (2019) showed that tourism was the one industry in South Africa with the greatest potential to stimulate inclusive economic growth and employment, creating the greatest multiplier effect – in terms of jobs, growth and export potential.

This had also been stated by the government,Tshivhengwa said.

However, targeted economic stimulation and favourable policy decisions were required for the sector to flourish.

Tourism’s contribution to employment was already estimated to be larger than the individual contributions of agriculture, automotive manufacturing, chemical manufacturing, and mining, with some 1.5 million people employed directly and indirectly through the sector.

It generated R120 billion in foreign exchange from visitor receipts in 2018, adding up to about 8.7 percent of South Africa’s exports – second only to mining.

Further, as an apex sector, it has a long and deep supply chain into industries such as vehicle manufacturing, agriculture, fuel, and other manufacturing. For every R1 of direct GDP impact, R1.50 was spent on supply chain and capital – offering many small, medium and micro enterprises opportunities, he said.

“Tourism can be South Africa’s economic lifeline, but only if international borders are opened up soon,” he added.

The TBCSA’s Travel Safe-Eat Safe protocols and programme, endorsed by the World Travel and Tourism Council (WTTC), had already been rolled out widely across the tourism sector to ensure the safe reopening of the industry.

Source: IOL