Government cuts Department of Tourism’s budget to fund relief efforts

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DURBAN – The struggling tourism industry was dealt a blow yesterday as the government cut its budget allocation to the Department of Tourism to fund the country’s coronavirus relief efforts.

Tourism Minister Mmamoloko Kubayi-Ngubane said budget consolidation across all departments would affect some tourism programmes, as the government wanted to release funds to deal with the Covid-19 pandemic.

“Part of our budget allocation is for marketing and market access programmes wherein we fund small businesses to access local and global markets,” Kubayi-Ngubane said. “With the collapse of both the supply and the demand side of the tourism market, we have agreed that the funds allocated to both these programmes be reallocated to fund health where there is a greater need in this period.”

Finance Minister Tito Mboweni last week confirmed that he would redirect R130billion in an adjustment Budget from various departments’ programmes that could afford to be postponed, including tourism initiatives, as restrictions still prohibited travel.

Tourism is one of the sectors that will remain shut when the five-week lockdown is eased to Level 4 to allow the phased reopening of the economy from Friday.

Restaurants would, however, be allowed to operate and sell hot cooked meals only on a delivery service basis.

Tourism directly contributed an estimated R145.3bn, or 2.9percent, of total gross domestic product (GDP) last year, with more than 740000 people directly employed in the tourism sector. The industry received more than 1.8million international arrivals in the first two months of this year before the situation deteriorated drastically with the outbreak of the Covid-19 pandemic.

Kubayi-Ngubane said the country was unlikely to receive more international arrivals this year and thus would have to rely on domestic tourism.

“The sector’s recovery, which will be in the latter part of this year, will be driven by domestic tourism, and international tourism will only start coming into operation next year. In essence, the sector’s contribution to the GDP for this year will be very low.

“The global lockdown has resulted in the cancellation of conferences and other events. Initial estimates are that R746.8million in business is lost due to cancellations, with potentially 6039 jobs losses already.”

 

By Siphelele Dludla

Credit: www.iol.co.za

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