President Cyril Ramaphosa said the country must ensure that it did not simply return to business, but that the pace towards achieving transformation goals was accelerated.
He was speaking at the launch of the Tourism Equity Fund by the Tourism Department and the Small Business Department.
The president said tourism sector was resilient and could rebound from periods of crisis.
The Fund is aligned with the National Tourism Sector Strategy of 2016-2026, which places significant emphasis on a transformative and inclusive tourism economy.
The Tourism Department will inject just over R1.2-billion to provide opportunities for black-owned enterprises and those owned by women and from disadvantaged backgrounds, to buy shares in companies in the tourism sector.
The Department also said that an additional R540 million would be paid out over three years.
Ramaphosa said it would focus on transformation, rural and township tourism development, enterprise development and investment.
“The Tourism Equity Fund is informed by the recognition that the capital-intensive nature of the industry prevents many black-owned tourism enterprises from growing and developing,” he said.
“By providing access to finance for black-owned commercially viable tourism projects, the Tourism Equity Fund intends to address this challenge. As a combination of grant funding, concessionary loans and debt finance, the Fund will cater to the specific needs of black-owned businesses to acquire equity, invest in new developments or expand existing developments.”
South Africa is regarded as one of the world’s most popular tourism destinations. It directly accounts for 2.9% of South Africa’s GDP and 8.6% indirectly. It supports over 1.5 million direct and indirect jobs.
Small Business Development Minister Khumbudzo Ntshavheni said the fund would focus on subsectors including accommodation, hospitality, travel and related services.
“We have committed to position the Small Enterprise Finance Agency as a leading government financing support agency for SMMES in the country,” she said.
“This means that beyond the funding responsibilities of SEFA, we have positioned SEFA to mobilise and partner with other SMME funders including commercial banks, as evidenced through the Tourism Equity Fund and our other schemes such as the Spaza Support Scheme and the Fruit and Vegetable Vendors Support amongst others.”
The goal was to leverage government funds to improve access to other funds by SMMEs, Ntshavheni said.
The financial support would be provided as funding to buy shares in companies within the sector, as asset finance and working capital that would be used for operational purposes, and also as funding for existing companies’ assets to set up new entities.
“The grant capital injection would be up to a maximum of R20-million as determined by the fund scorecard. Funding will be limited to a maximum of R15-million per enterprise.”
The fund may only be accessed by entities that are 100% owned by South Africans.