The recent 0.7 percent decline in GDP for the second quarter of 2018, resulting in South Africa entering into a technical recession has unsurprisingly left the country reeling. Without a doubt its effects will be felt for sometime to come – and unless something drastic is done – the lifespan of the negative effects might last longer; particularly for the most vulnerable and poor members of the South African society.
Of concern is that, all of this happens at the backdrop of concerted efforts by President Ramaphosa’s administration to attract the necessary investment into the country in order to stimulate economic growth and bring about the necessary change in the patterns of poverty, inequality and unemployment.
Agriculture, transport and trade were the largest negative contributors to growth in the GDP which resulted in the negative second quarter data shrinking the economy to a decline of 0.7%.A number of factors contributed to the decline in these sectors including a drop in the production of field crops and horticultural products as well as a decrease in land transport, air transport and transport support services.
Needless to say, this followed right on the heels of a first quarter GDP decline by a massive 2.2 percent due to a decrease in agriculture, mining and manufacturing. By its nature, there’s always a variance in the performance of various economic sectors at any given time. Due to various factors, a particular sector may perform better in one quarter and decline in the next and vise versa.
Important to note is that one of the sectors that provide a window of opportunity in terms of growth is the tourism sector, which if exploited tactfully can attract not only tourists, but investment, employment and improve the living standards of many. For this we need to look beyond the metropolis – our attention needs to expand to various parts of the countryside, endowed with potentially beautiful tourist attractions and historical sites.
According to Stats SA’s annual Tourism Satellite Account for South Africa report, the tourism sector directly contributed 2.9% to the South Africa’s GDP in 2016. Despite experiencing its own challenges in the past years, the sector outperformed other key industries in terms of job creation, adding just over 40 000 net new jobs to the economy over a five-year period from 2012 – 2016.
A recent report by the World Travel and Tourism Council (WTTC) states that in 2017 travel and tourism supported 1.5 million jobs, accounting for 9.5% of total employment in the country. The report estimates that by the year 2028, almost 2.1 million jobs in the country will depend on travel and tourism. The tourism industry contributes 9% of the total GDP of the country, once all the direct, indirect and induced benefits are taken into account.
Without a doubt, this is a sector that needs nurturing, planning and careful ‘exploitation’ for the benefit of economic growth and job creation. Like Soweto in Gauteng, South Africa is home to a vast array of townships and other localities that carry huge volumes of potential to attract tourism and investment. Soweto is known for its historical significance including the tragic events of 16 June 1976, as well as being the only place in the world to have been home to two Nobel Peace laureates namely Nelson Mandela and Archbishop Desmond Tutu. For this reason and others, tourists flock to Soweto daily to learn about and to be part of this history. As a result Gauteng tourism contributes significantly to the country’s GDP due to the interest generated in Soweto among others.
Part of what is the iconic Soweto today may well have developed organically due to its historical significance, but as things stand, most of what attracts tourists to the area has been deliberate planning including investment in infrastructure in the form of beaming restaurants, historical monuments, annual commemorations, recording and retelling of history which is provided on sites like the Mandela house.
If we are deliberate in our efforts in taking advantage of the consistently growing tourism wave, we need to start decentralizing tourism attractions to areas like Sharpeville in the Vaal, Egazini in Grahamstown (recently termed Makhanda) and Brandfort in the Free State among others. Sharpeville holds historical significance which can be a great exploit for tourism attraction, but that potential is severely under-utilized. The only time you hear about Sharpeville is on 21 March, beyond that it lies forgotten.
Grahamstown also holds historical significance, with historical sites including the battle site known as Egazini (Place of Blood), named after the 1818 battles of resistance. However, if you visit the town today, it is decorated by streets that are in a state of disrepair, an increase in squatter camps, unreliable sources of water and backlog in modern sanitation facilities. It also boasts high levels of unemployment. The only time there is an activity is during the annual June National Arts Festival. Brandfort’s home to where Winnie Madikizela-Mandela was banished for several years and holds in itself historical significance and an opportunity to lure tourist.
Paying attention to some of these quick wins could help promote employment in most of our provinces and perhaps stem the tide of most young people leaving their homes for provinces like Gauteng and the Western Cape in search for greener pastures – which in turn puts pressure on the resources of the visited provinces.
However, for this to take place we need to employ both the soft and hard approaches in making our local spheres attractive for tourism and investment. In terms of the soft approaches, municipalities need to understand and appreciate the value and importance of branding themselves, starting from simple things as websites, which serves as gateways to their unique offerings. Developing identities inline with the special features that each locality holds – and punt those hard enough to make it difficult for anyone not to want to experience.
Places like eThekwini Municipality have done well in this regard ensuring that they promote tourism and attract investment. To an extent that an array of activities that take place in Durban bring in a lot of investment into the province, thus creating employment for locals.
On the hard approaches, we need to promote good governance, professionalism and visionary leadership. The Auditor General’s report as well as the analysis done by the Department of Cooperative Governance and Traditional Affairs (COGTA) are both telling in terms of the state of affairs in most municipalities, a situation that can only be overturned in the same manner that created it – human behavior. There is also a need to promote the development of small to medium enterprises as well as to create market access for them.
If we can do these simple things deliberately and purposefully, our efforts would go a long way in ensuring that promoting brand South Africa and attracting investment not only happens at a high or national level, but that we also build from the ground up.
Mr. Sango Siviwe Ntsaluba, BCom, BCompt (Hons), CTA, CA(SA), HDip Tax Law, has been an Executive Chairman of Amabubesi Investments (Pty) Limited since 2006 and serves as its Chief Executive Officer. Mr. Ntsaluba is a Founding Member of Amabubesi Investments (Pty) Limited. H