ANDILE NTINGI: Tourism must be made the centrepiece of SA’s economy

SA traditionally earns most of its foreign currency from exporting minerals such as gold, platinum, coal, diamonds and a host of others.

But there was a time when our country’s economic policy-makers pinned their hopes of diversifying our export earnings away from minerals through increasing industrial exports as part of an attempt to replicate the Chinese model of manufacturing as a centrepiece of the economy. 

This strategy hinged on positioning SA as a supplier of cheap, reliable electricity to attract manufacturers to our shores and turn the country into a formidable industrial exporter. To put the cherry on the top, we initiated industrial development zones (IDZs) at Coega, near Gqeberha, East London and Richards Bay to entice companies wishing to produce goods for export markets.

At first this strategy appeared to be working when Canadian aluminium producer Alcan took a bite at our “value proposition” cherry of being a cheap, reliable power producer. In 2006 Alcan announced plans to construct a $2.7bn aluminium smelter in Coega after signing a 25-year power supply agreement with state-owned power utility Eskom.

However, this investment never materialised after Alcan and Eskom decided to terminate the agreement in 2009 when SA experienced power blackouts, which continue to this day.

There were other potential large-scale aluminium producers that were interested in investing in SA, including Rusal, Russia’s biggest aluminium firm, but it too pulled out due to power shortages.

While SA generally struggles to attract large manufacturers due to electricity constraints, another industry that is a strong foreign currency earner and job creator is often overlooked. That industry is tourism.

It is low-hanging fruit that is ripe for picking, is not energy intensive and can help improve SA’s balance of payments through earning more foreign currency. Our country is blessed with God-given natural beauty and tourist-friendly citizens, which we must tap into to drive economic growth and generate employment for millions of unskilled and semi-skilled South Africans.

When international tourists come to our country they bring money that is spent on transport, accommodation, food, entertainment and many other activities. In turn, this expenditure supports employment in businesses such as restaurants, hotels, shops, nightclubs, game reserves, tour bus operators, and other businesses in the tourism value chain.

In 2019 domestic and international tourists spent R451bn in SA, according to marketing agency SA Tourism. No effort must be spared to boost tourism to recover to pre-Covid-19 levels. In 2019 10.2-million international visitors entered the country, which is still far off the government target of 21-million international tourists to our country by 2030.

Foreign tourist arrivals are hovering around 5.6-million a year, which means this market segment must grow at about 18% cumulatively over the next seven years to achieve the 2030 target.

Our country has an abundance of tourist attractions that can steer us towards that target if we step up our marketing efforts to sell SA as an attractive and favourable destination. We have everything the world wants, from wildlife to coastlines, nightlife, cuisine, heritage sites, deserts, green African savannahs and picturesque mountains, including the world-renowned Table Mountain in Cape Town.

For nearly two decades tourism has been increasing its contribution to the economy and employment. According to Stats SA tourism contributed 3.1% to SA’s GDP in 2005 and employed 475,664 people that year. Today it accounts for roughly 3.7% of GDP and employs about 773,533 people.

The sector has added more jobs to our economy than agriculture, construction and manufacturing. However, there is room to increase its economic contribution considering that in tourist magnets such as France, Spain, Greece and Thailand, tourism contributes far more to their economies.

In France, the world’s most visited country, tourism contributes 8% to GDP and in Spain, the second most visited country in the world, tourism accounts for 15% of GDP. In Greece and Thailand the sector is the foundation of these countries’ economies, contributing 28% and 18% to GDP respectively.

To boost tourism the SA government must implement several initiatives. High crime levels, a restrictive visa regime and poor roads and transport infrastructure in some parts of country are bottlenecks that must be urgently dealt with.

The Western Cape receives more foreign tourists than any other province in SA because it has good infrastructure and policies that stimulate tourism. KwaZulu-Natal and Gauteng also have better infrastructure than other provinces, but it needs to be maintained better.

Then there is Eastern Cape, nestled on the coastline between the Western Cape and KwaZulu-Natal, which has huge tourism potential but is held back by poor infrastructure. The Eastern Cape’s gorgeous beaches, such as Mazeppa Bay, Coffee Bay, Qolorha Beach could be magnets for tourists and provide sustainable employment to poor villagers living there. But the roads leading to these hidden gems are atrocious.

I drove to Mazeppa recently on a 70km gravel road from Butterworth on the N2 highway, a trip that was worth the trouble because of exposure to the area’s majestic scenery and heritage. Along the route I got to see traditional Xhosa huts built on lush, green open veld and rolling hills.

I also got to see women dressed in traditional Xhosa attire and men carrying knobkerries, all untouched by Western civilisation. Then I saw this beautiful gorge covered by a natural forest, probably 15km from Mazeppa Bay, which was striking to look at. As I was approaching the beach I was welcomed by a natural forest made up of palm and acacia trees.

The Wild Coast is one the few areas on the SA coastline still left as it was created by God. Human encroachment has bypassed it. But I think it is time to open this beautiful part of our country to tourists as part of the strategy to create more destinations for local and foreign visitors. However, this endeavour will require building the necessary infrastructure, including constructing tarred roads and accommodation.

I hope some of the issues raised in this article will be discussed at the upcoming Meetings Africa 2023 conference at the Sandton Convention Centre in Johannesburg from February 28, where tourism industry stakeholders will gather to discuss strategies to grow the sector. The time is overdue to make tourism a centrepiece of our economy.

• Ntingi is founder of GetBiz.