The Department of Tourism, in partnership with the Small Enterprise Finance Agency (SEFA), has launched the long-anticipated Tourism Equity Fund (TEF).
The fund will be used to provide debt finance and grants to black entrepreneurs in the tourism sector, and especially women and youth, to create a more inclusive and representative sector.
Delivering her opening address, Tourism Minister Mmamoloko Kubayi-Ngubane said that the tourism sector is well developed and has greatly contributed to the country’s economy, yet remains largely untransformed.
“Broadening participation in the tourism sector to South Africans of all races, ages and genders can only enrich the tourism sector to be more competitive and sustainable in the long run. As South Africans, we know and understand that our diversity is our strength and it is only when this diversity expresses itself in all spheres of our lives that we will be able to reap its benefits,” the Minister said.
The total value of the fund amounts to R1.2 billion, which includes R540 million from the Department of Tourism, R120 million from SEFA and R594 million from commercial banks which are participating in the programme. It will be managed by SEFA over the next three years, after which it will be evaluated and refined.
Although the fund was conceptualised prior to the COVID-19 pandemic, the Minister said that it has even greater relevance now as many tourism players look for opportunities to recover and rebuild their businesses.
The key objectives of the fund are:
- Fund commercially viable and sustainable majority black-owned tourism enterprises with a minimum of 51% black ownership including enterprises in rural areas and townships, to help create jobs, alleviate of poverty, fight inequality and promote growth of black-controlled tourism enterprises.
- De-risk the funding provided to tourism enterprises through long-term capital that will ease the debt repayment ability of black-controlled enterprises.
- Facilitate the participation of targeted groups such as women and youth in the priority tourism sectors as defined by the B-BBEE sector codes.