Tourism Deputy Minister Fish Mahlalela
The Tourism Transformation Fund (TTF) has approved transactions to the value of R272-million since its inception in 2017.
The TTF was launched as a collaborative effort between the Department of Tourism and the National Empowerment Fund (NEF) to foster economic transformation and empowerment in the tourism sector.
The fund is administered by the NEF on behalf of the department and offers comprehensive funding solutions tailored to the diverse needs of black-owned enterprises across the tourism value chain.
Through a combination of grant funding, debt financing and equity contributions, the TTF facilitates capital investment in tourism projects, empowering entrepreneurs to start new businesses and to expand existing enterprises.
In this way, the TTF aims to catalyse the growth and emergence of a new generation of black-owned tourism enterprises.
Of the TTF’s total transactions since 2017, six are operational, six are under construction and ten are in earlier stages of development.
The fund has also supported the creation of 1 047 jobs so far.
Twenty-three of the businesses supported by the TTF are majority black women-owned, while 27% of the businesses are owned and managed by young people.
“By providing targeted support to black-owned enterprises, we aim to create a more equitable and prosperous industry that benefits all South Africans,” says Tourism Deputy Minister Fish Mahlalela.
The grant funding provided by the department under the TTF is capped at 50% of the total funding required by an enterprise, for up to a maximum of R5-million per successful applicant. The balance is made up of debt finance and equity contributions by the NEF or other development finance institutions, as well as the owners’ contributions.
Mahlalela says that, while there has been some growth in the number of new black-owned small and medium-sized enterprises entering the tourism sector, as well as transformation by existing large tourism players, the overall pace and extent of transformation in the tourism sector has been slow.
“Transformation efforts are yet to sufficiently change the structure of the sector to facilitate equitable growth with sustained positive socioeconomic impacts for the people of South Africa,” he states.
Therefore, government is focusing on more targeted interventions such as the TTF. To date, application patterns have demonstrated a significant demand for funding among black entrepreneurs countrywide for tourism-related funding, NEF acting CEO Mziwabantu Dayimani says.
Mahlalela concludes that there are many more untapped opportunities for funding and transforming the tourism sector and the TTF will continue to pursue inclusive growth, job creation and women- and youth empowerment in this regard.