Op-Ed: Tourism Is Larger Than Agriculture – Tourism Satellite Account

The South African tourism industry is larger than agriculture, contributing 2,9% of GDP, compared to 2% by agriculture, and 8% by mining. Tourism contributes R265,8 billion to GDP as reflected in results by the Tourism Satellite Account for 2016 produced by StatsSA.

The growth of tourism confirms that tourism is the new gold, a growth driver of South Africa just as gold mining had been a driver of our economy for several decades. This means our economy is changing and diversifying from the production economy (mining, manufacturing, agriculture) to the consumption economy of services such as tourism.

The TSA measures tourism to reflect its economic contribution to GDP. Tourism is not reflected in normal GDP estimates because it usually measures physical produce, whilst tourism is a service. The TSA is important because it improves the political importance of tourism by reflecting its economic contribution to GDP.

Tourism grows jobs
As mining is declining, tourism is growing, and tourism grows with jobs due to its labour intensive nature of tourism. This will dampen the blow of job losses in gold mining, which has a been a perennial jobs shedder.

In 2016 South Africa received 10 million international visitors, an increase of 13%. Tourism growth has always surpassed annual economic growth in South Africa for more than 20 years, and the creation of a separate Ministry of Tourism was necessary to ensure dedicated attention for this economic sector of promise and hope.

The tourists that arrive in South Africa spend on a multiplicity of products and services such as accommodation, food, transport, shopping, and entertainment. When tourists buy goods and services within a destination country, they pay VAT, which swells tax coffers.

The passenger airport tax that aviation passengers pay is used to fund the world-class airport infrastructure that is managed by the Airports Company of South Africa. The taxation of tourists was used to building infrastructure that is shared by tourists and locals. The VAT increase might dampen domestic tourism expenditure, but this must not deter our efforts to increase the number of international arrivals.

Majority of tourists come from neighbouring countries
Tourists from out neighbouring countries represent the sheer majority of arrivals to South Africa arriving by land. This places a responsibility to ensure that the road infrastructure is appropriate to cater for the volume of land arrivals. The major challenge at land-based border posts has been the abysmal levels of service.
The experience at Beitbridge is regarded as a form of adventure sport, as poor service has its own definition here, which is in stark contrast to airport-based ports of entry at OR Tambo, and Cape Town International Airport.

The poor service levels at border posts between South Africa and Lesotho have caused a diplomatic embarrassment for South Africa. His Majesty King Letsie III was reportedly mistreated by South African officials at the border between the two countries.

The Minister of Home Affairs Malusi Gigaba is urgently addressing the matter, and my hope is that this incident ensures that exceptional service becomes the hallmark of border engagements between our public officials and visitors to South Africa.
Lower appetite to host conferences in South Africa
For many African brothers and sisters, it remains impossible to obtain a visa to fortress South Africa when compared to the United States. The knock on effect has been a lower appetite to host conferences in South Africa by continental bodies, with our economy losing millions in expenditure and foreign exchange.

Removing visa requirements and increasing aviation traffic would increase tourist arrivals to a destination. These two measures can improve the competitiveness of destination South Africa. The recent diplomatic spat between Russia and many Western countries is an opportunity waiting for exploitation for a “Russia friendly destination’” such as South Africa which shares strong political and economic linkages with Russia.

The other crisis that has not been milked by South Africa was the Trump administration and its impact on Muslim tourism. Muslim tourists consider the United States as a no-go area, and South Africa, which is Muslim-friendly, should target outlays to reach more Muslim tourists.

Vital source of employment
Tourism can be used as a vital source of employment and economic growth to meet the structural challenges facing our country such as unemployment, and inequality. In order to succeed, tourism requires a collaborative effort between the public and private sectors to remove the red tape stifling the upward trajectory growth in tourism.

South Africa is the most beautiful country in the world, a World in One Country, and we must use these advantages to unlock growth that would restore dignity to millions of South Africans who remain poor and destitute. Tourism has the potential to surpass mining as the major economic driver of the economy.