Local Government support for tourism development in SA: briefing by Department of Cooperative Governance and Traditional Affairs

Meeting report

Department of Cooperative Governance and Traditional Affairs (DCOGTA)
The Department of Cooperative Governance and Traditional Affairs briefed the Committee on local government support of tourism development in SA. The delegation comprised of Ms Phumla Ndaba, Executive Manager: Economic Development DCOGTA; and Mr Kanyiso Walaza, Senior Manager: LED Policy and Practice. Ms Ndaba undertook the briefing.

The purpose of the presentation was to reflect on local government support to the tourism sector. Areas of emphasis included the legislative and policy context that included the Constitution and the White Paper on Local Government, and the link between local government and economic development. The Municipal Structures Act stated that tourism was the responsibility of district municipalities. The Municipal Systems Act enabled municipalities to establish and fund external mechanisms such regional tourism offices. The White Paper on the Development and Promotion of Tourism and the Tourism Act stipulated that tourism was private sector driven but was based in local communities. The National Framework for Local Economic Development (LED) was a revised version of the LED Framework and prioritised the tourism sector as one of the sectors to promote local economic diversification. The LED Policy Pillars/Thrusts were building a diverse economic base, developing learning and skilful local economies, developing inclusive economies, enterprise development and support and lastly economic governance and infrastructure. It was not the responsibility of local government to create tourism jobs but rather to see to it that the environment was conducive for the private sector to create jobs. It was recognised that the tourism sector could have an impact on the development of rural economies. The sector also had labour absorption potential and had low skills base requirements. The value chain for the sector was also very deep. On local government support to the tourism sector at national and provincial level, monitoring and evaluation of the functionality of the tourism function in municipalities was weak. It was conceded that DCOGTA was unable to provide a precise picture of what each municipality was doing on tourism. To a degree some municipalities had incorporated tourism into their Integrated Development Plans (IDPs) but no funding was provided. Some municipalities allocated personnel to the tourism function whilst others developed partnerships with the private sector.  The DCOGTA had conducted a desktop assessment of municipalities across South Africa. The assessment identified three categories of municipalities: those that were doing well (just over one third), those that were not doing well (just under one third) and finally those that had potential to do well (one third). The DCOGTA undertook a program of action and adopted the “back to basics” principle. The back to basics approach was about defining the most basic requirements of a functional local government system. The implementation of the back to basics approach was core to ensure service delivery and was central to fulfilling local government’s obligations in supporting the tourism sector. Intergovernmental relations between the three spheres of government were of great importance.

Some opportunities identified were the need to extend local government focus on tourism with the aim of encouraging entrepreneurship, creating new services, and driving economic and social development. Tourism towns/municipalities had to be prioritised so that tourism potential could be enhanced. The National Department of Tourism (NDT) should consider deploying technical experts to tourism municipalities to transfer skills and enhance capacity.
 
Challenges encountered were a lack of integrated and coordinated approach to planning and implementation. There were limited national or provincial resources dedicated to supporting local government tourism. There was a need to strengthen working relationships on tourism related issues between municipalities and regional stakeholders. Another challenge was limited experience and knowledge of tourism at local level. There was a lack of budget for tourism to develop bankable business plans and furthermore dedicated tourism personnel was lacking. There was additionally a lack of meaningful support to district and local tourism structures.
The DCOGTA had recently established a working relationship with the NDT to address the aforementioned challenges.

Discussion
Mr J Esterhuizen (IFP) was disappointed that members had only received the briefing document a few minutes before the briefing had started. In reference to the DCOGTA’s “back to basics” principle he said that the electricity crisis in South Africa had a direct impact on the tourism sector. There had also been a water crisis in Gauteng Province. The aforementioned were all part of a widespread decay of local government. Even the Gautrain was cancelled in August 2014 due to cable theft. In Gauteng train services had also been disrupted. He noted that there was an under spending of the local government budget by 24%. How could local government be a key stakeholder if it did not spend its funds?

Ms Ndaba noted that cable theft was a continuous challenge. A private sector company had approached the Department to say that power outages were affecting their operations. The DCOGTA consequently met with Eskom in the Johannesburg area and interventions were made with the help of the South African Police Services. 

Ms L Makhubele-Mashele (ANC) asked how municipalities supported the Expanded Public Works Programmes (EPWPs) in their areas. EPWP projects had many challenges. She noted that support was given to municipalities by the NDT on EPWP projects. The problem was that full cooperation from municipalities was not obtained. She asked how the Department assisted with capacity issues. She noted that dysfunctional municipalities should be assisted to get back on their feet. Strategies to assist should be looked at. These municipalities could not even consider dealing with tourism issues without sorting themselves out first. The affected communities should still receive service delivery.
She raised the issue of road infrastructure; roads in the Eastern Cape Province were in a dire state. There were potholes all over roads. She asked what the name of the programme was that had been put in place to deal with dilapidated road infrastructure.

Ms Ndaba, on the issue of potholes, asked if she could respond in writing to the Committee, as she was not aware of the programme that dealt with the issue. On the issue of EPWP the DCOGTA had a Community Work Programme where the community decided what they considered to be useful work. Other programmes on EPWP were on road maintenance, construction etc.

Mr S Bekwa (ANC) pointed out that little mention was made in the presentation in terms of local municipalities creating space for people in rural areas. What progress was being made in prioritising tourism at local level? He asked whether officials in the LED unit were competent to deal with tourism. What was the Department’s relationship with municipalities, provinces and national government?

Ms Ndaba on prioritising tourism stated that the NDT did have a partnership with the South African Local Government Association (SALGA) on capacity building. The DCOGTA together with the Department of Trade and Industry and SALGA had capacity building programmes. The training was not necessarily on tourism but on local government issues.

Ms P Adams (ANC) stated that if the 2014 LED Framework prioritised the tourism sector as one of the key sectors to promote local economic diversification, how was it to be measured? She also noted that the LED Policy Pillars covered Small Medium Micro Enterprises (SMMEs), Broad-Based Black   Empowerment, youth and women but what about persons with disabilities? She referred to the desktop programme of the DCOGTA in which it had done an assessment of municipalities and was able to classify them into three categories. Had the Department considered implementing a mentoring programme? The larger municipalities could coach smaller municipalities on best practise. Local tourism was important for job creation in rural towns. She was concerned about the lack of cleanliness of cities in South Africa. The five core pillars were in place to ensure that municipalities functioned well. Were there tools in place to measure it? She noted that the NDT had a tourism toolkit to develop tourism locally. The NDT and DCOGTA had to use the toolkit. The DCOGTA also had to address the issue of skills with SALGA. Tourism was a concurrent function and municipalities being at grassroots level therefore had to deliver.

Ms Ndaba noted the point made about disabled persons. She said that a mentorship programme was in fact something to consider. The issue of cleanliness came back to the implementation of the back to basics principle. She confirmed that tourism was a concurrent function amongst the three spheres of government.  Perhaps a reconsideration of the powers and functions of municipalities was needed. Mandates were there but the issue was about how the tourism function was to be done, especially between district and local municipalities. The function of economic planning should be done at regional level. She said that the NDT did have a relationship with SALGA, so SALGA was involved.

Ms S Xego-Sovita (ANC) was concerned about the DCOGTA’s mention that the private sector was at the centre of tourism. The Department was involved in the Integrated Development Plans of municipalities and also had a role to play. She asked whether the DCOGTA had influence on the demarcation of municipalities. The reality was that tourism knew no boundaries. Councillors and traditional leaders were having disputes over the issue of demarcation. If it was correct that the DCOGTA assisted municipalities with capacity building then perhaps a workshop was needed. Metros could also assist smaller municipalities with capacity building.

Mr J Vos (DA) was concerned that many municipalities around South Africa were in a state of collapse when tourism was actually a local issue. The issue was how the communities benefited from tourism. The DCOGTA was a key player to see that municipalities ensured that delivery took place so that the private sector could play its part in tourism. Those municipalities that were doing well should be incentivised and those doing badly should be fixed. The mentoring issue was a good point made earlier by Ms Adams. The point was made that IDP and LED processes were statutory processes hence the blame fell onto the DCOGTA. If tourism was not identified in IDPs then the Committee needed to ask the DCOGTA why this was so. The DCOGTA had to ensure that municipalities functioned well. The Committee needed the list of names of municipalities that the DCOGTA had identified as problematic municipalities so that they could be assisted. The National Tourism Sector Strategy (NTSS) stated that the NDT together with its sister departments had to identify all existing government resorts that were under developed. Many municipalities did not have the finances to develop the resorts. The resorts could be brought back on track if they partnered with the private sector. Government and municipalities owned a great deal of assets. He brought up the issue of a tourism office that was not being financed by the local municipality but rather by the community themselves. The community had contributed R37 000 towards covering the bills of the tourism office. The tourism toolkit should be forwarded to the Committee. He asked what the theme of the local government tourism conference was that was coming up in February 2015. The report of the previous conference should be forwarded to the Committee.

Ms Ndaba explained that on the LED the DCOGTA was prioritising the tourism sector. The DCOGTA was currently busy with the rollout of the LED Framework. There was also the rollout of the tourism toolkit. Greater intergovernmental relations were needed amongst the three spheres of government to make progress. The key role of the Department was to facilitate this integration. On incentivising municipalities that were doing well, it would motivate them to come up with new innovations. The tourism toolkit was useful but did not have the expected impact. The local government toolkit for tourism could be better implemented.
 
Mr Walaza, responded to the issue of IDP and LED planning. The DCOGTA saw an opportunity where the NDT and other departments could deploy capacity in municipalities to assist them.

Mr A Whitfield (DA) felt that the Eastern Cape was the most diverse province in South Africa in all senses of the word. However it was the second most badly performing province on domestic and international arrivals.
He asked whether there was a model/ intervention in place to provide knowledge and skills. If a municipality embraced tourism and the municipality was in trouble then tourism would also be threatened. Public-private partnerships were needed to protect tourism when municipalities got into trouble. He asked what the distinction was between a district municipality and a local municipality in relation to tourism, and how the gap could be closed when existing projects were working.

Ms Ndaba pointed out that the private sector depended upon the DCOGTA to provide the environment for tourism to flourish.

Mr Walaza said that support to municipal agencies was important. Generation of income needed to be sustainable. Legislation did not allow municipal agencies to generate income. The Department was developing a plan to make agencies more sustainable.

Ms E Masehela (ANC) said that if tourism was a driver for job creation then municipalities needed to be assisted. There were municipalities that had problems but yet they were passionate about tourism. She suggested that the DCOGTA put a policy in place that stated that a percentage of their budget must be used for tourism.

Mr P Khoza (EFF) asked what plans the DCOGTA had to monitor and evaluate municipalities. He believed that local government should be able to generate its own income. It was something that needed to be looked into. This could expand the tourism sector. He felt that the youth should be encouraged to study tourism. Did the DCOGTA offer bursaries to students? What marketing strategies were in place to attract foreign tourists?

Ms Ndaba said that the DCOGTA had not done community surveys to measure community satisfaction with the performance of municipalities. Visibility of government in communities was also important ie Thusong Centres.

Mr Walaza spoke to the issue of revenue generation of municipalities. It had not been included in the LED Unit but he had left it to be covered elsewhere. The issue was about implementing the back to basics principle. The DCOGTA was assisting municipalities on implementing the principle.

The Chairperson asked the NDT representatives present in the meeting to make an input.

The delegation from NDT comprised of Mr Beki Mathebule Director: Integrated Government, Ms Sibongumusa Ngidi Chief Director: Policy Development and Evaluation; and Ms Petra van Niekerk Parliamentary Liaison Officer.

Mr Mathebule responded that the NDT had identified gaps at local government. An analysis of IDPs had been done. Tourism was mentioned in IDPs but no funding was set aside for it. He confirmed that there was a tourism toolkit. The NDT tried to assess whether municipalities made use of the toolkit. Those municipalities who did use it found it useful, others had not used it. The NDT henceforth decided to do hands on training of municipalities. A total of 55 policy makers at municipalities had been trained. These included mayors, councillors and Member of Executive Committees (MECs). The problem was that policymakers did not understand tourism. The course did assist them. The DCOGTA had also trained 53 practitioners which included managers and officials. The only problem was that staff got redeployed and then the skills acquired were lost. A further 40 policymakers and practitioners would be trained in the future. Over the next five years the NDT would consider other interventions on capacity building.

Ms Ngidi explained that when people said that tourism was an unfunded mandate they did not fully comprehend what benefits tourism could bring. The sooner municipalities realised this, the better. The potential of tourism could be unlocked by training of local government.

The Chairperson asked what the role of provinces was to uplift local government relating to tourism.

Mr Ngidi said that NDT worked with the provinces. Provinces had identified the municipalities that NDT needed to train. Provinces did tourism development and marketing and were involved with the NDT. The NDT worked with provinces on the local government tourism conferences.

Mr Vos reacted to the comment made that when local government staff was trained often times when they changed jobs the capacity was lost. He asked what systems could be put in place to ensure that capacity remained behind when people moved on.

Ms Ngidi, on the issue of investing in individuals instead of systems, pointed out that the toolkit was a systematic intervention on how municipalities could plan for local tourism. 

Ms Xego-Sovita explained that on demarcation the issue was not about outside boundaries but about inner boundaries. The issue of movement inwards was becoming an issue and a problem. 

Ms Ndaba said that she could not speak to the issue of the Demarcation Board, as she had no knowledge of it. She did know that they were funded by DCOGTA. She asked if she could submit a written response to the question at a later time.

Ms Adams asked if there was a tool to measure the impact of the training that had been done.

Ms Ngidi, on monitoring the impact of the course that the NDT had provided to municipalities, said that participants were given assignments to complete. This monitored the impact that the course had.

Ms Masehela was concerned about the training offered to officials and policy makers and whether it would be able to cover the 283 municipalities that there were. She felt that it would take a long time to cover all the municipalities.

Ms Ndaba noted that the questions relating to infrastructure showed that emphasis needed to be placed on the implementation of the back to basics principle. She agreed that it was a critical area. Municipalities needed to be encouraged to implement the back to basics principle.

The Chairperson asked the NDT to provide its toolkit to the Committee.

The meeting was adjourned.