By Simon Nare
Tourism Minister Patricia de Lille has expressed concern over the speed at which the Tourism Equity Fund was processed since applications were opened in November.
Only 20 applications have been approved thus far.
De Lille said the administration of the R1.2 billion fund by Small Enterprise Finance Agency was too slow.
“I remain seriously concerned about the speed at which decisions are taken on TEF applications and the rate at which Sefa disburses funds to the approved applicants.
“The more delays tourism businesses face in accessing finance, the more we are not achieving transformation and the creation of the muchneeded jobs in the tourism sector,” said the minister.
She said Sefa has reported that it was expanding on outreach activities, including hosting webinars, to provide step-by-step guidance to help applicants navigate the TEF application process to improve their chances of success.
The minister announced that the department would not be renewing its contract with Sefa for the next phase of the fund and apologised to the tourism sector for the poor performance of the application adjudication process
“I am appealing to Sefa to continue putting more meaningful work and effort into ensuring that applicants access the TEF urgently, and as agreed with them, to be diligent in discharging their responsibilities in managing the TEF,” she said.
These approved applications amount to R301 million.
KwaZulu-Natal is leading in both submissions and approvals, recording five approvals, followed by approvals for businesses in Gauteng, the Eastern Cape, Limpopo, the Western Cape and the Free State.
Two of them are for new businesses and 18 are for expansion of existing businesses.
The fund is a department initiative to provide financial support to tourism enterprises and to transform the sector. It follows a blended finance approach to provide a combination of debt and grant financing to facilitate equity acquisition and new project development in the tourism sector by black entrepreneurs.
De Lille said even though the adjudication of applications has been slow, there has been a high level of interest from businesses.
Under the Fund Management Agreement between the Department of Tourism and Sefa, the TEF aims to increase growth, transformation and stimulate more inclusive participation in the tourism sector, and address funding obstacles.
The Democratic Alliance has welcomed De Lille’s criticism of the slow pace and called for transparency in the processing of applications.
DA MP and tourism spokesperson Haseena Ismail said that while the approved businesses were a significant investment, “the real measure of success lies in the number of jobs created”.
He said the DA believed that the TEF must prioritise transparency and accountability in its processes to ensure that funds were utilised effectively and efficiently.
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