Cape Town-based tour operator Faith Mabureki, owner of Click and Drive, enquired at a recent TBCSA-Wits Business School Tourism Dialogue on tourism competitiveness and growth, “Vehicle operating licences – when is this going to be solved? It’s been years of the same song, but no one wants to deal with this.” A simple enquiry, but one that goes to the heart of what has turned into a complicated issue and a protracted nightmare for the tour operating segment of South Africa’s tourism industry.
The issue is multi-year backlogs for the issuance of new tour vehicle operating licences and renewal of existing ones, and has, most surprisingly, remained unresolved for years.
Faith, whose business is part of Seeza Tourism Growth Network, joins a long line of fellow tour operators large and small who have expressed anguish over the ongoing situation, which comes at significant cost to their businesses. Within the Seeza network, SME tour operators, Rushdi Harper of Wow Tours and Travel, and Velile Ndlumbini of Imonti Tours, have also expressed their pain over the impact of their tour vehicle licensing woes. So have numerous others within the SATSA stable who have witnessed this unresolved situation take a heavy toll on their businesses.
In close to two decades of professional work in regulatory and business licensing simplification, both in South Africa and countries such as Kenya and Rwanda, I have not seen such an eminently resolvable problem persist for so long, despite determined efforts both inside the government (right up to ministerial level), and within the industry, to overturn it. This is especially puzzling, given that the real issue is not even the legislation – namely the National Land Transport Act and associated regulations per se, both of which are supported by industry – but the implementation thereof.
What makes the situation all the more difficult to comprehend is that it runs directly counter to the government’s clear and consistent stance, held since the dawn of our democracy, on the paramount importance of creating an environment wherein businesses, especially SMEs, can thrive and create much-needed employment, unencumbered by burdensome regulation.
From its 1995 White Paper on National Strategy for the Development and Promotion of Small Business in South Africa, right up to its latest Economic Reconstruction and Recovery Plan (ERRP), the government has repeatedly acknowledged, correctly so, that inappropriately restrictive legislative and regulatory conditions are often viewed as critical constraints on the access of small enterprises into the business sector and as obstacles to growth. It has also repeatedly committed itself to rectifying this situation by means of consultative, transparent processes, with national economic growth and job creation the overriding objective.
There is no lack of appreciation by government of the importance of eliminating unduly restrictive regulations as a means to create an enabling business environment. Indeed, most recently, the government’s ERRP identified “regulatory changes to enable growth” as one of the key enablers to support the reconstruction and recovery of the country’s economy.
With all these clear commitments both in policy and action, one would have thought that resolving this pressing and often-raised issue within the tourism industry, would have been accorded the attention it warrants. It is impossible to speak of commitment to small business development, general industry growth and an enabling environment, and at the same time not act as a matter of priority to resolve so devastating a regulation-implementation problem.
No economy – least of all ours, which has been characterised by weak performance long before COVID-19 – can afford the impact of inappropriate or poorly implemented regulation:
- Creating unnecessary barriers to trade, investment and economic efficiency
- Slowing down business responsiveness to market changes and opportunities
- Diverting resources away from productive investments
- Hampering entry to new markets
- Discouraging entrepreneurship
- Reducing innovation and job creation
- Potentially threatening the legitimacy of regulation and the rule of law
It should be patently obvious why South Africa (projected by UNCTAD to be facing a staggering 8,1% GDP loss due to a sharp fall in international tourism receipts induced by COVID-19), needs to up its game in creating the right conditions for recovery, competitiveness, and growth.
It therefore comes as great encouragement that the ERRP identifies fostering tourism recovery and growth as one of the priority interventions and, alongside that, ‘regulatory changes to enable growth’ as one of the key enablers. It is equally comforting that in its Tourism Sector Recovery Plan (TSRP) the Department of Tourism sets 2021/22 (hopefully sooner than later), as a specific timeframe within which, working with the Department of Transport which is the custodian of the NLTA and its regulations, it will improve turnaround times in the issuing of tour operating licences.
Recognising, as the TSRP does, that one of the most devastating effects of COVID-19 has been the regression of tourism transformation, there can be no doubt whatsoever that any action that has the unintended effect of impeding independent tourism entrepreneurship and SME growth, sets tourism transformation back. That’s too high a price to pay.