The Tourism Equity Fund (TEF) – intended to fast-track transformation within the tourism sector – will soon be open again for applications.
This was announced by the Minister of Tourism, Patricia de Lille, at the SATSA conference, held at the Durban ICC from May 6-7, who said she had intervened by settling the court case related to the TEF on April 26.
The TEF was launched in January 2021 by the Department of Tourism to provide a new financial support mechanism to stimulate investment and transformation in the tourism sector, combining debt finance and grant funding to facilitate equity acquisition and new project development.
The fund was placed on hold after lobby group, AfriForum, and trade union, Solidarity, brought the case before the High Court, contesting the legality and rationality of the 51% black-owner/managed qualification criteria for the fund. They suggest it deviates materially from the Broad-Based Black Economic Empowerment (B-BBEE) Act, read with the Tourism Code. The court eventually ruled that the foundation of the TEF was unconstitutional.
“We now have to redesign the TEF to align with existing laws. I am working on this with Small Enterprise Financing and the Minister of Small Business Development, Stella Ndabeni-Abrahams.
“And I have written to the Tourism Business Council of South Africa to give their opinion on the way forward,” said De Lille.
‘Need to look at existing businesses too’
She noted that, while bringing new entrants into the sector was essential, the TEF had to include existing businesses that needed support to grow.
“Furthermore,” De Lille pointed out, “transformation is not only about ownership. There are numerous ways to achieve transformation – including developing youth and women.”
The Minister acknowledged a comment from a delegate that once the fund was back in play, responses to applications had to be more speedily addressed.
