South African Tourism (SAT) has announced that it has utilized 72% of its budget for the financial year 2024/25. CEO Nombulelo Guliwe highlighted that this “demonstrates our dedication to maximizing our budget effectively.”
This statement comes in response to media reports alleging that the organization has struggled to fully use its annual budget of R1.2 billion, which may force it to return over R800 million to the National Treasury.
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Guliwe mentioned that the current SAT management and leadership team is committed to scrutinizing expenses thoroughly and intends to refrain from lavish spending despite accusations of not fully utilizing its budget.
“Although there may be misleading information claiming an insubstantial 80% surplus, we will not succumb to the pressure of impulsive spending,” she stated.
However, the precise details regarding the budget allocations remain ambiguous.
R100m Tender
The controversy centers around a R100 million tender for event management awarded to a novice firm for Meetings Africa and Africa’s Travel Indaba, a decision that SAT has contested.
In December 2024, SAT launched an independent forensic investigation into the event management tender, which is still underway.
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“As detailed in the announcement made on December 16, 2024, no vendor has been granted a R100 million event management tender,” Guliwe clarified.
Value of the Sector
In his most recent letter to the nation published on January 13, President Cyril Ramaphosa emphasized the importance of the tourism sector, particularly as the country gears up to host the G20 Summit, which is expected to be the largest tourism boost for the continent.
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The tourism sector is crucial for South Africa’s economic growth and job creation, with Ramaphosa noting in 2023 that the country welcomed about 8.5 million international tourists, contributing over R95 billion in expenditures.
“Our tourism industry has the capability to grow beyond its current extent,” Ramaphosa stated.
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“This year, we will host the inaugural G20 summit on African soil, utilizing this opportunity to promote South Africa as a premier tourism destination.”
Prospects
SAT has secured 53 bids for international events, expected to generate R616 million for the economy in the current financial year.
Over the long term, these events are projected to attract more than 24,000 delegates from 2024 to 2029, further enhancing South Africa’s reputation as a top destination for international conferences and events.
The World Travel and Tourism Council (WTTC) reported that tourism contributed 8.2% to South Africa’s GDP, both directly and indirectly, in 2023.
This sector also serves as a major source of employment, employing 1.46 million individuals in tourism as of 2023, with anticipations that this number could rise to 1.7 million jobs in 2024 once the data is confirmed.
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Research from Stellenbosch University reveals that for every 30 new tourists visiting a location, one new job is generated.
From January to October 2024, SAT recorded 7.2 million visitors to South Africa, representing a 5.7% increase compared to the same period in 2023.
Additionally, early data from the recent festive season indicates strong performance in the sector, with high occupancy rates and significant participation in events nationwide.
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