Minister of Tourism Mmamoloko Kubayi-Ngubane. Picture: Ntswe Mokoena/GCIS
Minister of Tourism Mmamoloko Kubayi-Ngubane. Picture: Ntswe Mokoena/GCIS

Tourism Minister Kubayi-Ngubane insists tourism fund is constitutional

By Zintle Mahlati Time of article published May 31, 2021

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Johannesburg - Minister of Tourism Mmamoloko Kubayi-Ngubane has instructed lawyers to defend AfriForum and Solidarity’s legal action in which they question the constitutionality of the Tourism Equity Fund (TEF).

"We must re-emphasise that our efforts to transform the sector remains steadfast,“ Kubayi-Ngubane said on Monday.

“We have instructed our legal representatives to proceed with our defence to stop attempts by Afriforum and Solidarity to oppose and render the criteria unconstitutional."

The TEF fund, which was launched in January, aims to provide a financing vehicle for black businesses and entrepreneurs to invest in businesses within the tourism sector. Total investment in the fund amounts to more than R1.2 billion.

It was created in partnership with the Small Finance Equity Agency (Sefa) and aims to help boost transformation in the tourism sector, she said.

"The TEF intendeds to fund majority black-owned and black management-controlled tourism enterprises (minimum 51%) in accommodation; hospitality and related services; and travel and related services, products and initiatives," she said.

The 51% black-owned minimum requirement for funding has been described by AfriForum as racist. It excluded other businesses from benefiting from the fund.

The group said that because the fund was launched as part of President Cyril Ramaphosa's recovery plan, the transformation component should be secondary to assisting all businesses impacted by the pandemic.

Kubayi-Ngubane said her office held meetings with AfriForum, explaining the fund was envisioned in 2017.

Sefa, which administers the fund, was prevented from continuing with the paying and receiving applications connected to the fund after AfriForum won a court interdict in April.

The court halted the fund until the main application was heard. She said it was unclear when the application would be heard but hoped the matter would be resolved quickly.

She said black businesses were being heavily affected by halting the fund.

"Prior to the interdict, Sefa reported that the value of the rand of total applications that qualify for final adjudication stood at about R5.6bn.

"It must be noted upfront that the delays in implementing the TEF will negatively affect black businesses which have already negotiated deals and applied for the funding through Sefa."

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Political Bureau

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