PROMISES of economic
growth and rooting
out corruption have
generated an optimistic
response from leaders of
the travel industry who are
eyeing growth after years
of industry stagnation. This
was the sentiment TNW
gleaned following President
Cyril Ramaphosa’s delivery
of the State of the Nation
address on Thursday,
February 7.
President Ramaphosa said
government had responded
to the reality of a technical
recession with an economic
stimulus and recovery
plan that redirected public
funding to areas with the
greatest potential for growth
and job creation. Foreign
direct investment had grown
from R17 billion in 2017 to
R70 billion in the first three
quarters of 2018, according
to official data.
Andrew Stark, FCTG
Middle East and Africa
md, said in the context of
little to no industry growth,
he was “inspired” by the
president’s address. “When
we get the GDP growth in
the right direction, it will
bode well for all outbound
travel companies,” he said,
adding that the market had
not really grown in the last
four years. And without
growth, Andrew expects
continued cannibalisation of
the industry.
Founder and ceo of the
eTravel Group, Garth Wolff,
was similarly impressed. He
expects GDP growth to pick
up by between 1% and 1,2%.
However, he points out that
the president is faced with
challenges, with the ANC
split between two factions
(one being the Zuma camp)
and that the destruction
over the last decade will be
felt for a while, even though
SA is heading in the right
direction.
Garth expects that, after
the election, the President
will clean up his Cabinet
and lead by example, cutting
the size of the government.
“Anyone who is not
accountable will slowly be
moved out.”
Mladen Lukic, gm of Travel
Counsellors SA, emphasised
that while the address was
encouraging it remains a
speech until it is executed.
He sees 2019 in a positive
light, adding that once
there is clarity on some
fundamental policies, from
the government elected later
this year, corporate South
Africa and South Africans
can start rebuilding. “We are
very excited about this year,”
says Mladen.
The President spoke of the
damage mismanagement
and corruption had caused
to state-owned enterprises,
several of which he said
were in a “dire situation”.
To restore corporate
governance, new boards
had been appointed to
SOEs, including SA Express,
Eskom and Denel. Moreover,
a Presidential SOE Council
had been established to
reform, reposition and
revitalise SOEs.
“We want our SOEs to
be fully self-sufficient
and be able to fulfil their
development and economic
role,” he said. “Where
SOEs are not able to
raise sufficient financing
from banks, from capital
markets, from development
finance institutions or from
the fiscus, we will need to
explore other mechanisms,
such as strategic equity
partnerships or selling off
non-strategic assets.”
