Local Government Support to Tourism Sector –Development

1. Department of Cooperative Governance Local Government Support to Tourism Sector –Development Prepared for: Tourism Portfolio Committee 7 November 2014

2. Purpose of the Presentation • In response to the invitation by the Portfolio Committee on Tourism, the purpose is to reflect on local government support to the development of the Tourism sector. • The presentation will also reflect on key opportunities and challenges in relation to the development of the sector, from a local government perspective.

3. Areas of Emphasis • Legislative Context • Local Government & Economic Development • The Tourism Sector and the Development of Localities • Local Government Support to the Tourism Sector • The Back to Basics Approach to municipal service delivery

4. “A capable state is an essential precondition for South Africa’s development. The market cannot resolve all the country’s challenges; many require direct interventions by an effective government that delivers public goods of high quality – education, health services, economic and social infrastructure – guarantees the safety and security of its citizens, and provides an enabling environment for private investment.”

5. Introduction • In local government, the functional area of Tourism Development is intrinsically linked to the overall functional area of economic development. • The discourse around the interface between local government and the tourism sector, has to be within the context of a conceptual understanding of the interface between local government and economic development. • From a powers and functions perspective – the discourse has to be framed from both directions: (a) how the local government sector supports and reinforces the tourism sector; and (b) how the tourism sector reinforces and supports local government to achieve tourism development goals

6. Legislative and Policy Context 1 • Local government must promote social and economic development; it must structure and manage its administration, and budgeting and planning processes to promote the social and economic development of the community. • Schedule 4 (a) & Schedule 4 (B) - Local Tourism is a concurrent responsibility between National and Provincial government. • powers and functions of local government to exercised to derive impact on the basic needs of the poor, and on the growth of the local economy • LG must provide an enabling environment for economic development • LG must invest in “the basics” (i.e. providing good quality cost-effective services) • . Constitution White Paper on LG

7. Legislative and Policy Context 2 White Paper on the Development and Promotion of Tourism (1996) & Tourism Act (year?) LG Structures Act & LG Systems Act • Tourism is highlighted as responsibility of District Municipalities in the Municipal Structures Actsec 84 (m) • Section 78(3) of Systems Act enables municipalities to establish and fund an external mechanism such as a Regional Tourism Office to render Local Tourism Destination Marketing, Centralised Booking and Information Services. • Integrated Development Planning • Tourism is driven by the private Sector and is firmly based in local communities. • Local Government influences Tourism products in how they manage their socio-economic environment and how they provide services to their communities • Set out a range of roles and responsibilities of local government in fulfilling the function of “local tourism”

8. Strategic Frameworks and Tools 1 • Recognise tourism as the primary stakeholder • Assign a range of functions, to ensure responsible tourism, especially on projects that benefit the community; eg: • Funding / budgeting for tourism initiatives • Skills and capacity to support tourism initiatives • Asset identification • Tourism friendly by‐laws; • Tourism infrastructure investment • Managing tourism information including signage and information centres • The Toolkit is a very robust tool that provides guidance on how (some of) these functions are to discharged

9. National Framework for Local Economic Development • The National Tourism Strategy points to a weakness in national LG strategic planning – it indicates that Tourism is not prioritised at the national LG level, ie. by CoGTA • The recent (2014) LED Framework prioritises the Tourism Sector is one of the key sectors to promote local economic diversification (it prioritises other sectors as well, particularly those in the New Growth Path) • However, the Framework is emphatic that sector prioritisation has to be evidence based (based on economic analysis and profiling. In this regard, not all municipalities have a distinct comparative and competitive advantage in Tourism

11. The Importance of the Tourism Sector in the Development of Localities • Tourism Sector is also acknowledged as one of the few Sectors, apart from Agriculture and Agro-processing that have the potential to make an impact on developing rural economies (e.g.: through eco-tourism and culture based industries) • The Sector is recognised for its labour absorption potential, and the low skills base requirements. • The value chains in the Tourism Sector and the overall impact on other sub-Sectors and activities within a local economy imply that the economic impact of one Tourism offering or product is felt widely within the local economy (e.g. transport; catering; accommodation; banking etc.). • The job creation contribution of the Tourism Sector and the overall expenditure by tourists takes place within a local area, thus contributing to local economic development, job creation, and the overall economic viability of municipalities is significant from a Local Economic Development point of view.

12. The Importance of the Tourism Sector in the Development of Localities • Tourism generates widespread benefits and impact to the economy and society. • Further, tourism is a source of revenue (foreign exchange earnings, tax revenue) to the government because of its multiplier effect, could provide opportunities for local economic development (LED). • The direct, upstream and downstream industries involved in tourism activities have the potential for creating sectoral linkages and economic opportunities in the localities. This is important as we emphasis the economic diversification in regions. • The National Development Plan (NDP) noted that increased job creation could result from tourism, and emphasised the need for collaboration, planning and priority-setting. • Strengthen Municipal Councils internal coordination of tourism responsibilities i.e. how Council organises its internal structure to facilitate its role in tourism; • The need for development of tourism sector strategies within Tourism Hotspot Municipalities, and increased use of performance measurement to gauge the success of Councils tourism strategies and plans

13. Local Government Support to the Tourism Sector The monitoring and evaluation of the functionality of the tourism function in municipalities in provinces and national government is currently weak. Although a number of municipalities are implementing programmes to support the sector, there is no consolidated data-base to provide a consolidated view, however: • Metros are generally leading in terms of providing services to the tourism sector (e.g. tourism-visitor information centers; signage; grading) • To a degree, municipalities have incorporated tourism into their IDPs • Other municipalities have developed tourism master plans, and generally, tourism features in their LED strategies • Some municipalities have specific tourism personnel assigned to the function (e.g. Tourism Officers/Managers) • However, there are no clear performance measures relevant to the tourism function in order to measure impact • Other municipalities have developed collaborative partnerships with tourism business formations/associations, although this requires strengthening

14. Back To Basics Approach • COGTA conducted a desk top assessment of municipalities in all nine provinces • The assessment sought to identify three categories of municipalities: • Those that are doing well • Those that have a potential to do well • Those that are not doing well • Then a program of action – BACK TO BASICS

15. Back To Basics Approach • Factors considered in the review: Political stability, Governance, Service delivery, Financial Management, Institutional management, Community satisfaction • The Back to Basics Approach is about defining the most basic requirements of a functional local government system • A well functioning municipality: • Political stability • Governance • Service delivery • Financial Management • Institutional management • Community satisfaction • The implementation of the Back to Basics approach to service delivery is core and central to fulfilling local government’s obligations in supporting the tourism sector

16. WHAT DOES “GETTING THE BASICS RIGHT” MEAN? 1 4 5 1 2 3 Sound financial management & accounting Good governance and transparent administration Adequate and community-oriented service provision Robust institutions with skilled and capable staff Putting people first: let’s listen and communicate

17. BACK TO BASICS Providing a basket of basic services Keeping the municipality clean Fixing leaking taps Cutting the grass

18. BACK TO BASICS Working street lights Providing a basket of basic services Repairing Pavements Patching potholes

19. OUR OBJECTIVE: Building Capable Local Government Ensure capable and competent staff Effective credit control and debt collection policies Infrastructure audits, maintenance plans & expenditure Capacity building for councillors Develop and implement Audit and Post Audit Action plans. Ensure healthy political / admin interface Build institutional systems and processes

20. How is the Back to Basics approach going to promote the development of the tourism sector? Growth of Tourism Sector Job Creation Revenue Generation Economic Growth &Development of Localities

21. Opportunities • There is a need to extend local government focus on tourism with the aim of encouraging entrepreneurship, creating new services and driving economic and social development. • There is an opportunity to prioritise tourism towns/ municipalities and have a clear targeted government programme to enhance tourism potential • The Department of Tourism could explore deploying technical experts to tourism municipalities to transfer skills and enhance their capacity to plan and maximize the impact of the sector

22. Challenges • Integrated and co‐ordinated approach to planning and implementation: • Limited national or provincial resources dedicated to supporting local government tourism; • Strengthening working relationships on tourism‐related issues between municipalities and regional stakeholders through collaborative alliances. • Limited of experience and knowledge of tourism at the local level, e.g. all municipalities have tourism as their priority sector • Lack of budget for tourism ability to develop bankable business plans • Local Governments have few dedicated Tourism personnel; • Meaningful support to District and Local Tourism Structures DCoG recently established a working relationship with the Dept of Tourism to address all these challenges

23. Conclusion • DCoG acknowledges that as a dynamic, growing industry, tourism can make a positive contribution to economic development. • DCoG is currently refining the understanding of the powers and functions of LG, in order to set a common understanding of the parameters and extent of LG responsibilities in general, not just in economic development • The Department has recently established collaborative partnership with the Department of Tourism, as the lead Department in the area of Tourism. This partnership presents an opportunity for joint programmes driven from the national level. • The cornerstone of developing the sector, from a local government perspective, is the implementation of the Back to Basics Approach/Campaign to local

24. “In a society with deep social and economic divisions, neither social nor economic transformation is possible without an effective state. The state provides the institutions and infrastructure that enable the economy and society to operate. Its ability to carry out these functions has a profound impact on the lives of all South Africans.”National Development Plan