May 9, 2005

The IFP welcomes the new Black Economic Empowerment (BEE) charter for tourism, as announced by Minister of Environmental Affairs and Tourism Marthinus van Schalkwyk in Durban on Sunday, but raises concerns about its application and the potential limits it places on black tourism ventures.

"While the IFP believes that the new BEE initiative will benefit the industry in principle, we sincerely hope its implementation will be broad-based enough to prevent the emergence of yet another black oligarchy at the expense of a genuine economic empowerment of the masses," said Dr Lionel Mtshali who leads the IFP parliamentary caucus in KwaZulu-Natal and oversees the party's Finance and Economic Development portfolio.

The IFP has voiced this criticism before citing last year's R42 billion volume of BEE deals of which two-thirds, or R25 billion, went to two individuals within the ruling party.

As a political party that has preached the gospel of free enterprise, the IFP is also concerned about the popular perceptions of the current BEE charters.

"Too many people in South Africa are looking to the BEE as the only way of securing a stake in the economy. BEE should be a means of extending economic ownership, not an end in itself," said Dr Mtshali.

Under the latest BEE tourism initiative, 30% of businesses in the tourism sector are to be owned by blacks by 2014. "We in the IFP see this as an unnecessary cap placed on black entrepreneurial flair. As far as business and employment creation is concerned, sky should be the limit," said Dr Mtshali.

"A possible solution is to stimulate business and employment creation at all levels alongside the BEE. The focus must be on small and medium enterprises."

The IFP's concerns are clearly shared by the Southern African Association for the Conference Industry (SAACI) which already expressed relief that the charter will not target small businesses.

"It is heartening that the minister heeded concerns of possible negative effects on the tourism industry and announced that businesses with an annual turnover of less than R5-million will be exempted of this indicator," said the SAACI report.

Contact: Dr Lionel Mtshali, 083 256 4902