The government of South Africa is set to reduce spending on catering, entertainment and venues by 8% per annum, as well as reducing spending on travel and subsistence by 4% per year.
This was announced by finance minister Nhlanhla Nene in his recent budget speech.
Some observers believe the cut symbolises the bad shape of the South African economy, which has been going through hard times since President Jacob Zuma took power and which pushed it to second place in Africa behind oil-rich Nigeria.
But the announcement seems to have frustrated industry watchers and stakeholders.
Gillian Saunders, head of advisory services at Grant Thornton, said this week: “We are concerned that these cuts will have a massive impact on some of our already-battling hotels, conference venues, restaurants and entertainment facilities which the government uses.
“Government is a major purchaser in the hospitality and tourism sectors and significant cuts like these are going to hurt a number of businesses.”
Reacting to the minister’s announcement about the increase of the money allocated to the ministry of tourism, Saunders said the increase was still small and not enough to boost the development of the sector.
“If we really want the sector to perform, it needs a quantum leap in budget allocation. Our marketing budget doesn’t compare to other global competitive destinations especially if we take our weak rand into consideration,” she said.
Photo: The Sun City, a popular entertainment venue in South Africa