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The Importance of Local Government in Tourism Development Tourism Summit 17 September 2013 Cape Town Delivered by Mr V. Madonsela Directo


The Importance of Local Government in Tourism Development

Tourism Summit

17 September 2013 Cape Town


Delivered by Mr V. Madonsela

Director-General, Department of Cooperative Governance


The brief we received in our invitation to address this summit was titled: ��Significance of Local Government in Tourism Development��. As we considered this topic, we decided to rather adopt the title ��The Importance of Local Government in Tourism Development��. Part of the reason is that the ��term�� significance�� opens itself to other interpretations and we have decided on the more straight-forward term: ��importance��. We also considered that in fact, we could easily flip this title around and speak to the Importance of the Tourism Sector in Local Government as this topic is just as important to us in the Local Government Sector. Hence in my address I will speak to both issues.


An article that appeared recently in the Pretoria News, on Thursday, September 12, 2013 had the headline/caption: ��Tourists are lured by quality of our drinking water�� (Pretoria New, page 12 – Opinion Piece by the Department of Water Affairs, Forestry and Fisheries). The article states:

��The Department of Water Affairs is working closely with municipalities to ensure the high standards of clean drinking water in their respective jurisdictions.��

The article cites among other interventions the recognition of best practices in waste water management practices among municipalities through the awarding of the Green Drop certification programme.


In the context of the deliberations of this Tourism Summit, under the Theme ��Removing Barriers for Tourism Growth to Fulfill the National Development Plan��, the importance of the local sphere of government in Tourism development becomes immediately clear from this article. I will come back to this point later on in my talk.

This input is structured is follows:

  • We first address the question of why the local sphere of government must pay attention to any discourse on Tourism development by drawing on some of the mandating prescripts.
  • We then flip the coin and point out that in fact, mandating prescripts or not, the Tourism Sector is important as a driver for local economic development.
  • We further consider the Local Government challenges that are potential barriers to Tourism development and growth
  • Lastly we look at a Departmental response to the challenges and conclude with areas of possible collaboration between the two Departments: Cooperative Governance as well as Tourism

The Interface between Local Government and the Tourism Sector: The Constitution

As set out in Chapter 7, Section 152 of the Constitution, one of the objectives of Local Government is to promote social and economic development. We also know that one of the developmental duties of municipalities is to structure and manage their administration, budgeting and planning processes to give priority to the basic needs of the community, and to promote the social and economic development of the community. We further know that Local Tourism is singled out in Schedule 4 (B) is one of the competency areas of Local Government; and that in terms of Schedule 4 (a), it is also a concurrent responsibility between National and Provincial government. There are various other mandating prescripts such as the White Paper on Local Government and the Tourism Act, that basically make the case that the local sphere of government has a duty to promote and support economic development, within the confines of its powers and functions. From all this we make the conclusion that as a priority economic Sector of government, and a stimulus for economic growth and employment creation, Local Government has an obligation to support the development of the Tourism Sector.


To us within Local Government, Tourism Development fits within the Local Economic Development (LED) function of municipalities. In fact, in a typical municipality, all Tourism Development and support activities are undertaken under LED – and hence in our input, we make the point that we cannot separate our understanding of LED from understanding Tourism Development in municipalities.


The Importance of the Tourism Sector to Local Government

As a priority Jobs Driver within the New Growth Path, the contribution of the Tourism Sector to the South African economy has been very encouraging if not inspiring. The fact that between the years 2011-2012 tourist arrivals were above the global growth of 4%, recorded at 10.2%, that alone is a positive story line that demands our collective attention.

This 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), as also referenced in the National Development Plan. Lastly, 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.).

We are therefore making the point that the fact that 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.

Hence we are of the view that a growing Tourism Sector means a growing local economy. A growing local economy means we are able to increase the viability of our municipalities from revenue collection, and less dependency on social grants and the provision of free basic services.


The Importance of Local Government in the Development of the Tourism Sector

We now come back to the topic of the day, how and why the local sphere of government is an important enabler for Tourism Development. Simply put, Tourism products, attractions and experience play-out within a local area. Therefore, based on the services they (municipalities) provide, municipalities can either enhance or hinder the development of Tourism. This is the essence of our input.

Prof. Christian Rogerson, a South African expert in LED sums it up well when he points out that Local Government has a direct impact on the total Tourism experience of tourists, and further, that the competitive position and attractiveness of any Tourism destination is influenced by the diversity, quality and overall blend of its services and resources (Rogerson, 2013, Tourism and Local Economic Development: Issues for Local Government).

The White Paper on Local Government states that Local Government can play an important role in boosting the local economy by investing in what it terms ��the basics��. These could include providing good quality cost-effective services; targeted assistance to a particular Sector in the economy which has the potential to expand and create jobs; simplification of municipal procedures; marketing and investment support; small business support services.

Similarly, the White Paper on the Development and Promotion of Tourism (1996)  states that Tourism is driven by the private Sector and is firmly based in local communities. It further states that Local Government influences Tourism products in how they manage their socio-economic environment and how they provide services to their communities. The article cited earlier on, regarding how Tourists are lured to our shores by the quality of our drinking water, a co-function of municipalities, becomes relevant.

Some examples of how Local Government can ��make or break�� Tourism development include the following:

    • Provision of basic services (e.g. water, sanitation and electricity)
    • Provision and maintenance of public infrastructure (e.g. roads, energy, signage, public transport, parking)
    • Provision and maintenance of tourist attractions and other public amenities such as museums, art galleries, parks, maintenance of visitor information services, etc.
    • Promotion of the physical attractiveness and aesthetics of the locality (beautification of the area)
    • The regulatory environment: by laws; data-base of Tourism offerings; land-use planning and zoning

Additionally, the Department of Tourism highlights the following roles for Local Government (source: South African Tourism Planning Toolkit for Local Government):

    • Supporting sustainable Tourism Development through LED and Integrated Development Plans;
    • Appropriate infrastructure;
    • Public education, awareness, and general training;
    • Acting as catalysts for new business development and supporting existing enterprises (e.g. access to information);
    • Promoting partnerships between the public and private Sector;
    • Maintenance of the natural environment;
    • Political will to support the Sector.

Having considered all these possible roles for Local Government in ��Removing Barriers for Tourism Growth to Fulfill the National Development Plan�� (note: this is the theme of the summit), we now consider some of the challenges that limit the extent to which the local sphere of government is able to play its part optimally.


Challenges in the Local Government Sector in Supporting the Tourism Sector

To address this issue, we thought we would start off with an extract from The National Tourism Sector Strategy (Department of Tourism, pg. 29):

��Despite Tourism��s significance, though, Local Governments have few dedicated or part-time Tourism personnel; experience and knowledge of Tourism are extremely limited, and, with rare exceptions, no budget is allocated to Tourism planning and development activities.

The entrenched belief that the Department and Cooperative Governance and Traditional Affairs (COGTA) inherited from the former national department responsible for Local Government responsible for Local Government is that there is no need to plan or budget for Tourism support.

Therefore, capacity building for Tourism is critical to improve the overall planning for and management of South Africa��s Tourism Industry��


This statement basically makes following points:

  • capacity dedicated to the Tourism function is a challenge, as is Tourism planning;
  • leadership is needed from the national department that coordinates municipalities, namely, DCoG;
  • capacity building for Tourism will improve the planning deficiencies.

We will address the first and third issue first as they are interrelated, and then we will consider the second issue on leadership.

The first and third issues:

Firstly, we concur with the essence of the observations made above, i.e. that capacity in municipalities is a major challenge, particularly for LED and hence Tourism functions. In fact, other observations that have been made, linked to this issue are that as a result of these challenges:

  • Tourism is lagging behind in local  government (LG);
  • Tourism Plans fall outside IDPs, and therefore are not funded;
  • Lack of technical expertise for Tourism at LG level;
  • Misalignment of Tourism plans across the spheres of government (manifested at the LG level).

The manifestation of all these has been the following:

  • Deterioration in quality of facilities and services
  • Lack of awareness
  • Opportunities for new product development not maximized
  • Regulatory environment  unresponsive
  • Lack of support from local authorities

In responding to these issues, we must first understand where the Tourism Function might reside within a municipality; what issues such a unit deals with; and further, the general planning issues impacting on the Tourism Function. We will return to this issue as the main thrust of our input in a moment.

The second issue:

We now consider the second statement about the importance of clear leadership from DCoG, in order to guide municipalities. As the Department of Cooperative Governance has the overall responsibility to, among other things, develop, facilitate and monitor the implementation of relevant national policy and legislation seeking to transform and strengthen key institutions and mechanisms of local government to fulfil their developmental roleI, we thought it would be proper to first highlight the reference the Department has made to the Tourism Sector, in the National Framework for Local Economic Development, which was developed in 2006 by the then DPLG.

The Framework states the vision for Local Economies as:

��Robust and inclusive local economies exploiting local opportunities, real potential and competitive advantages, addressing local needs and contributing to national development objectives.��

In unpacking this vision, the Framework states that among other things, the local economies described above must capture social, cultural, recreational, sports and Tourism experiences (pg. 17).

In two other areas within the framework, emphasis is placed on the role the different spheres of government, the private and the community Sectors and all local role-players to promote LED. In this regard, the Framework further makes the point that economic growth, development and poverty relief goals can be achieved through a range of complementary developmental projects including��.Tourism, which capitalise on local opportunities and which address specific needs (pg. 54)

The point we make here is that the policy intent within DPLG, and therefore DCoG in as far as the importance of the Sector was clear, and remains clear. As the case was made earlier, we fully acknowledge the role of the Tourism Sector in stimulating competitive and sustainable local economies. Admittedly, the Department does not have joint programmes with the Department of Tourism presently, as the lead Department in the area of Tourism. But we believe that this presents an opportunity for joint programmes, driven from the national level.


Understanding the Tourism Function in Municipalities

As earlier indicated, the Tourism function in a municipality resides within the Local Economic Development Unit. Generally, the LED functions and units of municipalities are one of the most challenged units in terms of functionality. At the core of the problem is the fact that there are competing demands on the responsibilities of municipalities, and as we would know, service delivery tends to receive the primary attention. As such, functions such as LED unfortunately receive less attention. Other challenges worth noting are the following:

    • Conceptually, there is inconsistent understanding of what LED is and hence what an LED unit ought to focus on, hence the State of LG Report made the observation that ��LED has been found to be erratic in municipalities��
    • Because LED (and thus Tourism) is a concurrent function across the spheres of government,  there are challenges with alignment  in terms of policy, planning and implementation
    • LED is traditionally referred to as an unfunded mandate by municipalities. Hence the funding for most LED units (and hence Tourism Projects) is minimal.
    • LED human resources capacity in most municipalities is very minimal to make impact: a symptom of municipalities not understanding what to do with the LED function
      • In some municipalities, there is no Tourism Manager/Officer: all LED related functions, be they agriculture, enterprise development or Tourism development, depend on one single individual
      • Linked to capacity issues,  most municipal officials cannot access external sources of funding due to lack of capacity to develop bankable proposals and business plans

Unpacking the Planning Challenge Further 

From purely a planning point of view, the main challenge currently faced by municipalities is Sectoral planning in the development planning processes as many municipalities struggle to develop Sector plans (such as Tourism Plans). The Development of Local Tourism Plans and Strategies is usually an outsourced function with limited quality assurance, leading to limited ownership and understanding. There is also limited availability of local data, credible economic analysis of the local environment and evidence based strategic planning for the Tourism Sector. There are ineffective platforms dedicated to integrate planning at national and provincial level, resulting in ��the parachuting of initiatives to municipalities�� and further resulting in lack of buy-in and support.


Proposals on what is to be done

We have spent quite a bit of time dissecting the problem because we believe it is important to understand the issues faced by municipalities.

We now focus on what can be done:

  • Firstly, given the reality that the Department, together with municipalities are not necessarily Sector specialists in the field of Tourism Development, partnerships are critical between the two national Sector Departments for the benefit of municipalities and the Sector.
    • In this regard, we believe that the Departments should interact more closely in policy development initiatives. Currently, the Department is updating the 2006 LED Framework, and will further be working on a comprehensive strategy in the following financial year. This is a perfect opportunity for the Tourism Sector to influence the future direction of municipalities in terms of promoting and supporting the Sector.
    • Secondly, we believe that as in the example of the Department of Water Affairs, Forestry and Fisheries that was provided at the beginning of this input, the two Departments (DCoG and Tourism) should work closely to provide technical guidance to the local government sector. This could be in the area of capacity building; the development of norms and standards; research and development; and so forth. 
  • Secondly, the reality is that LED is under-funded, and consequently, so is Tourism in municipalities. We invite the Department of Tourism to consider specific funding directed at municipalities, to promote Tourism at that level. The two Departments could work jointly to consider the model and configuration of such funding to ensure that there is accountability and impact. 
  • In terms of capacity building, we understand that the Department of Tourism, in partnership with SALGA is started to look at training for municipal officials. We would like to be part of this intervention in order to ensure alignment with other training interventions and overall policy direction for LED. Equally, we would like to support the roll-out or piloting of the South African Tourism Planning Toolkit for Local Government that was developed by the Department of Tourism. 
  • DCoG has established a National IDP Support Team whose function is to support development planning processes in municipalities. This includes assisting municipalities to develop Sectors plans (e.g. Tourism). The benefits of improved integrated planning for Tourism imply that other Sectors such as Infrastructure, Community Serves and Safety, etc., can develop support plans to promote the Sector. Additionally, provincial and national government gain confidence in allocating own resources. The Department of Tourism should use its participation in this structure to influence municipal IDPs. 
  • DCoG has developed a Revised IDP Framework for municipalities outside metros and secondary cities which amongst other things provide guidelines on how to integrate Sector plans in the IDP. 

    In essence, our message is that we believe the opportunities for collaboration between our Departments are extensive. Therefore, in true Cooperative Governance culture, we can in deed do more, together.


    I thank you.


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