If ever there was a perfect example of South Africa requiring a burning platform before taking decisive action on the economy, it’s encapsulated in Home Affairs Minister Malusi Gigaba’s eventual climbdown on some of the more damaging elements of the destructive visa regime he implemented on his first sojourn at that department.
It has taken Gigaba three years to implement just some changes to the visa regime which, as tourism and business lobby groups have pointed out from the start, are damaging to the economy.
The amendments, if anything, serve to muddy the waters even further when it comes to visa requirements.
The new measures – which are touted as enabling regular business travellers to get extended visas, reducing requirements on citizens from selected countries to get access to SA, and finally the dropping of the ludicrous demand that the parents of foreign children carry additional documentation in addition to their passports to get access to the country - will require the retraining of legions of civil servants who are barely attuned to the last set of maddening rules.
It’s impossible to quantify exactly how much damage has been done to tourism over the past three years as government messaging around visa requirements varied between the murky to the destructive.
Some 13,000 families are reported to have been turned away from boarding flights to South Africa because they didn’t have the appropriate documentation demanded by South Africa’s Home Affairs department. It’s unclear how many more would simply have made alternative travel choices rather than be lumbered with the inconvenience of restrictive rules.
The effort taken to visit South Africa has seen the country significantly underperform in a booming global industry, which is currently growing north of 5% a year. Grant Thornton puts growth in tourism numbers to South Africa at half that.
It’s a massive wasted opportunity.
President Cyril Ramaphosa flagged tourism as one of the critical elements of his stimulus plan for the country. There is a direct correlation between an increase in visitor numbers and jobs created in the industry. The tourism industry calculates that one new job is created for every nine additional tourists to the country.
South Africa’s tourism numbers are blurred by the inability of Home Affairs to distinguish between migrant workers who repatriate a large portion of their earnings, and those whose spend goes directly on tourism and domestic consumption. Greater clarity is needed in defining the difference between genuine tourism, business travel and those who travel across borders for work.
The Tourism Business Council of South Africa, while unimpressed with the visa changes, is appealing for their speedy and efficient implementation to ease the burden on travellers this season. The reality is that foreign tourists going to long-haul destinations like South Africa plan significantly in advance and the changes are unlikely to have any real impact on the current tourist season. There is an immediate effect of bad regulation and a lag in repairing the damage it has caused.
Home Affairs' belligerence on domestic travellers requiring permission to travel out of the country by non-travelling parents and to carry unabridged birth certificates in addition to passports, remains a ridiculous bureaucratic burden for South Africans looking to travel abroad. The decision to force parents to grant permission for every trip was based on fake data of child trafficking from South Africa and remains a serious impediment to travelling families.
There is progress in other areas.
Visitors from China and India will no longer have to travel in person across the vast expanses of their respective countries to apply for visas in person, but will be allowed to use intermediaries. The long overdue introduction of biometric movement control systems at the country’s busiest airports should go some way to reduce congestion on arrival at South African ports of entry. Speed and implementation are of the essence.
Ramaphosa’s planned stimulus package announced on Friday showed that government was coming to terms with the fact that “business as usual” was no longer working. He promised greater clarity not only on tourism, but mining and land reform too.
Ratings agency Fitch, which already has a sub-investment grade rating on South African debt, has expressed reservations about the significance of the measures unveiled by the president last week amidst concerns that Moody’s, the only major ratings agency which retains an investment grade rating on SA, is considering the soundness of its position.
In his address to the UN in New York this week, the president used the opportunity to quell concerns about policy and the impact of land reform on property rights. The movement on visas, while positive, is hardly the radical overhaul needed to announce South Africa is open for business.
The president has tasked a group of veteran business leaders including former Standard Bank CEO Jacko Maree and the former finance minister and now Old Mutual chairperson, Trevor Manuel, with raising $100bn in foreign direct investment over five years.
Ramaphosa will be hoping that by talking up opportunities for reforms, he will encourage South African CEOs to loosen the purse strings on the so-called “lazy capital” locked into domestic balance sheets. Perhaps we should use the term “petrified capital” which like fossilised wood has turned to stone is immovable and stuck in time.
Our messaging around SA being open for business needs to change quickly if we are to grasp the nettle on an economic rebound.
Bruce Whitfield is a multi-platform award winning financial journalist and broadcaster.