SA Tourism to lose R500 million over board scandal

Leading tourism associations in South Africa have decided to withhold R500 million in payments to SA Tourism. 

Speaking at the launch of the South African Tourism Services Association (SATSA) conference, CEO of SATSA, David Frost, said that the private sector is not obliged to give SA Tourism this funding, according to Tourism Update.

“We have established mechanisms over the past several years to try and engage SA Tourism in an understanding of what happens to that money and to have a greater say,” said Frost.

“It’s been a fairly arduous process. At the same time, they’ve had qualified audits.”

Frost believes the money will be better managed by the private sector. SATSA Chairperson Oupa Pilane added that, given the entity’s latest inefficiencies, there is “no reason for the money to be handed over.”

These funds are usually collected through the voluntary TOMSA levy and handed over to SA Tourism through SATSA and the Tourism Business Council of South Africa (TBCSA).

The money is used to fund global marketing campaigns to promote South Africa as a tourism destination.

The news follows recent controversial developments at SA Tourism, in which CEO Nombulelo Guliwe was suspended by the board due to allegations of misconduct. 

Tourism Minister Patricia De Lille has since dissolved the SA Tourism Board, claiming that the meeting in which the CEO was suspended was unlawful and irregular. 

“Every law in this country matters. Every cent matters. Part of protecting the public purse is to ensure that due process and governance is non-negotiable,” De Lille said to the Parliamentary Committee on Tourism.

“As I have demonstrated, there has been continuous governance failures by the dissolved board,” she added.

De Lille said that the suspension was unlawful, as the board lacked a chairperson, and dissolved it after “multiple warnings.” The minister said after legal advice, she had to dissolve it.

The Minister insisted her intervention was a duty. “I’m not interfering. It is my responsibility to act when things are not going right,” she said in an interview with 702.

The matter will be taken to the Gauteng High Court by the dissolved board members. De Lille has filed a notice of intention to oppose the application. 

The DA blames De Lille’s handling of the situation for the loss to SA Tourism’s funding. 

According to the party, De Lille’s “dismal handling’ of SA Tourism’s affairs and her association with several scandals have caused her to lose the trust of the private sector. 

The announcement to withhold the funding is a result of the entity’s poor performance and repeated qualified audits. 

The dissolved board said in Parliament that the Minister ignored governance and financial management policy by dissolving the board.

The Auditor General’s latest report on SA Tourism showed that the entity regressed from an unqualified audit with findings to a qualified audit with findings in the 2023/2024 financial year. 

The Auditor General recommended increasing oversight over the entity to improve its accountability, transparency, and integrity. 

SA Tourism recorded irregular spending of R24.2 million in the financial year. Material irregularities amounted to R4.2 million.

‘SA Tourism is falling apart’

De Lille’s response to these ongoing issues, according to the DA, was to fire the board attempting to fix them and say nothing of the CEO who caused them.

“The private sector now believes it can make far better use of the TOMSA money itself,” said DA Spokesperson on Tourism, Haseena Ismail. 

“This contradicts De Lille’s claims to Parliament that there is ‘absolutely no crisis at SA Tourism’ and that the Tourism industry ‘supports her’” 

Ismail added that it is clear neither of these statements are true, and that SA Tourism is falling apart because the Minister stopped the board from steadying the ship.

Ismail is referring to Minister De Lille’s appearance in Parliament, defending her decision on 2 September.

She said that the tourism industry “continued to show support for the Tourism Growth Partnership Plan.”

She added that TBCSA was directly involved in the establishment of the interim board. “They nominated six individuals to keep to momentum in the tourism sector,” De Lille said. 

However, TBCSA and SATSA both released statements following the dissolution expressing that they did not support the move. 

“The Board had the right mix of expertise and leadership to help address instability within SAT,” said TBCSA CEO Tshifhiwa Tshivhengwa.

“The Minister’s decision to dissolve it is therefore not aligned with the position we shared and raises serious concern within the sector.”

“Such actions are not merely procedural lapses; they represent a direct threat to good governance and to the economic prospects of the tourism sector,” SATSA added.