A risk-adjusted strategy for economic activity is reportedly being considered by the Presidency, which fails to recognise the tourism sector, or its contribution to exports and employment.
The reasoning behind the five-level plan, which will gradually reduce restrictions, appears to be based on Stats SA categories that exclude tourism.
A document seen by Tourism Update carrying the emblem of the Presidency, recognises only three sectors that are somewhat related to tourism: transport; hotels and restaurants; and recreation, culture, and sport.
When rating the importance of the sectors, the document says hotels and restaurants account for 1% of GDP and 0.8% of employment, with a medium contribution to exports. Recreation, culture and sport are put down as 0.5% of GDP and 0.5% of employment with a low contribution to exports.
The categories are important as they form the basis of how the economy will reopen.
There are three criteria in assessing a sector. The first is the economic value at risk, and this is assessed on the sector’s contribution to GDP, employment, export earnings, prevalence of SMEs and the informal sector, linkages to the rest of the economy and if it is an enabling economy.
Although inbound tourism scores on all these counts, it is not mentioned until the end of the document when it is added to hotels and restaurants as a sector, along with aviation, recreation and restaurant retail takeaways, as having the highest risk of transmitting COVID-19.
According to the plan, there will be an alert system with five levels. We are currently at 5, the highest level. Level 1 will only be announced when there is low virus spread and a high health system readiness. The shock for the industry is that only then will unrestricted interprovincial movement be allowed, but restrictions on international travel will remain.
The document may well form the basis of the President’s announcement tomorrow (April 23) of plans to ease economic restrictions.