Opinion: Brexit Will Benefit South African Tourism, The New Gold

From MoneyWeb. Story by Unathi Sonwabile Henama, tourism lecturer at South Africa’s Tshwane University of Technology.

South Africa has strong political, economic, cultural and social ties with its former colonizer, the U.K.

The financial markets suffered in the aftermath of the historic referendum to leave the European Union. Brexit has implications for the South African economy, and South Africa must focus on what it can control.

South Africa has been experiencing a currency crisis with the rand losing value against major currencies. This has hurt economic growth. South Africa is likely to enter a recession as the economy won’t grow more than 1 percent this year.

South Africa imports more than it exports, and this has led to a huge trade deficit as a percentage of GDP. The economy depends on foreign direct investment to drive growth, in line with the country’s export-led economic policy. The economy is also suffering from job shedding in mining as commodities prices have plummeted, and labor costs have increased, increasing the cost of doing business. The rand’s weakness has increased the cost of living.

The rand’s value loss means that South Africa becomes much more attractive as a value-for-money destination. Tourism is an export product that is consumed at the destination, because it is a service that is simultaneously produced and consumed. This means that the majority of value addition can happen within the country, in contrast to exporting raw materials and importing the final product — so prevalent in the mining sector.

South Africa has adopted a flexible currency model, therefore when the rand loses value, it’s time to sell South Africa more.

Tourism is the only industry that has the ability and potential to create labor-intensive jobs that can change the gloomy reality of poverty. Tourism is the “new gold” — it produces more foreign exchange receipts than gold mining.

The U.K. is the No. 1 international inbound tourism market to South Africa according to Stats SA’s Tourism and Migration April 2016, with 18.4 percent of all tourists. The U.S. is No. 2. Europe as a whole produces 58.8 percent of tourists to South Africa.

South Africa is the third cheapest destination for U.K. tourists after Portugal and Bulgaria. Tourists can counter the decline in the South African economy.

Read more at MoneyWeb.
Earn valuable CPD credits

Redeem your 50% discount

How to use product life cycle analysis to your advantage. (David Baggs)

Source: afkinsider

Follow Alive2Green on Social Media
TwitterFacebookLinkedInGoogle +

Recently Published

Utility Week

Expand your knowledge in over 40 conference sessions at African Utility Week and save money!

The largest group of power, energy and water professionals will ...


The 20th Anniversary Challenge of The Workplace Challenge

Vania Reyneke, Project Manager, The Green Economy Journal attended ...


Sustainability in building design has won Renée Minnaar of the University of Pretoria a place at 31st Corobrik Architectural Student of the Year Awards

Sustainable building demands architectural design that aims to ...


Countdown continues to world’s first ever Global Recycling Day as worldwide events are announced

With just one month to go until the first-ever Global Recycling Day, ...

Rose Foundation

ROSE Foundation – protecting our dwindling water resources

There are many reasons that attribute to the growing water crisis in ...


Growthpoint becomes the first company to issue a Green Bond on the JSE

Growthpoint Properties is the first South African company to issue a ...


Durban woman director to Put Foot for charity

Courageous business woman and director, Karen Petersen, is swapping ...


Innovation and an appreciation of South Africa’s cultural diversity stand out in The University of the Free State, Corobrik Architectural Student of the Year Awards

Innovation is the standout quality that differentiates design ...


#movethedate of Earth Overshoot Day

Humanity demands more than Earth can regenerate Calculate your ...