Warwick Wealth Matters – February 2023February 16, 2023
Spirit Wildlife FamilyFebruary 16, 2023
An article written by Ian Kilbride
Paradoxically, much good has emerged from South African Tourism’s controversial R1billion shirt-sleeve sponsorship of English Premier League club Tottenham Hotspurs. A significant positive to emerge from the debacle is that since its detail was leaked to investigative journalists, the issue has galvanised an informal coalition of public opinion, civil society, trade unions, parliament and reportedly, even the State President.
Despite the controversy, a strong, persuasive and defensible case can be made for South Africa significantly boosting, rather than curtailing, its international marketing and tourism budget, including that of international sports sponsorship. Indeed, at the global level, South Africa enjoys significant comparative advantages that should be optimised to enjoy the full local economic multiplier effect of international tourism.
To place this in perspective, 2022 recorded some 917 million tourist arrivals globally, generating revenues in excess of $636 billion and still growing rapidly in the post-Covid recovery period. Currently, South Africa attracts just 10 million tourists annually, generating in excess of $13 billion, or R234 billion. Notably, South Africa only ranks third in the African tourism table, behind Egypt and Morocco and ahead of Tunisia.
SA tourism statistics require a note of caution, however, as the bulk of visitors transit from neighbouring African countries, namely, Zimbabwe, Mozambique, Lesotho, Eswatini, Botswana and Namibia. The majority of these ‘tourists’ are, in fact, engaged in circular economic activity such as temporary employment, cross-border trade and day shopping.
A valid critique of the proposed Spurs deal is that the South African taxpayer is effectively subsidising the world’s ninth richest soccer club, enjoying annual revenues of £442,8 million, the equivalent of R9,5 billion. Spurs’ highest paid player, Harry Kane, earns a weekly salary of £200,000, or £10,5 million per annum, or R225,750,000. This approximates the entire annual salary budget for SA Tourism. Notably too, the three-year £42,5 million sponsorship would be more expensive than Rwanda’s shirt sleeve sponsorship deal with the more successful English Premiership Club, Arsenal.
Yet, while acknowledging the public’s role in halting the Spurs deal, it is also a timely reminder that public interest in, engagement with and oversight of, foreign policy matters in South Africa is desultory. This is material in a number of respects. At the level of governance for example, SA Tourism is currently headed by an Acting CEO, supported by a (now suspended) Acting Chief Financial Officer, together with an Acting Chief Strategy Officer, alongside an Acting Chief Convention Bureau Officer.
As a government agency responsible for marketing the country locally and internationally, an examination of SA Tourism’s 2020/21 annual report also reveals a qualified audit opinion due to inadequate controls on marketing expenditure. Moreover, SA Tourism incurred irregular expenditure in excess of R20 million for the same financial year. Equally alarmingly in light of the Tottenham Hotspurs ‘deal’ the Auditor General found that it was “unable to obtain sufficient audit evidence to define the method of calculation to be used when measuring the actual achievement for the target traveller, trade, arts, culture partnerships activated for the year”. In other words, SA Tourism lacked sufficient modalities for measuring return on the investment of public monies. When the proposed advertising spend on the shirt sleeve of a soccer team amounts to some R1billion, robust metrics must be in place to measure the return on investment.
These governance issues also place into sharp relief the defensive dismissiveness of SA Tourism’s Acting CEO towards the media at the recent press conference during which, rather than explaining the rationale for the sponsorship, a tirade was launched at the very people best placed to explain the merits of the deal publicly and internationally – the media. From SA Tourism’s perspective, those responsible for altering the media to the deal were to be dealt with by launching a forensic investigation. Moreover, the three board members who resigned their positions immediately after the scandal broke were dismissed by the Acting CEO as already being under investigation for unspecified breaches. In a further blow to transparency and governance, while the Acting CEO denied the involvement of any third party in the Spurs deal, the Acting Chief Financial Officer subsequently acknowledged his links to a private entity advising on the contract. Wherever the truth lies, the governance of SA Tourism has been called into question and public confidence and trust lost.
One of the debates percolating through the public narrative is the zero-sum calculation between the benefit of spending R1billion of taxpayers’ money on, for example, diesel fuel for Eskom, against the same amount earmarked for advertising on the sleeve of a premiership soccer club. This is a false dichotomy. While SA Tourism’s venture was arguably ill-conceived and its timing insensitive, (more so now that a national state of disaster has been declared), marketing and advertising budgets are vital to tourism, which in turn, is vital to our country’s economy. To curtail the Department of Tourism’s marketing and advertising spend would result in an even more damaging own goal than that conceded to Tottenham. South Africa needs more, not less, money spent on attracting international tourists in the competitive post-Covid world, but the governance and accountability of where and how this money is spent requires urgent review.
The most unexpected positive outcome of the Spurs fiasco was Parliament’s insertion into the debate and its insistence that the sponsorship should not proceed. The principled actions taken by Parliament’s Portfolio Committee on Tourism in calling the Acting CEO and Minister of Tourism to account are exceptional. Not only did the Portfolio Committee respond with seriousness and urgency to the public’s concerns, its deliberations delivered a salutary lesson in humility, accountability and the constitutional separation of powers to a Minister and Acting CEO suffering from an overdose of hubris.
If we take the time to reflect as a nation on the Spurs fiasco, lessons can be learnt that will not only avoid a repeat of this public diplomacy farce but can lead to a more focussed and impactful international tourism campaign. But perhaps the hardest lesson to be learnt from the ‘Spursgate’ is that while advertising is the lifeblood of tourism, we are far from being able to configure and market a South African brand that is supported widely domestically and is credible internationally. To do this requires far greater domestic attention being paid to tackling our local socio-economic pathologies in order to craft a premiership nation brand of which we call all be proud.
Ian Kilbride is the Chairman and CEO of The Spirit Group and an Honorary Professor at Stellenbosch Business School