GARDEN ROUTE NEWS - Tourism in the Garden Route is facing a tightening noose because of new rules from National Treasury known as the MFMA (Municipal Finance Management Act) Circular 131.
The rules are designed to tighten how municipalities spend money on grants and outside organisations, but they are making it harder for local tourism offices to operate.
The Garden Route District Municipality says the rules have caused serious problems.
“Local tourism organisations [LTOs] such as Calitzdorp and Ladismith Tourism, which previously received grant funding from the Kannaland Municipality, have been unable to fully operate,” says Richard Dyantyi, district manager for Tourism and District Economic Development.
Calitzdorp Tourism even had to close its office from last year November to February, right in the middle of the busy season. Oudtshoorn, De Rust and Plettenberg Bay Tourism have also been affected.
Dyantyi explains that the issue derives from a new tender system. The LTOs now have to apply for contracts to run tourism services. While this system ensures money is spent properly and fairly, it can create gaps when the contracts end. New organisations might have to start from scratch, rebuild relationships, and set up databases again, which can slow down tourism promotion.
The district warns that this threatens continuity for important regional festivals, adventure tourism initiatives and overall tourist growth. “Should a new tourism office be appointed after the expiry of the contract, significant delays may occur in establishing relationships, trust, stakeholder networks, databases and co-ordination mechanisms,” says Dyantyi.
George Municipality not affected
By contrast, the George Municipality says its tourism division has not been affected by Circular 131. According to spokesperson Chantèl Edwards, George Tourism is fully integrated into the municipality and operates on its own approved budget, without relying on external grant funding.
The department follows all MFMA supply chain rules and has strong internal governance and contracting systems, allowing it to deliver tourism programmes efficiently. The staff have completed all required competency training, ensuring compliance while keeping George competitive as a tourism destination.
Through its member of the provincial parliament, Noko Masipa, the DA is tackling the issue at a provincial level. It called for solutions that protect LTOs and regional tourism offices (RTOs) without punishing fiscally responsible municipalities like those in the Western Cape.
The DA stressed that the current rules risk undermining local economies, especially in rural areas, and make it harder for the region to capitalise on growing tourist demand from markets such as India, China and Asean countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam).
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