One positive thing that came from South Africa being downgraded to junk status is that a weaker rand makes South Africa a better value-for-money option for overseas tourists.
This is the positive spin taken by SA Tourism CEO Sisa Ntshona who says tourism has the potential to pull South Africa out of its current downgrade. Speaking at the SANParks Investment Summit this week, Ntshona said that on a positive note, the devaluation of the rand made South Africa a better value-for-money option for tourists.
TourismUpdate.co.za quotes Ntshona as saying that with the crisis the country is in at the moment – being “downgrade to junk status” – tourism has the opportunity to show itself and “work our way out of it”.
On Monday, Standard & Poor’s downgraded South Africa’s credit rating to BB+, also known as ‘junk status’. The move followed President Jacob Zuma’s cabinet reshuffle on March 30, when former Finance Minister Pravin Gordhan was axed along with several other ministers and deputy ministers. On March 23, the rand inched to R12,50, while it was trading at R13,70 on Wednesday, April 5.
However, Ntshona said that unfortunately, the devaluation of the rand eroded SA Tourism’s marketing budget. The past few weeks have seen millions wiped off SA Tourism’s budget.
For the 2015/16 financial year, SA Tourism’s in-country spend, including marketing activities and overheads, sat at R422 million. The same budget would have given SA Tourism $33,76 million on March 23 and $32,26 million this week.