In a bid to save the country’s tourism sector which has been the hardest hit by COVID-19, the government has announced that it will be settling its overdue bills to the tourism sector.
Government is reportedly owing hotels in the country millions of dollars in unpaid bills for service rendered for various activities, a development which has seen the hotels struggling.
Some of the bill includes accommodation for legislators when they come to Harare for Parliament business, pre-budget seminars, state related functions and even when the government hosts visiting foreign dignitaries among others.
At some point Parliament has had to plead with hotels to secure accommodation of legislators due to non payment of bills by government.
Speaking during a meeting with players in the sector, Tourism Minister Mangaliso Ndhlovu said government still recognises the sector as a key pillar of the economy despite the COVID-19 effects.
“…Government has also undertaken to settle all long overdue bills with the tourism sector players for services already rendered. This move is expected to unlock working resources for the Sector.
“I wish to commend tourism players for their unwavering commitment and efforts to ensure the speedy recovery of the tourism sector.
“On its part government wishes to restate the recognition of tourism as a key pillar of the economy and will continue to work with all stakeholders to improve the well-being of the Sector,” he said.
Besides the move to settle over-due bills to the sector, Minister Ndhlovu announced a raft of measures meant to cushion the tourism sector from the dire effects of COVID-19.
“In coming up with this decision government is cognizant of the fact that the tourism sector has lost substantial business through cancellations and postponement of travel since January 2020 to date.
“We are also aware that that access to lines of credit are often hampered by lack of collateral or often stringent lending conditions by the financial institutions.
“We believe the Bank Guarantee Facility (ZWL$500 million) will go a long way in helping the tourism industry to kick-start operations. Operational details of the facility will be finalized by treasury and will be announced within the next few days,” Minister Ndhlovu said.
Tourism Revolving Fund
The Government is keen to see increased investment in tourism facilities as we are fully conscious of the impending capacity constraints in the sector by way of rooms shortage, conference facilities limitations and related infrastructure. In view of the foregoing, the Government has approved the establishment of a Tourism Revolving Fund for the Sector and has injected seed capital of ZW$20 million into this Fund. While Government has injected the local currency to kick the Revolving Fund, we will continue to work with local and international partners to attract more capital into this fund. Operational details of this Fund will be announced in due course.
Waiver of Value Added Tax on Domestic Tourism
One of the key lessons that came out of the events unfolding around the effects of the COVID-19 pandemic was the need to develop domestic tourism.
In this respect, it is envisaged that due to the current measures that restrict travel aimed at containing the COVID-19 pandemic, international tourism will be slow to recover, hence the need to provide incentives to stimulate domestic tourism. Government has therefore approved a waiver of Value Added Tax payable by domestic tourist for accommodation and services.
This is envisaged to significantly lower the cost accessing tourism facilities by locals and I want to challenge you all in the sector to meet government halfway by thoroughly interrogating our cost structures so that our people can experience their beautiful country and your pristine facilities at affordable rates.
Deferment of Liquidation of Foreign Currency paid by International Clients
The Minister said Government was aware that a number of international clients had made advance payments for their travel into Zimbabwe which were however interrupted by the COVID-19 Pandemic.
“We appeal for such potential visitors to postpone their visits and come when the scourge is over. In this regard, Government has approved the deferment of the liquidation of foreign currency paid by international clients who could not travel due to the pandemic,” he said.
Support For Zimbabwe Tourism Authority
Further, Government is cognizant of the integral role played by the Zimbabwe Tourism Authority (ZTA) in driving the National Tourism Recovery and Growth. Currently, the ZTA is funded largely from the 2% Levy charged on tourists travelling into the country. Given the current downturn in tourist arrivals, revenue streams for ZTA have declined substantially. ZTA will be afforded substantial support to ensure that the organization is capacitated to fully discharge its mandate.
The tourism sector in Zimbabwe is expected to suffer to the magnitude of between US$500 million – US$1.1 billion in potential revenue in 2020 from the projected revenue of US$1.4 billion.
The tourism industry has been one of the hardest hit by the COVID-19 Pandemic coming as at a time when Zimbabwe was already experiencing a dip in tourism arrivals.
