Tourism Could 'Earn Africa Sh100 Billion'

allafrica

The Citizen (Dar es Salaam)
Tanzania: Tourism Could ‘Earn Africa Sh100 Billion’
Costantine Sebastian, Arusha
5 June 2008

Sub-Saharan Africa (SSA) is said to have potential to generate up to $100 billion annually from the booming and lucrative global tourism market that currently accounts for nearly 10 per cent of the world’s gross domestic product (GDP).

The revenue that can be generated in about a decade translates into almost Sh120 trillion at yesterday’s mean official exchange rate. The fortune is enough to fund Tanzania’s recurrent and development costs for about 20 financial years based on last year’s about Sh6 trillion government budget.
According to estimates by African Sun Hotels of Zimbabwe, SSA might account for about 10 per cent of the global tourism receipts the World Tourism Organisation (WTO) forecast to hit $1 trillion by 2020. Its chief executive officer Shingi Munyeza however cautions that the prevailing sectoral landscape has to be overhauled to create the requisite opportunities to generate that income.

“If things remain as they are now, it will take Africa between 50 to 100 years to catch up with developed markets and realize its full tourism potential,” he told a forum on tourism investments in Africa at the ongoing Sullivan Summit.

He said Africa needs to fix its travel systems and infrastructure, conserve and nurture its attractions, and extensively increase the current accommodation level to fully exploit the forecast global hospitality business. The official said that these are the critical factors for the growth and future prosperity of tourism in SSA that will create 10 million jobs in the region this year.

Last year, 233 million people were employed in the sector globally.

Opening the forum, Zanzibar’s Tourism, Trade and Investment minister Samia Sululu said the sector in the region grew by 9.4 per cent last year that was higher than any other region in the world. She however noted that the phenomenal growth has not been replicated in visitor arrivals, which were 44 million and the least in the world that hosted 900 million tourists.

She said the challenges to change the status quo are enormous, required joint efforts and end of the ‘pole pole syndrome in Africa. The minister noted that investments are what Africa needs to catapult it to new heights but the continent should first put its tourism house in order to lure the required capital.

The chief investment officer of Southern Africa Enterprise Development Fund, Mr Richard Swai, said Africa needs more capital that it is currently getting to be able to cope with the projected demand. He said his organization is ready to cooperate with both local and foreign investors to help finance all tourism related projects in Africa.

“Tourism is the key sector of Zanzibar economy being the largest foreign exchange earner and contributing 35 per cent of GDP by last year,” Ms Sululu told The Citizen in an interview.
A few years back the GDP rate was 22 per cent and the sector represented 77 per cent of the foreign direct investments in the isles’ economy. In 2006, the Spice Islands hosted over 137,111 tourists that reached 143, 232 last year and are set to rise to about 156,000 visitors this year.

Currently Tanzania earns less than $1 billion (about Sh1.2 trillion) from tourism but it is among the national economy’s key sectors and the leading foreign exchange earner. Together with attracting huge investment flows, tourism superb performance indicators are yet to have down trickle effect to directly benefit majority people in the country.

Mr Munyeza said currently the sector contributes 7.9 per cent to Africa’s GDP that WTO expects to fall to 7.4 per cent due various factors, including investment constraints. Other shortcomings will be competitiveness demerits, and rigid macro-economic policies that respond poorly to global changes.According to the World Travel and Tourism Council (WTTC), demand for tourism in SSA will grow by 5.4 per cent this year and 4.1 per annum between 2009 and 2018. The Zimbabwean official said that Tanzania that has recently benefited from strong promotion in the US and other new markets will together with other leading destinations like South Africa, Kenya and Seychelles reap a lot from the demand.

“Construction of hotels is a measure of development in a country and SSA will require four to five times accommodation over the next 10 years to meet this demand for accommodation and facilities such as restaurants,” he said.”In are Arusha where we have an interest through Mount Meru Hotel, five world class hotels with 200 beds will be required in the next five years to accommodate the expected visitor influx,” he told the forum.

Arrivals in the continent are forecast to reach 47 million in 2010 and 77 million in 2020.