Thursday, August 29, 2013

TOURISM CAN HAVE MULTIPLIER EFFECT TO NATIONAL ECONOMY

TANZANIA is among few African countries blessed with an abundance of tourist delights which makes the sector the prime engine of growth as the country races to make for lost time.



Its coast, with ribbons of beautiful white beaches, is parked with cultural and historic sites. The clove-rich islands of Zanzibar and Pemba have lost none of their magic and romance.
Accounting 14 per cent of the Gross Domestic Product (GDP), second only to agriculture which generates 34 per cent, tourism has a positive impact to the national economy due to the subsequent rise in demand and other services.
Currently, public and private stakeholders in the sector have been putting up more efforts to increase tourists visiting the country from 800,000 to more than 1,000,000.
The stakeholders are convinced that tourism benefits other sectors for having a wide-ranging positive multiplier effects to the national economy. Lidwien Appels, chief executive officer of the Hotels Association of Tanzania (HAT), says tourism creates jobs in the tertiary sector, but also encourages growth in the primary and secondary sectors.
The concept of multiplier effect, she explains, is how many times money spent by a tourist circulates through a country’s economy. “In our industry, goods and services that are consumed at the point of production, especially in villages, results in greater benefits and impact into the rural economy,” Appels says.
More tourists mean the construction of hotels, more assured income for farmers supplying food to hotels and more jobs opportunities for the unemployed.
Generally, in tourist delights such as Mount Kilimanjaro, Mikumi National Park, Ngorongoro Crater, Selous Game Reserve, historic town of Bagamoyo, Ruaha National Park and many other places, there is subsequent rise in different economic activities as well as improvement of the transport infrastructure.
The money international tourists spend in Tanzania comes from overseas and this can be considered as an `export’.
Industry experts believe that what Tanzania earns from tourism is just only a drop in the ocean and that the sector can be expanded almost considerably. As a treasure trove of natural wonders, the country stands a greater chance of moving forward with tourism-based economic growth and development because of 28 per cent of its surface area of 945,203 square kilometres is dedicated to wildlife conservation.
A study by Josaphat Kweka, Oliver Morrissey and Adam Blake entitled “The Economic Potential of Tourism in Tanzania,” noted that there is a significant stimuli which tourism offers many sectors in the economy – agriculture, manufacturing and the service sectors.
It noted that expenditure per tourist has increased from US$425 in 1990 to more than US$1,000 in 1998, higher than the African averages of US$330 to about US$400, according to figures from the World Tourism Organisation.
A number of cultural tourism enterprises have been set up in various regions of the country, but more often in the rural areas. Apart from the added revenue for the rural dwellers, where holidaymakers pay a development levy, jobs have been created for the local guides, local food is also sold and school supported by the initiative.
Most visitors, because they want to experience a local setting, enthusiastically eat local food and buy artifacts from the villagers. Tourism experts who have conducted various researches in Tanzania agree that the sector has an important role, not only as a foreign exchange earner, but also in generating demand for the output of other sectors.
These sector linkages and the aggregate demand, add an important dimension to the analysis of the economic impact of tourism. There are few studies which have looked at the direct economic benefits of the expansion of tourism in relation to the indirect effects of the output of other sectors.
Given the sector’s potential gains, in terms of foreign exchange generation and tax revenue, stakeholders say there is scope for a government investment policy that enhances the linkage effects.
They agree that the industry can generate great revenues but this will not be handed on ‘a silver plate’ without improving the business environment by mainstreaming regulations. They say to propel the sector to greater heights, developing a strategy for growth and public-private sector marketing is of paramount importance.
There’s therefore the need to identify hurdles holding back the sector’s growth to enable it remain competitive. Last year, President Jakaya Kikwete directed the government to pay particular attention to agriculture, mining and tourism as the three sectors have the potential to provide the stimulus to the whole economy.

source: Daily news Tanzania

No comments:

Post a Comment