Tanzania: tourism share to economy to drop by Y-2020

Tanzania travel and tourism sector, is expected to score a major bounce back in one decade to come as its contribution to the Gross Domestic Product (GDP) is expected to shrink than now. The sector has over the last one decade or so embarked as a supremacy to the country's economy, by positioning itself as the second exports earner, behind agriculture sector.

The new report published by the World Travel and Tourism Council (WTTC) has indicated that the share of travel and tourism to the Tanzanian economy is expected to drop to 7.9 per cent by 2020 from currently 8 per cent recorded in 2010.

However, the sector's investment is estimated at Tsh864.8bn, $639.9mn or 13.4 percent of total investment in 2010. By 2020, this should reach Tsh2,192.5bn $1,384.2mn or 13.8 per cent of total investments.

The report shows that the shrink of its shares of the economy is due to the expansion of values of other sectors of the economy mainly mining, oil and gas, financial services sector, construction, trade as well as agriculture.

The tourism sector currently generates about 17.5 per cent of the country’s gross domestic product (GDP) and nearly 25 per cent of total export earnings, the second foreign exchange earner after agriculture.

The report which was published recently indicated that the sector's vigorous growth which is currently experienced will be slowed by the emergence of other sectors of the economy or the growth of the existing sectors of the economy.

However, on the monetary terms, the sector contribution to the economy is expected to improve from Tsh2,378.0billion or US$1,759.5million in 2010 to Tsh6,076.3billion or US$3,836.1million by 2020.

Tanzania earned $1,291.5 million (about Sh1.901trillion) from travel and related activities during the year ending November 2010, according to the Bank of Tanzania report.
The amount puts Tanzania on the right path to achieve its target of generating about $1.7 billion from tourism and related activities by the end of this year.

The share of the sector's contribution to employment generation is expected to remain flat over the coming one decade, putting pressures on the existing and prospective tourism training institutions that are currently generating hundred of thousands of professionals annually.

Currently, the sector contribution to the economy is estimated at 20 per cent of all exports, making it one of the lead contributors.

According to the Tanzania Tourists Board, the sector expected to record a total of one million tourists by 2010 but the global financial crisis, which ruined the economies of most sources of tourists hit the sector to fail to reach the target.

The contribution of the Travel & Tourism economy to employment is expected to remain level at 6.3 per cent of total employment, 624,000 jobs, or 1 in every 15.8 jobs in 2010, to 6.3 per cent of total employment, 776,000 jobs, or 1 in every 15.9 jobs by 2020.

The report show that the real GDP growth for Travel & Tourism economy is expected to be -0.1 per cent in 2010 and to average 5.9 per cent per annum over the coming 10 years.

Export earnings from international visitors and tourism goods are expected to generate 23.0 per cent of total exports (Tsh1,560.8bn or US$1,154.9mn) in 2010, growing (nominal terms) to Tsh4,102.6bn or US$2,590.1mn (23.2 per cent of total) in 2020.

Last month, the Tanzania Tourist Board (TTB) said it was embarked on an innovative strategy to help grow domestic tourism and attract more local tourists to the country’s numerous tourism destinations by encouraging and promoting live musical performances and education.

In order to achieve this objective, the TTB has expressed the need for both the public and the private sectors within the Tanzania tourism industry to work together in a joint effort to market the product and to strengthen tourism services overall.

According to Geoffrey Tengeneza, the Senior Public Information Officer for the TTB the new strategy has been designed to provide people with information about the Tanzania tourism sector with the idea that they will then be interested in visiting the country and its attractions.

The Tanzania Travel & Tourism economy is ranked at 106 in absolute size worldwide, 100 in relative contribution to national economies and 44 in long-term (10-year) growth. WTTC has a total of 181 member countries worldwide.