Tanzania: Weak Shilling Lifts Country's Tourism

Dar es Salaam — A weak Tanzania shilling has buoyed the tourism industry in the country although Tanzanians have been negatively affected by it. According to the Minister for Natural Resources and tourism Mr Ezekiel Maige, the depreciation of the Tanzania shilling against the US Dollar, which exchanges at a buying rate of Tsh 1620 per US dollar on average at bureaux de change, has benefited the tourism sector.
"Most tourism transactions are done using the US dollar, therefore it is cheap for tourists to tour Tanzania compared to the period when the shilling was strong," said Minister Maige.
He explained that for the past 12 months the currency has been weakening against the US Dollar. "Last week for example, the selling price of the shilling went down to Tshs1,659/75, a dollar, the lowest level ever in 45 years," said Maige.

He said following the fuel shortage and power rationing the Government predicts the shilling will depreciate to Tshs 1,800 per US dollar, its lowest level in the next three months.
However, the Bank of Tanzania (BoT) is confident that the shilling will gain strength against the dollar in the fourth quarter of this year due to an increase in exports of traditional crops such as tea, cotton, coffee, tobacco, cashew nuts and sisal, among others; tourism and mining.
"There will be increased exports of these traditional crops," said Dr. Joe Massawe, the Central Bank Director of Policy and Research.
Maige noted that the inflows of US dollars from the mining companies and tourism would also appreciate as the peak season approaches. Although exports were smaller than imports, Massawe said the increased exports will definitely lead to the shilling gaining stability against the US dollar. The Minister for Natural Resources and Tourism noted that the fourth quarter of every year is the peak season for foreign tourists who flock to Tanzania.
Maige said the Government aims at attracting between 900,000 to one million tourists in 2011. The sector's earnings increased by 11% in 2010 to $1.28 billion, helped by the global economic recovery. Last year, the country attracted some 794,000 holiday makers and business travelers.
The Minister told The East African Business Week in Dar es Salaam that the Zanzibar maritime accident which happened on September 10 2011 killing over 200 people, has affected the image of the Tanzania tourism sector to the world market hence "we fear that the sector may not attain the set target of one million tourists for the year 2010-2011."
"The Tanzania Union Government fears that the tourism sector may not perform as projected following the Zanzibar marine tragedy because the message sent to tourists worldwide is that Tanzania is not safe in terms of transportation in the tourism sector.

Zanzibar Island is one of the key tourist destinations along the Indian Ocean coast attracting thousands of tourists every year with most of the visitors interests in historical remains and the white beaches.
Tanzania spends an estimated $3 million to promote different tourism attractions in the country, which is far below South Africa's $70 million budget.
Analysts told East African Business Week in Dar es Salaam that Tanzania could make a huge turn around if it could invest more in tourism advertisement, locally and globally.
According to the World Travel and Tourism Council the total contribution of tourism sector to the country's Gross Domestic Product is expected to increase to 13.4 % by 2021 from the current 12.9 %.