Tourism is an important economic sector for Africa. According to the United Nations World Tourism Organisation, Africa received 71.2 million international arrivals in 2019 amounting to about US$ 40 billion in revenue.
This represents a 4 percent growth in arrivals over that of the previous year. Tourism has witnessed sustained growth on the continent as governments continued to pursue it as a viable economic option due to its contribution in terms of jobs, revenue, foreign exchange and infrastructure.
Africa is increasingly becoming a preferred destination for many international tourists looking to enjoy its sunny beaches, ecotourism products, national parks and safaris and exotic culture and food.
Unfortunately, the projected growth of between 3 to 5% in international arrivals for the continent cannot be realised: like every continent, Africa’s tourism industry is shattered, and the inflow of the tourist dollar has ceased due to the impact of COVID-19.
The novel coronavirus has been reported on all continents and in every country including those in Africa. While these measures helped on the health front, they are associated with substantial socio-economic costs and have taken a toll on Africa’s already fragile but growing economy. Internal lockdowns halted economic activities in most African countries, resulting in a massive reduction in government revenues and severely impacting individuals’ household incomes.
Similarly, the restrictions in movement as a result of the lockdowns further limited the ability of African citizens to undertake social activities including outings and other social gatherings, further restricting their ability to foster domestic tourism. Meanwhile, the closure of the international borders across the continent is also impacting cross-border movements, including international tourism.
The impacts of the pandemic on the tourism economy in Africa
The tourism industry has been heavily impacted by the pandemic as people’s economic lives are halted and their freedom of movement curtailed. Chiefly among these impacts on African economies is the reduction in foreign income. With the closure of the world economy and the associated redundancy as well as closure of international borders, international tourist inflows into Africa have ceased.
The United Nations World Tourism Organisation (UNWTO) indicates that international tourist arrivals to Africa decreased by 35% between January to April 2020 as a result of the pandemic. Countries such as Gambia, South Africa, Egypt, Kenya and a host of others that are heavily dependent on the expenditure of international tourists have witnessed dwindled injections of tourism-based foreign income. Equally, and associated with this, is the closure of tourism businesses. Tourism businesses are forced to close down either as a result of internal measures to help stop the spread of the coronavirus or directly as a result of the absence of tourists. Either way, the closure of tourism businesses such as hotels, attractions, travel and tour operations, food and beverage services and other support businesses have resulted in massive job losses across the tourism industry in Africa. Both direct jobs that are primarily targeted at serving tourists and those in the value chain have all been impacted.
Ultimately, the closure of tourism businesses coupled with massive job losses have resulted in the reduction of corporate and individual income tax revenue to African governments and thereby affected their abilities to provide the required public services and infrastructure. Such tourism-dependent African economies are therefore compelled to increase their borrowing, thereby spiralling their debt burden and potentially perpetuating their poverty cycle. For instance,
South Africa, a country with a significant tourism sector, for the first time in its history took a loan of US$ 4.3 billion from the IMF. Interestingly, this amount is less than its annual foreign income from the tourism industry. Similarly, countries like Ghana that has tourism as its fourth foreign income earner, contributing more than over US$ 1 billion a year, has contracted a US$ 1 billion loan facility from the IMF. This has become an all too familiar story across the continent with many African countries with significant tourism industries losing out on tourist dollars.
Restoring the tourist dollars
While tourist dollars have stopped flowing to the continent, for the time being, there is hope, with the UNWTO indicating that confidence in recovery in Africa remains very strong compared to other world regions. To achieve this, there is the need for the gradual easing of lockdown measures, including the opening of international borders, to allow the inflow of international tourists.
Also, African governments should institute safety protocols to guarantee the safety of both tourists and employees at the ports of entry into individual countries, and at tourism facilities and attractions. And African governments through their national tourism organisations can begin to bundle their tourism products to reduce the cost of travel. The bundling can be done to cut profit margins on individual tourism elements and therefore reduce the overall cost.
This will also have the advantage of compelling tourists to visit many attractions and stay longer and thereby spend more at destinations. Tourism facilities can also offer discounts or complimentary services to entice customers, especially domestic tourists at the initial stages of re-opening. Further, there should be aggressive marketing of African destinations in international circles to re-assure Western and, to some extent, Chinese tourists about visiting Africa once more. Lastly, African governments can offer tax exemptions and holidays to tourism businesses to help them recover from the consequences of the pandemic. Such tax holidays and exemptions will help them plough back their earnings into their businesses to recover and grow in the short term.