Tourism in Africa: a global destination for investment and entrepreneurship

by MMC
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Tourism is one of the main drivers of economic growth and job creation in emerging economies around the world. Africa’s unique history and natural wonders are attracting increasing attention amid local and global increases in cultural, heritage and development tourism. Based on analyzes of the governance and business environment of various countriesIt is clear that many African countries show considerable promise in becoming or remaining dynamic hosts for tourists, investors and entrepreneurs, which can promote the employment of low-skilled workers and the economic inclusion of women and youth.

International tourists traveling to emerging countries often inject amounts of wealth into national economies similar to private and public sector investments and development aid from foreign governments. In 2015, foreign direct investment to the African continent totaled 54 billion dollars and Official Development Support totaled $51.04 billion, while tourism generated $39.2 billion and created 9.1 million direct jobs in the sector. Clearly, the tourism industry is playing an increasingly important role in the global economy by contributing to GDP, service exports and employment.

To what extent are African countries exploiting this opportunity offered by tourism? A recent World Bank study classified African countries in four performance categories: “pre-emerging”, “potential”, “emerging” and “consolidating” tourist destinations. Country performance was based on indicators such as ease of doing business; competitiveness in terms of regulation, infrastructure and tourism resources; tourism revenue per long-haul arrival; international arrivals per capita; and forecasts for growth in tourist arrivals. THE pre-emerging countriesCountries such as Somalia and Sudan have faced significant security and governance challenges, as well as low government engagement in the tourism sector. Potential countries, such as Madagascar, Ethiopia and Gabon, have shown relative interest and initiative in the sector, but still face governance challenges and market limitations. Emerging countries, such as Rwanda and Seychelles, prioritize and develop tourism and are relatively competitive. Finally, countries in consolidation, such as Morocco, South Africa and Mauritius, are among the best performing with a relatively mature tourism sector.

Fifteen years ago, the African Union and the New Partnership for Africa’s Development (renamed the African Union Development Agency) adopted the Tourism action plan bring visibility to tourism on the continent. This happened after a 300 percent increase in international arrivals in the 1990s, reaching 26.2 million arrivals in 2000. Tourism has since become an integral part of economic development policies. Several countries have recently stepped up efforts to develop their travel and tourism industries, including Gambia, Kenya, South Africa and Tanzania, to meet the needs of the largest. 62 million annual visitors towards the continent. South Africa and Kenya receive the largest quantities of tourism-focused investment at $6.1 billion and $404 million respectively.

In general, investments have focused on countries with well-developed infrastructure, easy-to-navigate travel policies, and business-friendly environments. There is great potential for increased tourism-related investments on the continent, particularly after the 15 member states of the Economic Community of West African States, often referred to as ECOWAS, introduced a visa policy allowing free movement between its member states. Continent-wide efforts to increase integration and free movement, such as the imminent implementation of the African Continental Free Trade Area, will create a more stable business environment for investors and entrepreneurs to capitalize on the continent’s tourism potential. Potential investors in other countries’ tourism sectors will face challenges in infrastructure development and government support. However, those who make informed choices and take the risks necessary to partner with policymakers and industry leaders in potentially high-reward countries will be richly rewarded.

Although the motivations for traveling may change periodically, the tourism industry has always been a major economic contributor in terms of jobs and opportunities. Tourism represents 10 percent of global jobs and GDP, and generally provides high levels of employment for women and young people. As Africa’s emerging economies begin to shift away from their reliance on raw materials and agriculture and expand their service industries, the tourism industry has become a major focus of national development strategies.

Morocco, for example, has enthusiastically used the tourism industry as a development tool, hoping to increase the annual number of visitors received and strengthen the country’s economic growth. Since the Moroccan government began giving strategic priority to tourism, the country has become the “new star of emerging markets among foreign real estate developers. » Morocco, South Africa, Egypt and Kenya, among the most popular African destinations in terms of number of arrivals and value of tourism revenue, are examples of tourism success stories, with these countries earning billions of dollars each year. Namibia, Cape Verde, Botswana and Tunisia all rank close to Kenya in World Economic Forum Travel and Tourism Competitiveness Index Ranking (2017)representing the extent of growth potential across the continent.

The tourism industry offers many opportunities to invest in Africa’s wealthy local communities, generate economic activity and create employment opportunities for women and youth. By 2030, consumer spending on hospitality and leisure in Africa is expected to reach approximately $261.77 billion. To capitalize on the potential of tourism, political leaders and business leaders should work hand in hand to prioritize investments to accommodate entrepreneurial innovations to attract more travelers to their countries. Policymakers should improve governance through a more coordinated effort among agencies to simplify regulations and remove barriers to tourism development, attracting investors, and promoting tourism destinations.

Policymakers should also unlock competitiveness and ease of doing business in the sector through infrastructure development, particularly for road, air and river transport, as well as simplification of visa requirements and administrative processes. The private sector should develop and promote memorable tourism products with sustainable competitive advantages and quality that meets or exceeds global standards. Investors and entrepreneurs should ultimately be agents of economic development, sourcing local goods and services and promoting the inclusion of women and youth as well as environmental sustainability, while ensuring their profitability in a growing sector. rapid growth.

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