Environmental, Rural and Social Development 187 bC\OSAL R44, July 2001 / . os Findings reports on ongoing operational, economic, and sector wor* camned out by the World Bank and its membergovemments in theAfnca Region. It is publishedpenodically bythe Knowledge and WORLD BA vN K Leaming Centeron behalf of the Region. The views expressed in Findings are those of the author/s and should not be attributed to the World Bank Group. 0 ~ ~~~~~~~~ 0v Tourism in Afnca [N A99 fD overnments in Africa are Sub-Saharan Africa (growing at G showing increasing interest over 5 percent annually in real Xo in tourism as a source of terms) in 2000. Although starting growth and diversification. Recent from a lower base of visitor arriv- work indicates that tourism in Af- als, the African continent is enjoy- rica can, in the right circum- ing higher growth rates (7.2 per- stances, contribute effectively to cent) than most other regions. Of economic development because: the Sub-Saharan countries, only * barriers to entry into the inter- South Africa is listed in the top national market are lower than forty tourism destinations world- for most external trade sectors; wide (26th in 1997). Some thirty * tourism expenditures can pro- countries in Sub-Saharan Africa vide a significant stimulus to have incipient or flourishing tour- other production and service ism industries, defined by mini- sectors; mum contribution of 2 percent to * properly managed, tourism has GDP and of 5 percent to exports. A the potential to alleviate poverty, recent study by the Department for --*..- preserve cultural heritage and International Development (UK) protect natural resources; and notes that, using the same crite- * international tourism is a rela- ria, most of the lowest and lower tively high-growth industry. income countries in the world have significant tourism sectors. Tourism's global reach The competitive challenge for Tourism's global reach Africa Visitor arrivals worldwide reached African countries ( for the rest of 698 million in 2000 (+7.4 percent this article, Africa refers to Sub- over 1999) and expenditures were Saharan African countries ) are US$476 billion (+4.5 percent) ac- competing for a bigger share of _u 'cording to the World Tourism Or- world tourism in a consolidating gaiaisoun. TheWorld Tr)avl land tourism industry, which wields Tourism Council (WTT'C) calculates considerable marketing power. The that tourism generates 8 percent global industry is highly competi- of total exports and of all jobs worldwide. WTTC also estimates tive, with very small margins (1-2 wwthattourlide. Wand travelsonstrim percent of sales) on packaged holi- that tourism and travel contrib- dy.I diin oroeaos uted about 10 percent of GDP in days In addition, tour operatorsa responsible for tourists' health and welfare under EU legislation, are the market. Much of African tour- other sectors, such as mining risk-averse and seek "safe" desti- ism is based on nature and wildlife, manufacturing. Yet, because lee nations. However, African tourism as in Kenya, South Africa, Tanzania, age is related to a country's dev largely comprises customized Zambia and Zimbabwe, which re- opment level, economic divers tours catering to higher-income quires high environmental manage- cation and the openness of tourists, where margins are ment standards. In 1995, West Af- trade arrangements, leaka higher -as they are for business rica introduced the Slave Route to across sectors should be similaw travel. boost cultural tourism from the the same region or country. Diff As tourists at all price levels be- North American market. ent factors cause leakage and vw come more sophisticated in the between countries. In diversif global market, value, in addition to The sustainability of tourism economies, where tourism fac price, becomes a critical element ties are constructed, equipped a in the decision to visit one desti- Government's role is to create the supplied largely from local . nation rather than another. Essen- policy framework that will encour- sources, leakage will be lower a tially, the tourist package must age for-profit investments, but also net foreign exchange earnings c display the distinctive character- formulate the incentives and regu- be in excess of 85 percent of grc istics of the destination that con- latory frameworks that will ensure revenues. In small countries a trast with all others the tourist economic, environmental and cul- islands, imports can reduce i might have chosen, as well as be- tural sustainability, poverty alle- foreign exchange earnings to ing competitive in price. Conse- viation and social inclusion. percent. Preliminary data I quently, cultural and natural as- Kenya suggest that leakage is sets, and a receptive local popula- Economic issues the order of only 23-25 percent tion, can be the principal elements Linkages. Visitor expenditures out- Leakages may actually ident in creating value in a competitive side the hotel can range from half the potential for new linkages tourism product. to nearly double in-hotel expendi- the formal and informal secto tures. These expenditures can Mozambique is focusing on dev Tourism successes have a catalytic effect on produc- oping tourism and handicrafts tion and employment across the parallel. Many safari lodges, w- The tourism industry throughout economy. Initially, tourism creates considerable community inpt Africa often operates below inter- jobs in the construction sector, and locally produced vegetab- national competitive standards, after which accommodation invest- and meat, are able to comma but several products already meet ments generate demand locally for high prices, such as lodges in t international standards of excel- furniture and furnishings, and Luangwa Valley in Zambia. Ho lence. For example, thirteen hotels even for capital equipment. Tour- ever, "plugging the leaks" may r in four Sub-Saharan countries ism also requires transport, tele- always be indicated -while hi4 obtained the prestigious label of communications and financial ser- volume resort tourism may not: "Leading Hotel of the World". At vices and creates linkages to agri- quire imported goods, luxury toi least one of these hotels is wholly culture, fisheries, food processing ism, which does, may have le locally owned and substantially and light manufacturing. Tourism impacts on the natural resour locally staffed and others have lo- should incorporate the informal base, a higher employee per ro( cal or regional capital and manage- sector but such links to do not ratio, and bring in greater levels ment. Mauritius has been success- happen spontaneously and gener- net foreign exchange per visitoI ful in expanding its resort-based ally require targeted interventions. Foreign ownership and manaf tourism in the ultra-competitive Leakage. The "leakage factor" in ment. In many African countri` luxury market. Some countries tourism, i.e., that part of the tour- investors perceive tourism to have been successful in market- ist dollar that leaves the country more profitable than traditior ing to niche markets aggressively. to pay for the imports consumed sectors, particularly given real t Botswana, for example, in the by the tourism sector, is often tate appreciation. In Mauritius t Okavango Delta has developing cited. Leakage is calculated for industry has been locally own quality activities at the top end of tourism, but less frequently for and managed from the outset al investors diversified out of great benefits to civil society not budgetary revenues. Fiscal incen- gar and manufacturing into just the tourism sector. Nonethe- tives intended to attract potential irism. In Cote dlvoire, nation- less, fluctuations in demand for investors away from rival destina- and citizens, the latter being tourism seem to be less severe tions can place a downward pres- .irians of foreign extraction, than for the commodity exports on sure on tax revenues. Investors, -ninate the supply of tourism which many African countries de- instead, will be attracted to coun- vices. The perception of foreign- pend and tourism also appears to tries with appropriate and stable tninated management of hotels be immune from competition from policy, legislative and regulatory questionable today. Few hotels synthetic substitutes. frameworks for tourism, combined t sufficiently profitable to afford Taxation and rents. Taxes can ei- with performing infrastructure, :atriate salaries. The chain op- ther stimulate or stifle tourism good public health systems and a ttions, in particular, provide ex- growth. Policies must balance the crime-free environment. isive training programs. Foreign requirement for profitability of pri- pital and management can, vate sector investments and for Environmental and cultural )ugh, be a source of technology revenues for central and local gov- sustainability nsfer and stimulate the entire ernments to provide supporting The dependence of tourism on tor to greater competitiveness. social and physical infrastructure, natural and cultural resources Jolatility of demand. The average Government policies must ensure makes any negative impacts more )ercent growth rate in visitor ar- that the state and/or local admin- conspicuous. Water pollution, eco- als over the last decade for Af- istrations capture the rents that logical disruption, land degrada- a as a whole, masks wide swings arise from the commercialization of tion, congestion and deteriorating .ween countries. Fluctuations in the country's natural and cultural built assets, typify negative envi- irism are mainly due to country resources. Too often the tourist or ronmental externalities associated -iditions rather than price. As a a service provider captures such with poorly planned tourism. But, .bal industry, tourism faces the rents. "Willingness to pay" studies pollution and degradation from k of terrorist attacks, which, to- show that tourists will pay en- non-tourism sources often have -her with civil unrest, natural trance fees or environmental taxes negative impacts on the ;asters, crime and public health to conserve a specific asset pro- sustainability of tourism invest- ks, can quickly terminate de- vided that the funds are earmarked ments. Improved coastal zone )nd. Their resolution brings rather than allocated to general management, physical planning F in ng s Findings can be accessed via the World Bank Group's website at http:llwww.worldbank.org/ Click on Publications, then Periodicals. Or, Findings would also be of interest to: click on Countries and Regions, then Africa Name Institution _ _ _ _ _ _ _ _ _ _ _ Letters, comments, and requests for publications not Address available at the World Bank Bookstore should be ad- dressed to: Editor, Findings Operational Quality and Knowledge Services Africa Region, The World Bank 1818 H Street NW, Room J-5-055 Washington, D.C. 20433 e-mail: pmohan@worldbank.org and zoning are essential tools, Recurring constraints The Ministry of Tourism usue combined with appropriate macro- has the mandate for policy forrr economic and sector policies and Many of the current constraints to lation, but must work closely w incentives, to protect natural and the competitiveness and expan- other ministries that create p( cultural resources. Environmental sion of the tourism sector in Africa cies for the sector, such as Finar and Social Impact Assessments have been discussed. In addition, and Environment. Sector revie (ElAs) can be effective tools but appropriate financing for new con- and master plans are critical tec often their quality and local review struction and for expansion and nical inputs for the formulation processes are inadequate. Tourism refurbishment of hotels, particu- a national strategy for tourism. 'I can only be sustainable if the natu- larly small and medium, is often institutional arrangements ral and cultural assets on which it not available from local banks. In- tourism have to be customized is based are protected from degra- frastructure investments have not each country based on the size a dation. This is particularly true in kept up with the expansion of tour- characteristics of the sector. F Africa, which is variously marketed ism, with negative impacts on the quently, government and the r as a nature, wildlife, resort and natural resource base. As a mat- vate sector set up a statutory bc cultural heritage destination. ter of equity and social inclusion, with product development, m. such infrastructure should also be keting and promotion functiot Poverty and social inclusion extended to communities in the particularly if large-scale touri, Donors and NGOs have initiated immediate tourism area, probably development is envisaged. In worldwide community-based with differential pricing. Manage- cases, the strength of the partn projects, with stakeholder partici- ment and administration of the ship between government and t pation in decision-making, to es- sector must improve at the public private for-profit and non-prc tablish linkages to traditional tour- and private sector levels. Human sectors will determine the abil ism. These links include: employ- resource development and capac- of the sector to respond dynar ment and sourcing of goods and ity building are priorities. The for- cally to market changes and s1 services; establishing micro or mulation of air policies that attract tain growth. greater traffic is also critical. Pro- small-scale enterprises to supply mto n aktn smd tourist needs; and training for spe- moe on and marketeg is inad- cific activities, such as guides. In- quate terdependence between the local A framework for success community and the tourist facili- This article was written by lain ties generally creates mutual ben- Tourism is essentially a private Christie and Doreen Elizabe efits. Communities also host tour- sector activity but it is also a cross- Crompton as a summary of th ists directly and thus generate in- sector activity with multiple im- report; "Tourism in Africa", Afr come from their natural or cultural pacts. Private sector-led growth Working Paper Series, Number assets. The U. N. Commission for can only occur if the government, World Bank. February 2001. 7 Sustainable Development found private investors and operators, paper is available at: http that "The economic benefits of civil society, NGOs and local com- www.worldbank.ore/afr/wp tourism have the potential to alle- munities work together to forge index.htm. For more informati( viate poverty in the developing progressive alliances and to formu- please contact the authors world, but capacity building is late the macro-economic policies Ichristieaworldbank.org a needed at the local level to achieve and sector policies that provide the Cromptonde(aol.com these goals." foundation for sustainable growth.