Africa: Where tourists go, trade seems invariably to follow
Traditionally, only the destinations in North, East and southern Africa illustrated the importance of the tourism sector as a driving force for economic growth. But now, more and more states in West and central Africa are also embracing the tourism sector.
The African Union too identifies tourism as one of the avenues through which the continent could achieve structural transformation, thereby shifting from agrarian-based economies towards those driven by manufacturing and services.
To realise this, the AU has established goals to be met by 2063 on the basis of 10-year implementation targets.
For instance, in its first 10-year implementation plan, 2014-2023, the AU seeks to double the tourism sector’s contribution to the continent’s GDP by 2023 from base year 2013, translating into about $338 billion.
In addition, it seeks to double intra-Africa tourism by 2023, that is, travel by Africans around the continent for tourism purposes. As in the case of trade, intra-regional tourism is comparatively low by prevailing global standards.
Despite its current position as a strategic economic sector on the continent, the tourism industry faces a number of challenges: The high cost of air transport; poor connectivity; and the unfavourable visa regime.
In fact, the African Development Bank’s 2017 Visa Openness Report revealed that Africans on average were required to apply for visas before travel to 55 per cent of other African states, unlike, their European counterparts.
The European Union has the free movement of people among its fundamental freedoms, while within the Schengen Area, which comprises 26 states, internal borders have been removed. This has resulted in the free movement of goods and services, and, importantly, people.
It is not by accident, therefore, that Europe now receives almost 50 per cent of global international tourist arrivals, numbering over 600 million.
Encouragingly, there have been a number of initiatives that could address the challenges that the continent faces and some solutions that tourism could help catalyse.
First, in January 2018, the AU launched the Single African Air Transport Market (SAATM) with the immediate signing up of 23 member states. It is expected that SAATM will open up African airspace, thereby improving connectivity and lowering the cost of travel.
The potential benefits are expected to be high, with IATA estimating that upwards of 155,000 new jobs and an additional $1.3 billion of GDP would be realised if just 12 countries were to ratify SAATM.
Second, in March 2018, 30 states signed the AU’s Free Movement Protocol (the Right of Establishment), with an additional state joining in April 2018. This initiative too will ease the movement of Africans around the continent.
Third, over the same period in March, 44 states signed the agreement establishing the African Continental Free Trade Area (AfCFTA).
The tourism sector stands to benefit in a number of ways. Under the Free Movement Protocol, the sector could gain from the free movement of labour given the disparities across the continent in terms of skills and knowledge.
Similarly, the sector could serve as a pathway through which the potential of the AfCFTA could be maximised. In North America, Europe and Asia, 80 per cent of tourists travel within their own region.
Again, the share of regional trade in North America, Europe and Asia is high, at 50 per cent, 69 per cent and 52 per cent respectively.
The same, unfortunately, does not apply to our continent either in terms of tourism or trade. In fact, intra-Africa tourism and trade shares currently stand at just 40 per cent and 18 per cent respectively.
Of interest, nonetheless, is that there is a consistent pattern between tourism and trade as evident in the case of the leading tourism destinations in the world and their respective trading partners.
For example, the United Kingdom, Germany, Belgium, Italy and Spain are among the top 10 source countries for France, which has consistently been the EU’s leading tourism destination hosting over 82 million visitors in 2016 (of which 64.5 million were from Europe). Likewise, these countries are also among its top 10 trading partners.
The same scenario applies to the United States of America and Asia. All this suggests a causal relationship: The higher the level of intra-regional tourism, the higher the apparent level of intra-regional trade and vice versa.
Tourism is about people travelling to other destinations, opening up possibilities of cultural exchange as well as the identification of new business opportunities.
The limited movement of Africans within the African continent has meant that very few, say, East Africans have been to central or West Africa and vice versa, and hence there is no way of knowing what opportunities are being wasted due to this lack of interaction.
Promoting intra-Africa tourism could, therefore, catalyse the generation of opportunities within the context of the AfCFTA.
By GEOFFREY MANYARA