Dar tourism can bring in more, says World Bank

Tourists at the Serengeti National Park. Tanzania can do much more to improve the share of tourism earnings in its economy, a new report by the World Bank says. PHOTO | FILE 

By PAUL REDFERN, TEA Special Correspondent

Posted  Saturday, January 31  2015 at  13:44

In Summary

World Bank report recommends:

• Diversify tourism from the current emphasis on high end activities in the north around Arusha and Zanzibar.
• Further integrate local communities and small operators into tourism activities through benefit-sharing processes.
• Revisiting the current complex system of taxes and fees, and the non-transparent use of revenues collected from tourism.

Tanzania can do much more to improve the share of tourism earnings in its economy, a new report by the World Bank says.

While the tourism sector is a major contributor to Tanzania’s economy, the latest Tanzania Economic Update shows that it can grow further and create more high-paying jobs, if the government makes some policy changes. 

“Tanzania is in a good place with tourism and yet could do considerably better,” said Philippe Dongier, the country director for Tanzania, Burundi and Uganda.

The country received one million visitors in 2013, bringing in $1.5 billion in foreign exchange earnings, or about 3.4 per cent of Tanzania’s total GDP.

Tourism is considered to be a high priority sector in President Jakaya Kikwete’s development agenda, which aims to multiply by eight the revenues by 2025, or double the sector’s annual growth rate.

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“This target is indeed achievable but only if there is a change in policies and mindsets among all stakeholders,” said Jacques Morisset, World Bank lead economist who authored the report.

Policy changes

To increase tourism benefits to the economy and the public, the latest update proposes three strategic directions.

The first is to diversify tourism from the current emphasis on high end activities in the north around Arusha and Zanzibar, where up to 90 per cent of tourism activities are concentrated.

The report recommends realising other opportunities especially in the south, and developing attractions and activities that cater to tourists on more modest travel budgets, including more local and regional visitors.

The second direction is to further integrate local communities and small operators into tourism activities through benefit-sharing processes. While such efforts already exist in Tanzania, they are still on a small scale and have had limited impact on the ground.

The third direction requires revisiting the current complex system of taxes and fees, and the non-transparent use of revenues collected from tourism.

The Economic Update recommends that the system be simplified and enforced more equitably with the goal of reducing transaction costs for businesses and closing loopholes that create space for illegal payments.

The distribution of the revenues also needs to be streamlined so that they can be tracked easily to increase benefits for the majority of citizens.