Jan. 4, 2018
According to the World Travel and Tourism Council (WTTC), travel and tourism directly contributed USD2.1 billion to Tanzania's GDP in 2016, representing 4.7% of economic activity in the country. The sector is forecast to grow by 3.7% in 2017 and by an average of 6.8% a year between 2017 and 2027, reaching USD4.1 billion, or 4.7% of GDP, by 2027. The total contribution the sector, direct and indirect, to the Tanzanian GDP was USD5.9 billion, or 13.3%, in 2016, and it is expected to grow by an additional 4.1% in 2017, according to the WTTC. Government estimates, however, put the sector's total contribution closer to 17.5% of GDP, illustrating the vital role it plays in Tanzania's economic wellbeing.
The WTTC also estimates that the sector will reach USD11.8 billion by 2027, representing 13.6% of GDP. The sector directly employed 470,500 people in 2016, or 3.9% of total employment, and accounted for 1,389,000 indirect jobs, or 11.6% of total employment. Forecasts expect that indirect employment figures will grow by an additional 4.6% on 2017, reaching 1,452,000. Additionally, tourism and travel's overall contribution to employment is expected to grow by 6.9% a year between 2017 and 2027, accounting for almost 13% of the country's overall employment, or roughly 2,117,000 million jobs.
Investment in the industry has been strong in recent years, and in 2016 total investment in the industry surpassed USD1.2 billion, or roughly 8.7% of overall investment in the country. Forecasts expect 2017 figures to grow by another 4.1%. Over the next decade, analysts forecast yearly growth of 6.6%, with total investment topping USD2.3 billion, or 9.2% of the total, by 2027. According to the WTTC, leisure spending makes up more than 85% of the travel spending in the country, while business-oriented spending accounts for the rest. Additionally, foreign visitors account for around 72.4% of total travel and tourism spending while domestic visitors represent the remaining 27.6%.
According to All Africa, the Tanzanian government recently announced a far-reaching investment scheme for bolstering tourism along the country's southern circuit. This USD156 million plan will be financed by The World Bank and will include vital infrastructure improvement such as the renovation of roadways to world-famous tourist spots, including the country's 25 game and forest reserves and 16 national parks. Airports servicing the country's popular southern wild lands will also receive funding, generating much-needed expansion and upgrade projects. Stakeholders across the country and the sector are energized by the plans, and they hope that Tanzania will solidify its position as one of the preeminent travel destinations in Africa
The government also hopes to secure financing to enhance its convention and conference infrastructure, a move that would allow Tanzania to greatly boost this already sizable contributor to the local economy. According to the Ministry of Natural Resources and Tourism, the conference tourism sector alone contributed more than USD670 million to the economy in 2016. The government is trying to move forward with plans to build a TZS3.2 billion exhibition hall near the Arusha International Conference Center in order to bolster the sector and draw more regional and global conferences. Arusha is a major gateway for travelers coming into the country, and national and local government are keen to see the sector expand there and across the country.
There is some evidence that the recently implemented VAT on tourism may be slowing growth in 2017, according to PwC. The 18% tax on tourism services is projected to reduce revenues somewhat. However, stronger infrastructure is likely to offset any declines caused by the VAT, as more tourists take advantage of easier access and more robust travel options. All in all, Tanzania is well positioned to expand across all areas of its travel and tourism industry in the coming years.