23/02/2020
Research about tourism life history in East Africa
Introduction Tourism is generally considered to be the largest industry in the world. It is the third largest export sector and one of the most promising in terms of future growth potential. As people’s income and education rises, demand for travel will steadily increase both domestically and internationally. Indeed, past performance confirms this positive outlook, notably for international tourism which is of particular interest for African countries such as Uganda. International arrivals have risen every year since 2010 and at an average rate of 7% per year. Arrivals in Africa were even stronger, rising by 9% per year since 2010, making it the best performing region in the world. Tourism also promises relatively robust prices with little fluctuation compared to the commodities on which most African countries depend. In fact, prices are likely to rise over time as the supply of tourism destinations rises more slowly than demand, and in most cases remains fixed. The number of iconic tourist attractions (Eiffel Tower, Venice, Taj Mahal) is virtually fixed, as is for all practical purposes, the number of African game parks. There are several other factors in favour of tourism.
It is relatively labour-intensive, offering a range of low and high-skilled jobs. Furthermore, these jobs are often in less-developed and rural areas of the country, whereas most other modern sector jobs tend to congregate in the major cities. And critically important, many African countries have an absolute advantage in tourism, notably in the areas of safaris and African culture and historical heritage.
Domestic tourism plays an important role in most developed countries and is increasingly important in developing countries. Among other things, it may serve to smooth out the seasonality of the tourism industry. However, as a source of economic growth in Africa, international tourism deserves priority attention. Given the almost limitless size of the world tourism market (over 1.3 billion persons), international tourism offers the potential for growth rates far in excess of what can be achieved by domestic tourism. The average expenditure per tourist is inevitably higher as well. Equally important, spending by foreign tourists – after accounting for imported inputs – represents a net addition to national GDP. Spending by domestic tourists will usually be offset in whole or in part by reduced spending elsewhere in the economy. Our focus in the rest of this paper is therefore on international tourism. The purpose of this paper is to identify ways in which the government can stimulate tourism as one driver of higher growth in Uganda. In the next section of this paper, we begin by examining why this sector sometimes lacks the support of policymakers in practice. We then summarize the current status of tourism in Uganda. Next, the paper turns to a discussion of options for government involvement. Given the competing demands for the scarce resources in the national budget, it is critical that a sense of priorities be provided.
We argue that the highest priority is management of the wildlife resource, including its relationship with neighbouring communities. We then go on to highlight three other priorities: tourism roads, human resources and marketing. This is followed by a brief overview of other issues which will need attention over the medium 3 term. We conclude with some ideas on how to improve implementation of the government’s strategy.
A sector sometimes neglected While the case for tourism may seem obvious, it is necessary to recognize why it may not always earn the attention it deserves. In some extreme cases, such as Senegal under President Abdoulaye Wade or Tanzania under President Julius Nyerere, there can be outright rejection at the highest level.
First of all, there tends to be a bias among policymakers in favour of industry and, in particular, manufacturing.1 This is partly due to the example of East Asia where manufactured exports drove their structural transformation with impressive results. However, the path followed by Africa is likely to be different for a variety of reasons. The most important one is a rather straightforward matter of comparative advantage. Africa is better endowed with natural resources – both mineral and land – than Asia, so its development will inevitably draw more heavily on these assets. These resources also push up wages and the exchange rate, making it difficult to compete with the remaining low-income Asian countries in labour-intensive manufactures. 2 The many land-locked countries of Africa are particularly disadvantaged when it comes to promoting manufactured exports given the high cost of importing inputs and exporting the finished product. Manufacturing is also becoming increasingly mechanized. Service exports, such as tourism or back-office support, are less prone to mechanization and less dependent on access to the ocean. Thus it has been convincingly argued that African industrialization will be characterized by a more diversified formula than in Asia, with a significant role played by agro-processing and services.3 There are also practical reasons which tourism has sometimes been overlooked. For one, it is difficult to measure. As a service, the product is not tangible, and it is provided by a wide range of actors spread across the country and cutting across sectors. Service providers are generally serving a variety of customers – international tourists, domestic tourists, but also ordinary residents (e.g. restaurants, taxis). Therefore, statistics bureaus will report every small agricultural or manufacturing export that passes through the port or border crossing, but fail to acknowledge tourism receipts. Regular annual spending surveys of tourists leaving the country are needed, but they are expensive and not always reliable. But things not measured are not usually appreciated, and it becomes very difficult to inform and evaluate policy. The dispersed nature of the industry also makes it difficult for policymakers to understand and dialogue with the sector players. Local actors range from guides and handicraft artisans to hotel owners, while some key players are based overseas, such as tour operators and airlines. Each 1 This has also been true of influential leaders in the donor community such as the World Bank which closed its tourism unit in 1978 and did not rediscover the importance of tourism until the early 200s. 2 Mineral revenues enable governments to raise government salaries which in turn put pressure on private sector wage rates. They also result in a stronger exchange rate. Abundant land enables more people to remain in agriculture and obliges firms to pay a higher wage in order to attract them off the farm. 3 Newfarmer, Page and Tarp, ed. Industries without Smokestacks, Oxford University Press, 2018. 4 group will have its own concerns and sometimes competing interests. Some operate in the informal sector. Rarely is there one voice to speak for the industry as a whole. Then there are arguments which are partly ideological in nature, though not without some legitimate foundations. The apparent dependence on foreign investors, tour operators, airlines, skilled labor and imported inputs can lead some observers to believe that little remains in the country except a few low-paid jobs. Certainly, it is important to maximize the domestic content of the industry. But most modern sector activities in low-income African countries are going to have a significant import content for a while, and all exports rely heavily on foreign transport companies. Country studies typically find that at least two-thirds of all tourists’ spending on goods and services received in a country stays in the country, and as its economy diversifies, that percentage steadily grows.4 Domestic suppliers learn to meet the quality standards of large hotels; skilled labour learns the tricks of the trade and gradually replaces expensive foreign managers. Only the smallest island states will inevitably have a higher dependence on imports. The optics can also be off-putting. The sight of apparently rich foreigners served by poor local workers can smack of neo-colonialism, especially when it is overlaid on racial differences. This has led to some backlash in the Caribbean, at least among intellectuals. However, if one asks the workers themselves, they are more likely to be appreciative of the opportunity. The working conditions are often better than those in the field or factory. There is nonetheless a role for educating tourists to encourage a mutually rewarding experience. Tourism can also lead to a clash of cultures, and the promotion of negative behavior. The dress code of tourists may run counter to local traditions. Music and dance may be devalued in an effort to earn tourist dollars. Visits by busloads to tourists to remove villages may encourage begging. Fun-seeking beach tourists have been accused of encouraging alcoholism and prostitution. Here too there is a role for educating tourists. But it also suggests that some destinations may have a limited absorptive capacity in the short run which requires slower growth in tourism arrivals while tensions are managed and communities adapt. Ideally, tourism may serve as an instrument to preserve and promote traditional culture. There are also issues related to the displacement of people, rising land values (though this is also an opportunity) and land grabbing, drug abuse, and the negative impact of wildlife on neighbouring communities near national parks. But these can be overcome through proper planning and management. Tourism in Uganda today Uganda has many tourism assets which are already attracting significant numbers of tourists and investors. The most notable is the presence of mountain gorillas in the southwest corner of the country, which only Rwanda and Democratic Republic of Congo have as well. This represents an important competitive advantage over Kenya, Tanzania and southern Africa. In addition, Uganda 4 Philip English, North-South Tourism: The Great Escape?, North South Institute, Ottawa, 1986. 5 can offer a variety of national parks which are better than the few in Rwanda or DRC. Thus, Uganda has been able to market tours of one or two weeks which combine gorillas and other game. Sometimes tourists stay even longer, especially if they are attracted by Uganda’s impressive variety of bird species (estimated at 1073). The source of the Nile at Jinja is another attraction, combined with adventure tourism (whitewater rafting, bungee jumping, etc.). The spectacular Rwenzori Mountains offer multiple-day trekking alternative, though few have availed themselves of this opportunity to date. Beautiful lakes, rich cultural and historical heritage and night life round out the picture. Official statistics record tourist flows of 1.4 million in 2017 and a steady growth from 1.15 million in 2011 (see Figure 1). However, this is somewhat misleading as it captures much more than the leisure and holiday tourists which one normally associates with the tourism industry. The number of leisure tourists was only 237,000 in 2016, with little change since 2012.5 On the other hand, 2017 appears to have been something of a breakthrough, as leisure tourists rose by 18.5% to 281,000. Figure 1: International tourist arrivals 2011-2016 Source: Wilber Ahebwa, Value Chain Analysis of Uganda’s Tourism Sector, 2017, p. 18. What explains this marked difference between total tourists and leisure tourists and why is it important? The total number represents all arrivals by non-residents no matter what the purpose of their travel. This includes substantial numbers of business persons (22% of the total in 2016), and persons visiting family or friends (38%). The category of “business” is a broad one which includes those coming for conferences, research and missions of development assistance The remaining 22% includes students coming to study in Uganda, others coming for medical treatment or for religious reasons, and persons in transit requiring an overnight stay.6 Thus leisure and holiday tourists only constituted 18% of the total in 2016, rising to 20% in 2017. 5 The much lower number in 2011 represents a temporary dip, as the number of leisure tourists was 140,00 as far back as 2007. 6 Uganda Bureau of Statistics, 2017 Statistical Abstract, p. 86. 6 This distinction is important because it is primarily leisure and holiday tourism which one can try to develop through good policies and investments. Most of the other categories are determined by exogenous factors – business opportunities, presence of family ties – and are likely to increase only slowly. The one exception is conference tourism, commonly referred to as MICE – meetings, incentives, conferences and exhibitions. This too can be promoted as a special form of tourism, as is the intention in Uganda. But to date this has been included in business tourism so no separate data exists. Focusing on the total number of tourists can be misleading in a several ways. As shown in Figure 1, it gives the impression of a steadily growing sector, when in fact there was virtually no progress in leisure tourism for the five years from 2012 to 2016. Second, comparisons with Kenya and Tanzania suggest that tourism is comparable in Uganda since the total number of tourist arrivals is almost the same. However, leisure tourists constitute about 75% of the total arrivals in these two neighbouring countries, compared to 20% in Uganda. Third, setting national targets according to the total number of tourists may be unwise given that such a large share of the tourist flows are not susceptible to government action. For this reason, the target of 4 million tourists by 2020 would appear unrealistic. It would be better to set a target for leisure tourists. In fact, the number of leisure tourists is itself a rather crude measure of performance. Better would be the number of leisure tourist-nights, since an increase in the average length of stay could have the same effect as an increase in numbers. However, the total level of spending by leisure tourists would be even better since ultimately it is the amount of money spent in the country which is of most interest. Time series data is not available for either of these measures. Fortunately, a spending survey has been recently conducted as part of a new exercise to establish a Tourism Satellite Account (TSA). 7 This found that the average length of stay for leisure tourists was 7.5 days, and the average spending per day was about US$400. This is good news in that it confirms that tourists are not simply coming to see the gorillas – as often happens in the case of Rwanda. It also suggests that there is ample room to expand the industry by increasing the length of stay of existing tourists. However, it does reveal that the average stay is considerably less than the two weeks often cited in literature on tourism in Uganda. In reality, some tourists are probably coming only for the gorillas, as part of a regional package, while many others are staying for 10 days or more. This data also permits an estimate of the total value of export earnings from tourism, and overall contribution to GDP. Total spending by international tourists amounts to US$1.6 billion, while that from leisure tourists is US$670 million. Even this more modest sum establishes tourism as the largest export in Uganda, well ahead of coffee which averages about US$400 depending on the year. The total contribution of tourism to GDP is represented by its value-added, taking into
