African tourists emerge as powerhouse for tourism on the continent, says UNCTAD report

Four out of 10 international tourists in Africa come from the continent itself, according to the new UNCTAD Economic Development in Africa Report 2017: Tourism for Transformative and Inclusive Growth.

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Pic Credit: Travel Noire

In sub-Saharan Africa, this number increases to two out of every three tourists whose travels originate on the continent. Data backing this key finding show that, contrary to perception, Africans themselves are increasingly driving tourism demand in Africa.

Tourism in Africa is a flourishing industry that supports more than 21 million jobs, or 1 in 14 jobs, on the continent. Over the last two decades, Africa has recorded robust growth, with international tourist arrivals and tourism revenues growing at 6 per cent and 9 per cent, respectively, each year between 1995 and 2014.

Focusing on tourism for transformative and inclusive growth, this year’s report encourages African countries to harness the dynamism of the tourism sector.

By collecting and comparing data from two different periods, 1995-1998 and 2011-2014, the report reveals that international tourist arrivals to Africa increased from 24 million to 56 million. Tourism export revenues more than tripled, increasing from $14 billion to approximately $47 billion. As a result, tourism now contributes about 8.5 per cent to the continent’s gross domestic product (GDP).

The First Ten-Year Implementation Plan of the African Union’s Agenda 2063 aims at doubling the contribution of tourism to the continent’s GDP. To meet this target, tourism needs to grow at a faster and stronger pace.

“Tourism is a dynamic sector with phenomenal potential in Africa. Properly managed, it can contribute immensely to diversification and inclusion for vulnerable communities,” said Mukhisa Kituyi, the Secretary-General of UNCTAD.

To realize the potential of intraregional tourism for the continent’s economic growth, African Governments should take steps to liberalize air transport, promote the free movement of persons, ensure currency convertibility and, crucially, recognize the value of African tourism and plan for it. These strategic measures can have relatively fast and tangible impacts. In Rwanda, the abolition of visa requirements for fellow members of the East African Community in 2011 helped increase intraregional tourists from 283,000 in 2010, to 478,000 in 2013.

Another important theme highlighted in the report is the mutually beneficial relationship between peace and tourism. Peace is of course fundamental for tourism. The mere appearance of instability in a region can deter tourists, leading to devastating, long-lasting economic consequences. However, the perception of danger does not always correspond with reality.

The 2014 Ebola outbreak in Western Africa had a very high cost in terms of tourism numbers and revenue lost across the entire continent. Despite being limited to relatively few countries in the western part of the continent, tourist arrivals and bookings fell in countries as far from the outbreak as South Africa and the United Republic of Tanzania.

The report notes that the economic impacts of political instability can be quite significant and long-lasting. For example, following political instability in Tunisia, total tourism receipts in 2009-2011 declined by 27 per cent on average, from $3.5 billion in 2009 to $2.5 billion in 2011.

Addressing safety and security concerns and swift responses to crises by African Governments and regional institutions are paramount to the growth of tourism in Africa. Promoting strategies aimed at improving Africa’s image in the global media are also critical in ensuring the sector’s recovery after conflict or political unrest.

During the next decade, tourism’s continued growth is expected to generate an additional 11.7 million jobs in Africa. Furthermore, where tourism thrives, women thrive. In Africa, more than 30 per cent of tourism businesses are run by women; and 36 per cent of its tourism ministers are women, which is the highest share in the world.

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Pic Credit: UN Multimedia

Creating firm links between tourism, the agriculture and infrastructure sectors, ecotourism and the medical and cultural tourism market segments can foster diversification into higher value activities and distribute incomes more broadly. To unlock this potential, African Governments should adopt measures that support local sourcing, encourage local entities’ participation in the tourism value chain and boost infrastructure development. This continued investment into the tourism sector in Africa could lift millions out of poverty, while also contributing to peace and security in the region.

See full article here

See UNCTAD report here

Source: TRALAC

Draft Kenya Investment Policy: Investment growth for sustainable development

Through the leadership of the Ministry of Industry, Trade and Cooperatives (MITC), an inter-ministerial task force has developed a draft Kenya Investment Policy. The policy is aimed at enhancing the conduciveness of the environment for investment growth, though a harmonized approach to investment promotion, facilitation and retention. In addition, the policy provides for revision of legislations affecting the overall investment network.

 

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Pic Credit: Mutua Matheka

The development of the Kenya Investment Policy has involved a consultative process covering the national and county governments, including the private sector stakeholders.

Executive summary

To achieve the twin targets of Kenya’s Vision 2030 – 10% growth per annum and middle income industrializing country status – the Government of Kenya recognizes the critical role played by private investment and has put measures in place to attract and retain foreign investment while encouraging the expansion of domestic investment, with the aim of increasing private investment to 24 per cent of GDP by 2030.

Up to now, Kenya has not had a single and clearly defined policy solely focusing on investment generation and retention. The Government of Kenya has however formulated various strategies and policies that focus on investment growth and support, stipulated in various policy documents such as National Development Plans, Sessional Papers and Master Plans, including the new Constitution 2010. These programs and initiatives have had limited impact. They also led to the adoption of various fiscal and non-fiscal incentives, changes in investment related regulations and the creation of several government agencies tasked with responsibility for investment promotion and facilitation, some with overlapping mandates leading to duplication of efforts and unnecessary strain on limited government resources.

To address the limited impact of investment and a number of other challenges relating to the entry and treatment of investment, the Government developed the Kenya Investment Policy. The policy development process took a holistic approach to gain an understanding of Kenya’s context as well as international best practices to inform the policy’s proposals. The policy is guided by six core principles, which emphasise the need for openness and transparency, inclusivity, sustainable development, economic diversification, domestic empowerment, and global integration.

The KIP addresses private investments at the national and county levels. It is a comprehensive and harmonized policy to guide attraction, facilitation, retention, monitoring and evaluation of private investment. The KIP further recognizes the central role of Kenya’s Constitution (2010) which clearly delineates the complementary roles that national and county governments play in investment promotion. The KIP also creates an institutional framework that fosters coordination for efficient investment attraction, facilitation, and a favourable investment climate. The policy actions proposed in the KIP are designed to support and stimulate private sector development and improve the overall ease of doing business and competitiveness in the economy, with the ambition that Kenya becomes the premier destination for at least 50% of multinationals establishing their continental headquarters in Africa.

The KIP addresses some of the fundamental requirements for establishing a well-coordinated investment environment that will attract high-quality FDI into the country while upscaling local SME capacity. These include: a harmonized regulatory and institutional framework for investment; an effective investment promotion and facilitation government function; an active focus on attracting beneficial, high quality foreign investment; building a critical mass of domestic investors including strengthening their capacities; a targeted approach to offering incentives by aligning them to development priorities; significant resources devoted to investor aftercare and increasing national savings.

These objectives are to be achieved through the implementation of critical measures stated by this Policy, including the following:

Investment oversight. Operationalization of the National Investment Council, which will be responsible for formulating the country’s overall investment strategy and implementing the KIP to ensure that investment contributes to the country’s development goals, and approving Bilateral Investment Treaties and investment related chapters in treaties.

Investment promotion and facilitation. The primary responsibility of investment promotion and facilitation falls on the Investment Promotion Agency. Counties, through County Investment Units play a major role by developing bankable projects, outlining their competitive positions, and preparing marketing materials aligned to their areas of strategic focus. Officials at the county level also play an important role in investment facilitation, including securing community approval, providing land where needed, and participating in investment promotion activities for specific investment projects in collaboration with the IPA.

Investment entry and establishment. Various government agencies are involved at different levels along the investment entry and establishment process. The IPA plays a facilitation role among these entities through the One-Stop Centre to minimize the administrative burden on investors and government agencies.

Investment retention and aftercare. Counties play a major role in ensuring that investments located within their territory are given the highest level of attention. The Government is responsible for ensuring that the overall investment climate remains attractive to potential and existing investors. The IPA is responsible for taking the lead to provide effective aftercare services by working with counties and national government actors.

Investment assessment. Ensuring that investments are contributing to the country’s economic, social and environment sustainability objectives is important. Measuring investment impact with respect to community engagement, development objectives, and supplier linkages between investors and small and medium sized enterprises is a shared responsibility among the different actors. While the NIC will spearhead this process, it must work closely with other national and county institutions to ensure that the country continues to target and attract beneficial investment.

Establish a promotion and facilitation fund resourced by both the exchequer and grants from development partners, to be used for the purposes of targeted investment promotion and facilitation.

Establish land banks which could be used for large projects, including encouraging counties to establish a savings scheme where a percentage part of their budget allocation goes to purchasing land to be set aside for investment purposes.

» Download: Kenya Investment Policy, revised draft June 2017 (PDF, 1.08 MB)

 

Source: KEPSA

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