Tanzania tourism beats gold in foreign exchange earning

Tourist vehicles at Seronera Airstrip, Serengeti National Park, Tanzania.

Boasting $2.05 billion earning in the 12 months ending January, up from $1.89 billion by end of January 2014, tourism has overtaken gold as Tanzania’s leading foreign exchange earner despite threats from the Ebola disease.

Bank of Tanzania’s February Monthly Economic Review indicates that gold exports value plunged from $1.64 billion to $1.31 billion in the period under review, as both export volume and price in the world market dropped. About one million tourists visited the country during the period.

Tanzania Association of Tour Operators chief executive Sirili Akko told The EastAfrican that Tanzania remains competitive, “as the government suspended implementation of new value added taxes and entry fees.”

Tour operators are subjected to 23 different taxes, 12 being business registration and regulatory licenses fees as well as eleven duties for each tourist vehicle per annum.

“This is how things will look like, when private and public sectors work together,” he added.

Tanzania hopes tourist arrivals will hit 1.2 million this year, up from one million visitors in 2014, earning the economy close to $2.25 billion, up from last year’s $1.88 billion.

According to the five-year marketing blueprint rolled out in 2013, Tanzania expects two million tourists by close of 2017, boosting the revenue from the current $2 billion to nearly $3.8 billion.

According to the latest Tanzania Economic Update by the World Bank, the industry can grow and create more jobs. To realise this opportunity, the government should simplify its tax system and make its revenue allocations more transparent.

“There is no doubt Tanzania is in a good place with tourism but it could do considerably better,” says Philippe Dongier, World Bank country director for Tanzania, Burundi and Uganda. “Tanzania has abundant natural tourism attractions and is well recognised internationally.”

Tourism directly employs close to half a million Tanzanians and contributes to almost 25 per cent of total exports earnings and represents approximately 17.5 per cent of Tanzania’s total GDP.

To increase tourism’s benefits to the economy and the public, the update proposes diversification of tourism activities from the current emphasis on high-end tourism to include more modest travel budgets, local and regional visitors.

The other recommendations are to further integrate local communities and small operators into tourism activities, through benefit-sharing processes; and, revisiting the current complex system of taxes and fees, and the non-transparent use of revenues collected from tourism.