THE FIRST–ORDINARY SESSION OF THE AFRICAN UNION SPECIALIZED TECHNICAL COMMITTEE ON TRANSPORT, INFRASTRUCTURE, ENERGY AND TOURISM LOME, TOGO 13 - 17 MARCH 2017 INVESTING AND FINANCING TOURISM IN AFRICA by Dr Salifou Siddo CEO: SME TradeLinks (Pty) Ltd
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INVESTING AND FINANCING TOURISM IN AFRICA...Tourism Growth from Emerging Markets PerspecJve v Internaonal tourist arrivals in the emerging economies (Asia, Lan America, Eastern Europe,
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v Tourismisamajorcategoryofinterna=onaltradeü Totalvalueoftourismexports-US$1.5trillion
ü US$4billionadayonaverage
ü Interna=onaltourismrepresents7%oftheworld’sexportsingoodsandservices
ü TourismranksthirdaTerfuelsandchemicalsandaheadoffoodandautomo=veproducts
ü Inmanydevelopingcountries,tourismranksasthefirstexportsector.(UNWTO,2015)
TourismGrowthfromEmergingMarketsPerspecJve
v Interna=onaltouristarrivalsintheemergingeconomies(Asia,La=nAmerica,EasternEurope,Africa)
ü Growingatdoubletherate(4.4%peryear)thatindevelopedeconomydes=na=ons(+2.2%ayear)
ü Numberofarrivalsinemergingeconomiesexpectedtoexceedthoseinadvancedeconomiesbefore2020
ü In2030,57%ofinterna=onalarrivalswillbeinemergingeconomydes=na=ons(versus30%in1980)and43%inadvancedeconomydes=na=ons(versus70%in1980)
(UNWTO,2015)
ZoominginonAfrica
v UNWTOstatsindicate:
ü Africaa_racted53millioninterna=onalvisitorsin2015
ü Tourismgrowth:5.4%averageannualgrowthbetween2005and2014(comparedtotheworld:3.8%).
ü TourismReceipts:USD33billion(Euro30billion).
ü UNWTOprojectsinterna=onaltouristarrivalstogrowto7%inAfricaby2030.
SituaJonalAnalysis
v Na=onalgovernmentshavebeenattheforefrontoflargehospitalityinfrastructuredevelopmentsü Limitedsuccess,ü Failureinmostcasesü Governmentisnotknowntobeasuccessfultourismoperators
v Liberaliza=onofthetourismsector
ü Newapproachtotourisminfrastructuredevelopmentü Governmentstocreateaconduciveenvironmentü Privatesectortoinvestandmanage
v GrowinginterestinfinancingtourismdevelopmentinAfricabyü Commercialbanksü Globalbrandsü Na=onaldevelopmentfinanceins=tu=onssuchastheIDCinSouthAfricaü Interna=onalDevelopmentFinanceins=tu=onssuchasIFC,MIGA,AFREXIM
KeyEconomicBenefits-IFCasaCaseStudy
v Anexcellentexampleofkeyeconomicbenefitsgainedthroughfinancingandinves=ngintourism/hospitality
v Since1956,IFChasinvestedmorethan$2.5billionin251hotelprojectsindevelopingcountriesworldwide.
v Theseinvestmentshavehadamajoreffectonlocaleconomiesbycontribu=ngtoeconomicdiversifica=onandsustainablegrowth.
v Theyhaveboostedthetravelandhospitalitysectorsandgeneratedmuch-neededjobs,foreigncurrency,andtaxrevenue.
v IFC’shotelinvestmentscreateanaverageof1.5to3jobsforeachhotelroom.
v Theyalsoprovidesupplychainlinkagesfromconstruc=ontoopera=onandsecuremarketsforlocalfarmersandSMEsuppliers.
AfricaistheNewBaQlegroundforTourismInvestments
v Africanhoteldevelopmentprojectsatthestartof2013:
v FinanceIns=tu=onsü Riskaversionoflocalcommercialbanksü Lackofunderstandingoftheeconomicsofthesectorü Buildingcosts(costperkey)ü Profitexpecta=ons
ChallengestoInvesJng/FinancingTourisminAfrica
v Opera=onalissuesü Limitedavailabilityoflocalopera=onalskillsindes=na=onsü Qualityassuranceandstandardsü Limitedaccesstotouristsourcemarketsduetopoordes=na=onmarke=ngü Safetyandsecurityissues
v Othersocio-economicissuesü Revenueleakagesü Crowdingoutoflocaltourism/hospitalityentrepreneursü ExclusionofSMMEsfromfullpar=cipa=oninprocurementvaluechains
v Governmentsü Createaconduciveenvironmentthatleadstopolicyuncertaintyreduc=onü Reducebureaucra=credtapethathindersinves=ngintourismü Ensurepolicycoordina=onwithothergovernmentdepartmentsintermsofdecisionsthatimpacttourism