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12.04.2003 Feature Article

The Economic Power Of Tourism

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Tourism in recent times has become a major economic force in the world and applauded for its sustained and rapid growth. It is regarded as the fastest growth sector of the 21st century and the third biggest international export after petroleum and motor vehicles. The success of the tourism industry has been liked to several well-meaning reasons encompassing economic, social, cultural and environmental benefits.

It is however proven that, it is the economic advantages that provide the main driving force for tourism development. The continual dwindling of commodity prices the world over has forced many developing and developed countries to embrace tourism as a rescue boat.

The world Travel Tourism Council (WTTC) forecasts that, by the year 2005,tourism and tourism related businesses will account for an output of US$1.4 trillion in taxes and accommodate around 1.6 billion international travelers by the year 2020.In Ghana, the ministry of tourism predicts a US$ 1.5 billion receipt by the year 2010.

The real positive economic impact of tourism any destination country can derive lies in employment generation, foreign exchange earnings, infrastructure development, increase in GDP, environmental resource protection, positive intersectoral linkages and the ability of tourism to open up rural communities to development. But for most developing countries, the prime motive for promoting tourism is foreign exchange maximization. In the case of Ecotourism, the original motive is that of biodiversity conservation and rural poverty alleviation.

Tourist expenditure is as “real” as any other forms of consumption and international tourist expenditure can be seen as invisible export from the host country, whereas domestic tourism can be seen as an export between local regions and perhaps an import substitute for national economy. Tourism, as a service based industry has been partly responsible for around 40 % of gross domestic product (GDP) in developing countries and over 60 % of (GDP) in developed or industrialized economies. It also accounts for 10 % of world ‘s total GDP. (Bhatia,1999). In Ghana, tourism contribution to national GDP is nearly 3.5 %.

As a service based industry, tourism is relatively labour intensive and offers substantial employment avenue for both skilled and unskilled labour both directly and indirectly. This means that labour requirements for the industry could be tapped right in the attraction communities thus reducing the unemployment menace that has engulfed developing countries including Ghana.

In Ghana, tourism has employed many in the fields of art and craft, food and beverage, travel and tour operation, horticulture, clothing and textiles, car rentals and other related services. In the rural areas where most attractions are located, and a pull of unskilled labour is present, employment from tourism has reduced rural urban drift as well as given additional employment to people already engaged in some traditional jobs. A typical example is Masomagro in the Central Region of Ghana where the whole village is employed by the community project. Another is the CAMPFIRE project in Nyaminyami in Zimbabwe where ecotourism has changed the economic life of the people tremendously. CAMPFIRE would be discussed in a few weeks to come.

Most government projects are financed from tax revenue generated, and tourism’s contribution to domestic revenue growth stem from: airport tax, VAT on hotels and restaurants, nightclub fees, entry fees to national parks, forts and castles, just to mention a few.

Tourism development also comes with tremendous multiplying effects, as exemplified by rising entrepreneural ventures in entertainments (cultural dance groups, night clubs), food (fast food centers), textile (tie and dye, batakari and kente), craft (akuaba dolls, masks, and leather products) etc. As tourists spend on these services and products, money in circulation in the attraction communities increases. The additional income in people’s pockets induces savings, hence creation of capital for investment or money to improve lifestyles.

Infrastructure development is another vital occurrence, which is powered by tourism development.

This improves the general outlook of destinations because when tourist activities are expanding in an area, central governments, local governments, investors, corporate bodies and entrepreneurs all collaborate in various business ventures to bring attraction centers to accepted standards.

In this wise, governments provide the substructures (good roads, electricity, portable water, etc) and the private sector provides the superstructure (hospitality facilities and such communication facilities as INTERNET and DSTV. The buildings that house these facilities beautify the communities. In fact the architectural designs of some tourism infrastructures make them attractions in their own respect, e.g. Sun City in South Africa, Kakum Park’s canopy walkway and Hans cottage botel, also in the Central Region of Ghana. Tourism development is therefore seen as a catalyst for expansion of otherwise rural communities.

Tourism also depends on other sectors such as agriculture, for the supply of food items, and transport for swift mobility. The tourism industry is therefore multifaceted in nature, influencing the growth of related businesses as well as the socio economic life of the communities in which they take place.

Even though critics of tourism question the accuracy of tourism statistical figures as doubtful, tourism, if planned and carefully monitored well, could be more beneficial to the host communities in their endeavors.

Richard Kwame Debrah (TOURISM ANALYST)

Richard Kwame Debrah
Richard Kwame Debrah, © 2003

The author has 10 publications published on Modern Ghana. Column Page: RichardKwameDebrah

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