By Marcel Langeslag, Director Aviation Africa at NACO
In an earlier article, we explored the correlation between economic activity and air traffic, where rising income levels were leading to greater numbers of passengers. Similarly, tourism in Africa is expected to grow as rising disposable incomes lead to more resources becoming available for travel. In this article, we explore some of the trends in tourism in Africa and look at initiatives that support its growth.
Understanding the economic impact of tourism
Tourism is an important sector of the economy that is linked to a wide variety of activities, needs and interests including: leisure, business, medical and religion. The World Travel & Tourism Council (WTTC) found that the industry in Africa contributed on average 7.1% to gross domestic product (GDP) and supported close to 25 million jobs (2019), employing comparatively high shares of women and youth.
Although this contribution is below the global average, World Tourism Organisation (UNWTO) data indicates that these figures have continued to rise steadily over the past decades, at around 3% per annum.
There are however significant differences in the contribution tourism makes to the economy on a regional level – 8.5% of GDP for North Africa against 6.5% for Sub-Saharan Africa for example – and a national level. These differences are illustrated in Figure 1 that shows tourism’s share of GDP for the 16 countries in our sample, and sets these numbers against the propensity to fly.
Figure 1: Correlation between air traffic and tourism (source: World Bank and ACI, 2019)
The trendline highlights a clear correlation between the two: tourism is more important in countries with greater levels of air traffic. This also illustrates an interesting “two-way” effect where countries with more tourism activity have a higher demand for air travel, and countries with better air connectivity support more tourism activity.
While Europe remains the most important source market for international tourists in Africa, 4 out of every 10 international tourists originate from within the African continent. The United Nations Conference on Trade and Development (UNCTAD) “Economic Development in Africa Report 2017: Tourism for Transformative and Inclusive Growth”, showed that while Africans are increasingly driving tourism demand in Africa, North Africa and high-profile tourism destinations such as Cabo Verde and the Gambia continue to be dominated by European travellers. As many as two-thirds of visitors in Southern Africa are fellow Africans.
It is important to note that in this context, tourism includes visits made for the purpose of “holidays, leisure and recreation, business, health, education or other purposes”. This includes for example, cross-border traders as well as people visiting friends and relatives in other regions or countries.
With their high per capita expenditures, visitors from outside the continent are an important source of foreign exchange earnings. However, earnings from these tourists are highly seasonal and subject to much greater leakage – income that is not retained in the local economy – due to the involvement of foreign-owned businesses and demand for non-local products.
Intra-Africa tourism, on the other hand, creates greater linkages with the local economy and is more evenly distributed throughout the year. This difference is due in part to various types of tourists coming from different source markets and the different activities they undertake. For instance, European visitors to Africa may be mainly holiday travellers, whereas Africans may be predominantly visiting friends and relatives.
Unlike visitors from Europe, the Americas and Asia, intra-African travellers rely less on air travel. Many might take a bus or drive to neighbouring countries, as the high costs of flights and limited connections can be prohibiting factors. Although the number of non-stop intra-African routes has increased by a third over the past decade, intra-Africa seat capacity represents only 22% of total seat capacity at the continent’s busiest airports (see Figure 2).
After most flights were grounded in response to the COVID-19 pandemic, many countries have gradually resumed domestic travel. In those areas where international travel has restarted, demand seems to be driven mostly by the visiting friends and relatives (VFR) market segment. It remains to be seen what re-booted seat capacity profiles at African airports will look like.
Figure 2: Two-way seat capacity at Africa's 10 busiest airports (source: Diio Mi, 2019)
Limited intra-Africa connectivity is recognised by many as an important barrier to the growth of tourism on the continent. The low level of connectivity may be caused by the lack of economies of scale, operational inefficiencies and high operating costs. But restrictive bilateral air service agreements (BASA) between countries also play a role here. This is where the liberalisation of air space through initiatives such as the Single African Air Transport Market (SAATM), comes into play. Indeed, such agreements are vital since the free movement of persons across national borders is a key pillar in the growth of tourism.
One of the African Union’s (AU) flagship projects of the 2063 Agenda is the free movement of people, which would eventually lead to a universal African passport. The AU and the African Development Bank (AfDB) have been tracking progress on this project through the visa openness initiative, scoring each country with a visa openness score (see table 1). In their Africa Visa Openness Report 2019 the AU and AfDB indicate that steady progress is being made towards lowering the administrative burden for Africans to travel within Africa. Indeed, as more countries adopt visa on arrival, eVisa or remove visa requirements all together, the intra-Africa travel experience is becoming smoother.
The current status is summarised in the report as follows:
• Africans do not need a visa to travel to 25% of other African countries
• Africans can get visas on arrival in 26% of other African countries
• Africans need visas to travel to 49% of other African countries
• 21 African countries out of 54 (39%) offer eVisas
Table 1: Visa Openness Index of selected African countries in 2019 (source: visaopenness.org)
Relaxing visa requirements allows visitors to save time and money, making destinations more attractive and competitive for tourists, as well as investors. Although visa openness is important, our data shows no clear (positive) correlation between the visa openness index and either tourism as a share of GDP, tourist arrivals or the propensity to fly. In fact, UNCTAD has even identified a negative correlation which it attributes to large variations between countries and major tourism destinations such as South Africa and Tunisia being relatively restrictive for African tourists.The design of a visa regime in each country involves considerations around tourism as well as factors such as security or migration. Besides individual countries’ visa regimes, regional initiatives such as the East Africa Tourist Visa (for Kenya, Rwanda and Uganda), the KaZa UniVisa (for Zimbabwe and Zambia) and the ECOVISA (for the 15 members of the Economic Community of West African States) are worth noting.
In order to maximise the benefits these regimes deliver to economic development on the continent, initiatives focused on the free movement of people should go hand in hand with free movement of goods and liberalisation of air transport.
Where to from here?
Visa openness, the African Continental Free Trade Agreement (AfCFTA) and SAATM are important ingredients for integration of the African continent. Our data analysis shows that aviation is key in linking together industries and economies. Airports and airlines have an important role to play, by encouraging governments to implement enabling policies and by working together on improving connectivity.
By collaborating with various parties and industry sectors, specific tourism (and trade) markets can be targeted and stimulated. Multi-stakeholder initiatives, involving tourism agencies, chambers of commerce, investment agencies and private business, have been shown to be successful in strengthening and expanding air travel routes. Furthermore, professional air service development programmes and targeted incentive schemes are effective in establishing new routes and increasing capacity on existing routes.
The success of such route development efforts, as well as the underlying policy interventions, will hinge on the effective use of data and in-depth analysis.
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