Not the best of times for Zimbabwe’s tourism industry. Tourist arrivals were down by 20% in 2015 in comparison to the previous year, according to the Employers’ Association of Tourism and Safari Operators, the reason was, quite predictably, the largely reported Ebola outbreak, which put the whole world in danger, but had its center in West Africa.
The industry isn’t backing down, though, and several actions have been put in place in order not only to improve on last year’s disappointing results, which saw companies suspending the payment of bonuses, but also beat 2009, a record-year for Zimbabwe.
Tourism stakeholders expect a 10% rise in demand, but insiders estimate that big marketing campaigns will be needed for companies to accomplish their goals.
2004’s Ebola outbreak cost Zimbabwe a whopping $6 million, as cancellations rained down and buyers withdrew from the important tourism expo, but the Zimbabwe tourism authority believes the industry is making its recovery.
Meanwhile, neighboring Zambia has been visited by an estimated 1 million tourists last year, registering a 3.24% growth on average over the last five years. According to Zimbabwe tourism insiders, a similar growth could be within reach if the Victoria Falls International Airport was to be completed.
The completion of the airport could make a really significant difference for the country, as it would triple the handling capacity of the Victoria Falls airport, allowing more airlines to be licensed in Zimbabwe and increasing the number of passenger to 1.2 million, where it now lays around 400,000.
Unfortunately, the introduction of VAT on foreign tourists’ expenses has not helped the industry’s case, and neither has the devaluation of African currencies like the South African rand, both of which have taken a further toll on tourism, especially seeing as South African tourists were responsible for a slight boost to the industry in 2015.
It isn’t just the overzealous actions of local governments or the scare of infectious diseases that is casting a shadow over Zimbabwe tourism though. Two lion sub-species, which are mainly found in the region, have been considered endangered, and a ban on hunting products is pending the US government’s approval.
The Zimbabwe Tourism Council has reacted to this impending ban by expressing its disappointment with this action which might have substantial impact on the hunting industry and thus on the already crippled tourism industry of the country.
USA is the biggest market for Zimbabwe’s hunting packages, which are likely to be affected, but the ban also causes fear that other countries will follow such example. The argument behind these fears is that hunters will be discouraged by the fact that they can’t import their hunted goods, and they will stop hunting altogether.
The ban comes after a tourist shot ‘Cecil, the Lion’, a popular Zimbabwe attraction, and is only the latest in a growing list of bans on local hunting products.
Hunting will be one of the main topics of the 2016 Tourism Convention, to be hosted in Victoria Falls from February 10 to 12, an event aimed at encouraging the various sectors, including the people and government, to get involved in the tourism industry.
The World Bank says firmer commodity prices in 2016 could boost the economic growth prospects of most countries in the Sub Saharan Africa region..
According to the World Bank’s Global Economic Prospects, the region is expected to grow 4,2 percent this year, from 3,4 percent in 2014.
With the current electricity constraints being experienced in most countries expected to persist as well as the drought in Southern Africa, the region is likely to record a somewhat weaker recovery in 2016 than previously anticipated.
However, an easing of the power constraints, better fiscal policy measures and continued stability in commodity prices are likely to impact positively on growth.
“Commodity prices are expected to stabilise but remain low through 2017. Although governments are taking steps to resolve power issues, electricity supply bottlenecks are expected to persist. There are, however, considerable variations within the region. The fiscal policy stance in commodity exporters is expected to ease gradually as commodity prices stabilise,” the report said.
According to Global Forecasting Services, the commodity market is poised for some recovery.
“Although we expect commodity prices to remain well below their 2011 peak in years to come, 2016 will be a year of stabilisation, with our aggregate commodity price index registering a modest 2.6 percent rebound. This will be driven by a mild increase in oil prices, which will feed into the price of other commodities.”
Besides the fall in commodity prices, African countries have had to contend with depreciation of local currencies against the US dollar which led to most countries allowing their exchange rate to adjust, especially among oil exporters.
The region’s pattern of exports makes it particularly vulnerable to commodity price shocks. Fuels, ores, and metals accounted for more than 60 percent of the region’s total exports between 2010 and 2014 compared with 16 percent for manufactured goods. Lower commodity prices obliged a fiscal tightening in several commodity exporters, which caused a sharp slowdown.
Since October last year, Angola, Nigeria, Ghana, South Africa, Tanzania, Uganda and Zambia’s currencies have experienced depreciations of significant magnitude, reflecting existing or rising domestic vulnerabilities.
The report noted that activity is expected to remain subdued in the region’s three largest economies although for Nigeria, power and fuel shortages and fiscal consolidation which weighed on activity in 2015, are expected to diminish gradually.
“Growth is expected to remain weak in South Africa, as inadequate power supply, weak business confidence, difficult labour relations, and policy tightening slow activity. In Angola, government spending remains constrained, and elevated inflation has weakened consumer spending,” said the World Bank.
South Africa is expected to grow 1,4 percent this year from 1,3 percent in the previous year. Angola on the other hand will grow by 3,3 percent from 3 percent.
Global forecasting services says although copper prices in September last year bounced back from a six-year low on the announcement of large mine closures, sluggish Chinese demand will delay a recovery in prices until 2017.
This is expected to have an impact on Zambia which will record about 3,8 percent growth in 2016.
In 2015, Botswana was also affected by lower diamond prices as well as insufficient power supply due to drought. The World Bank said the Southern African country’s attention to drought and its effects on hydropower is expected to help the economy grow by 4 percent this year from 3 percent in the previous year.
Zimbabwe, which has also been significantly affected by low commodity prices, power shortages and drought, is expected to grow by 2,8 percent from the 1 percent estimated for 2015.
In Southern Africa, DRC, Tanzania, Mozambique, Namibia and Malawi are expected to record the highest growth rates of 8,6 percent, 7,2 percent, 6,5 percent, 5,5 percent and 5 percent respectively.
Lesotho and Mauritius are expected to grow GDP by 2,8 percent and 3,7 percent respectively.
Swaziland is the only country in the SADC region expected to record a slump in GDP growth to 0,8 percent from 1,3 percent last year.
The World Bank called for policy makers to find ways to broaden their tax bases as a short term solution.
In the medium term, countries were urged to design strategies to bring small enterprises into the tax net and boost administrative capacity while working on instruments such as urban property taxes to help generate revenues from a more balanced tax mix over the long run.
It also said structural reforms are needed to alleviate domestic impediments to growth and to accelerate economic diversification.
“An increasing share of the world’s poor resides in Sub-Saharan Africa (World Bank 2015j). Reviving growth and reducing vulnerabilities will be important for progress toward eradicating extreme poverty, and achieving the recently adopted Sustainable Development Goals. Policies to enhance domestic revenue mobilisation, increase the efficiency of public spending, and boost growth and economic diversification will play a critical role in these efforts,” the report said.