Tourism sector growth calls for quality infrastructure
This 2016 article reports about the constraints to the growth of tourism in Tanzania. Since 2012 tourism has been the leading sector in terms of foreign exchange earnings and it is the third largest recipient of Foreign Direct Investment (FDI).Having exceptionally rich natural tourism assets of world heritage status, Tanzania,s tourist sector is an ideal vehicle for propelling growth and poverty reduction. However there are factors that constrain the full utilization of the potential of the tourism sector. The factors include: outdated laws and provisions constraining entry into the business, weak linkages with local small medium enterprises (SME)s, inadequate quality of skilled local labour (in customer care, marketing, safety and hygiene standards), low local content and the concentration of Tanzanians in low paying unskilled tasks, low level of diversified tourism products and geographical focus (biased focus on tourism activities in the northern circuit e.g. marketing Tanzania as the land of Kilimanjaro, Serengeti and Zanzibar), which leaves out attractions in other regions such as the southern circuit. Insufficient public investment in tourism training institutions, limiting the potential of such institutions to become internationally accredited. These factors create weak linkages between tourism and other economic sectors, minimizing tourism’s impact on poverty reduction. Other factors include: sub-optimal links with between different tourism products on account of weak marketing strategies and tools. For example: weak development of non-wildlife tourist attractions (neglect of beach, historical, conference, cultural tourism and absence of man-made entertainment) all of which contribute to the shortening of days spent. The absence of the right mix of incentives in investment policy, such as differential incentives depending on different developmental needs between the northern and southern circuits, is a critical factor. For example the poor quality of infrastructure has been identified as a constraint to the growth of the sector particularly in the southern circuit while there are some indications the carrying capacity of the northern circuit has almost been exceeded.The report also argues for the introduction of Value Added Tax (VAT) to the tourism sector. According to the report the introduction of VAT at 18 percent was done after careful research, consultation between the government and key stakeholders within the sector and was well debated in Parliament. Rather than lower the number of tourists and negatively impact the aviation industry, VAT would capture more earnings in the sector which has grown in importance to the economy.