The report’s recommendation to expand tourism to increase economic growth comes on the heels of a recent rebasing of gross domestic product (GDP) and the latest household budget survey, which challenges the traditional view of the Tanzanian economy. With the income per capita at $950 and the poverty rate down from 33% to 28% in 2012, the country is closer to reaching middle-income status, according to the report. In 2014, the report notes that the economy continued to expand by around 7% with controlled inflation averaging 5%.
Despite significant tourism growth and currently employing around a half million people, many Tanzanians do not reap the benefits; about one-third of the country’s population still lives below the poverty line. According to the report, not only is tourism a booming global industry, it is also capable of creating a large number of jobs, setting the stage for a new tourism strategy that reaches more Tanzanians.
To help the country reach its goal to increase tourism revenue eightfold by 2025, the report outlines three pillars to address current tourism challenges;
- Pillar I: Diversification of Geographic Locations and Tourism Segments
Currently, tourism caters to the high-value tourist who can pay several thousand dollars to see animals while at exclusive resorts in two specific locations: Northern circuits around Arusha and Zanzibar. Diversification of the industry would include both expanding geographic options and other tourist attractions that meet the expectations of a broader range of tourists, such as beach activities, cultural as well as business tourism.
- Pillar II: Integration of Tourism Activities at Existing Attractions
Arguably, Tanzania’s tourism industry is not creating enough high-value, productive jobs for local workers, with an average worker making only one-third of what his or her counterpart makes in Kenya. In addition, many resorts rely on imported materials, equipment and food. Proactive policies, developed jointly by the public and private sectors, are needed to address these two areas with the goal of enhancing local skills and quality to meet the standards of this highly competitive industry.
- Pillar III: Improvement in the Quality of Governance
The tourism industry is currently constrained by the imposition of multiple taxes and levies that discourage investors, particularly small investors and increases opportunities for rent seeking and corruption. This pillar involves the implementation of a fair, business-friendly taxation system and the development of transparent redistribution mechanisms, including to local stakeholders.
If the goal of increasing tourism is achieved, the increased pressure on the environment will also present some challenges that will need to be managed, according to the report. These include managing uncontrolled poaching of giraffes and elephants, competition for water resources and land that can generate l conflicts of interests between farmers, hydropower operations and the preservation of natural ecosystems that support Tanzania’s tourism.
