Dar es Salaam, 5th April,
2012: For a number of years Tanzania has
failed to reach the projected forecast of one million tourists arriving annually.
According to the Director of Tourism Ibrahim Musa, last year the nation was
short of the magic number, by about 200,000.
“We
failed to reach a million tourists because of the economic crisis that hit the
tourist’s home countries,” he says. Nevertheless,
even before the economic crisis, the nation had been aspiring to reaching that number with no success.
President Jakaya Kikwete in his keynote
speech at the 17th Annual Research on Poverty Alleviation (REPOA) said tourism
was one of the sectors crucial for economic transformation, and the challenge
was how to ensure it benefits ordinary citizens. He also mentioned that attracting one million
foreign tourists per year was paramount to pushing the industry to a new level
adding that this calls for the improvement of services and promotion of the
sector.
A
city like Barcelona in Spain boasts of 25 million arrivals every year. In
Africa, South Africa leads the pack, with about 10 million tourists. Close to home; Kenya in the last two years
has managed to hit over a million arrivals annually. But Uganda, Rwanda and
Mauritius, like Tanzania are struggling to hit the mark.
This is bad news for Tanzania with its
abundance of natural resources and wild life because the nation possesses huge potential
to do better. The World Economic Forum
Travel and Tourism Report issued in 2011 ranks Tanzania second in the world for
its natural resources. This should ideally translate into huge tourist figures
but unfortunately, the country is ranked 110 overall in its tourism
competitiveness.
Mr
Malcolm Toland, an experienced consultant on economic issues, speaking at the Hotel
Association of Tanzania (HAT) offices said a good investment climate for
tourism would easily take the industry to a new level.
“For Tanzania, the magic number can be
achieved very easily. Just allow a favourable business environment to flourish.
After all, the country has got world class tourist assets,” said the consultant
who has worked with development agencies, and public and private sectors in
various African countries.
That kind of thinking is also supported by Laurent
Corthay,a Private Sector Development Specialist in the Investment Climate
Advisory Services of the World Bank Group,and Jan Loepricka,a member of the Institution’s
Business Taxation team, who focuses on tax regime diagnostics and reform
implementation.
The World Bank paper: ‘Investment Climate
in Practice’ published in June 2010, asserts that “a good investment climate
for tourism, underpinned by a sound tax regime, can play a central role in a
government’s growth and development strategy.”
Mr Tolandi’s undertaking a study that seeks
to find out if Tanzania tourism licensing is economically competitive and
viable, and has said there has to be value in such a licensing regime for it to
be effective. “It has to involve best practises as one of the values”, he
asserted.
“Tanzania’s possession of excellent tourism
assets coupled with her long political stability, positions the nation to a
point of reaping huge benefits from the world tourism trade. Many efforts have been made towards that aim,
so it is only prudent to ask why the failure?” “The solution is multifaceted
and needs many players to get involved as the industry is very diverse. Most of
the efforts in the Tanzanian situation at the policy level should be geared
towards improving the business climate for the sector to flourish,” Mr Toland
said.
Currently, a number of regulatory factors
complicate the tourism industry in Tanzania. After meeting the requirements of the
Business Registration and Licensing Agency (BRELA), there are also the
regulatory requirements of the local authorities, and sometimes sector based
agencies requirements. For the tourism industry, after meeting BRELA and local authorities’
needs, one has also to apply for a licence from the Tanzania Tourism Licensing
Board (TTLB) formerly known as the Tanzania Tourism Licensing Agency (TALA).
“In such a scenario it is obvious the
licensing regime for the tourism industry is complicated. When licensing is
complicated, businesses react by staying informal – this is true anywhere you
go in the world,” said Mr Toland. So when such businesses stay informal, the
economic potential of a nation is denied. “The main actors in any sector always
want fast, easy and less burdensome regulations”, he said.
“To get more people in the tourism sector
to formalise- to get the tourism license – issuing the vital document needs to
be streamlined. If this is done, at the end of the day, more players become mainstream
and the government is the winner,” he said.
“To fast track more investments in the
sector, it would be good to look again at the tourism licensing regime- to make
it simple and consolidated. Stakeholders have been complaining of too many
licenses and levies.
Mr
Toland is also of the opinion that it is
high time the stakeholders came up with a sector vision that upholds best
practises including a simplified licensing regime, that will attract local and
international investors.
Despite the complicated licensing regime, the
Tanzania Investment Centre (TIC) has in the past 16 years registered 1727
investment projects in the tourism sector. This places the sector second
overall (Manufacturing is number one, with 2217 projects). In 2011, the tourism sector had the highest
number of new projects registered at 222, surpassing manufacturing which had 206.
Yet despite the high figures for tourism projects
registered by TIC up 2011, numbering to 1727 only 564-tourist companies
operated with a tourism licence by the end of last year.
Tourism has been pivotal in providing a
significant source of income in Tanzania (over $1 billion in 2010) and creating
jobs. The indirect benefits are countless, and touch upon other important
sectors like agriculture, trade, construction and so on. So it is paramount to
look at the reasons why, such a huge
number of investors don’t have the specific sector licence. Mr Damasi Mfugale, HAT Chairman, added that
there are many people in Tanzania that wish to make their way in tourism but
they cannot afford the licensing fee. This coupled with the fact, that many
investors in the sector have not been able to obtain the vital document, needs
more scrutiny.
HAT, a
non-profit and membership-based organisation that serves tourism accommodation
providers in Tanzania, has commissioned
Mr Toland to undertake a study that looks at the impact of tourism licensing,
with financial assistance from BEST-AC, which run a grant programme that assists business
membership organisations to create a better business environment.
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