Foreign Exchange Earnings from Tourism drop to a 10-year low
Foreign exchange earnings from tourism dropped to a 10-year low during the year ending October 2020, largely due to travel restrictions imposed by several countries across the world in response to the Covid-19 pandemic. Bank of Tanzania (BoT) figures show that Tanzania earnings from tourism during the year ending October 2020, plunged by over 50 percent to $1.2 billion compared to $2.5 billion that was registered during the year ending October 2019.
The last time that earnings from the sector were recorded at $1.2 billion was during the year to October 2010 when the country earned $1.23 billion from the sector. "This was attributable to the measures taken to limit the spread of Covid-19 in tourist source countries. The measures included lockdowns and suspension of international passenger flights," the central bank report reads in part.
The outbreak of the Covid-19 pandemic towards the end of last year saw countries across the world taking measures to prevent its further spread. The measures included lockdowns and suspension of international passenger flights among others.
By January 30, 2020, the World Health Organisation (WHO) designated Covid-19 a "public health emergency of international concern" (PHEIC), before declaring it a pandemic in March this year. In April this year, Tanzania joined the rest of the world, with Tanzania Civil Aviation Authority (TCAA) announcing suspension of all scheduled and non-scheduled international commercial passenger flights.
This led to a huge global slowdown of tourist flows. Data from the Tanzania National Parks Authority (Tanapa) show that the largest percent of the country's tourist arrivals are from European countries. In Europe, Tanzania largely receives tourists from France, Spain, Britain, Germany, Switzerland, Russia and the Netherlands while other tourists are mainly from the US, India and Australia.
Most of the source countries have been, and some are still, on travel restrictions as the Covid-19 still exists. With what the government termed as a massive drop in Covid-19 cases in May, Tanzania reopened its sky to allow business, humanitarian, diplomatic, emergency and other special flights to land, take off and fly across the country's skies as it was before.
The ministry of Natural Resources and Tourism launched Standard Operating Procedures (SOPs) that align with the WHO's health guidelines for both guests and staff in the tourism business operations. During the launch then minister for tourism Hamisi Kigwangalla said the sector was key economic activity generating more than 25 percent of the total export earnings.
"The sector supports nearly 1.6 million direct and indirect jobs. We are ready to go back to business," he said. Presenting the budget for the ministry of Natural Resources and Tourism in Parliament in May, Dr Kigwangalla said the devastating impact of Covid-19 on the tourism industry would see at least 477,000 jobs being lost and revenues dropping by 77 per cent if the pandemic was to persist beyond October this year.
Dr Kigwangalla told the House that the number of people losing jobs represents 76 per cent of the total direct employment in the sub-sector, averaging 623,000 people. He revealed that earnings from tourism would also decrease from $2.6 billion (about Sh6 trillion) projected earlier to $598 million (Sh1.4 trillion), a whopping 77 percent decline.
