Govt’s tourism growth projections unrealistic

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FINANCE and Economic Development minister Mthuli Ncube

THERE is no doubt that the worst affected sector by the COVID-19 pandemic is the tourism and hospitality industry.

It was laughable that Finance minister Mthuli Ncube made a shocking prediction last week during presentation of the 2021 mid-term budget review statement that the sector is projected to grow by 6,4% this year.

The absurdity of it is that this is all going to depend on domestic tourism.

Had the sector not been disturbed by successive lockdowns and foreign currency distortions that led the country to be the “most expensive tourism destination” regionally, Ncube’s projection would probably ring true.

However, the reality is quite the opposite. That is because of two reasons.

Firstly, Zimbabwe’s main source of tourism revenue comes from foreign trips into the country while domestic tourism’s contribution has been depressed for years, only picking up in 2018. Secondly, Zimbabwe’s poverty rate is rising rapidly, with about 50% of the population in extreme poverty. So tourism is a luxury that they cannot afford.

The other reason can be found in tourism earnings. While foreign receipts were estimated at US$868 million, domestic tourism receipts were estimated at US$379 million in 2019, according to the Zimbabwe Tourism Authority (ZTA) statistics. That means domestic tourism only contributed 30,39% to the sector.

Looking at last year’s figures, ZTA reported that the sector generated US$359 million from 2019’s US$1,24 billion, a staggering decline of nearly US$890 million. And while the ZTA doesn’t break down domestic and foreign receipts, an indication of how depressed local tourism was can be seen from the 63% drop in domestic travel to 222 372 trips from 2019’s 601 537.

Thus, to register a positive growth for the year, the tourism industry should first recover losses and register growth which is almost impossible.

On top of this, monthly wages in the public and private sectors are averaging $18 000 and $30 000 respectively, while the poverty datum line is just over $40 000. Thus, very few can afford to spend money on luxury.

To say domestic tourism will drive growth in the sector is disingenuous of the government.

That is because domestic tourism has to factor in wage erosion caused by inflation, rising cost of living, currency distortions, and COVID-19 waves which lead to lockdowns and reduced movement.

Government must not forget that COVID-19 is another challenge to socio-economic development which the country is grappling with. The onus is on the authorities to stop growing the economy on paper and start addressing real issues to breathe life into the economy. Only then, can real growth be witnessed in the different sectors of the economy including tourism.