African markets set to receive Sh4.5 trillion from foreign visitors in 2017

African markets set to receive Sh4.5 trillion from foreign visitors in 2017

Tourists visiting African markets are projected to contribute Sh4.5 trillion to the continent’s economy in 2017, a new report by Jumia Travel has revealed.

The hospitality and tourism industry is an important sector for many developing countries, since it is one of the main foreign exchange earners and key exports component.

In 2016, foreign visitors to Africa reached 58 million with a spending of $40.7 billion (Sh4.2 trillion) and projected to reach $42.9 billion (Sh4.5 trillion) by end of 2017. These statistics by Jumia Travel’s Hospitality Report Africa, reflect the sector’s extensive significance both in terms of social and economic growth.

“The ripple effect tourism’s advancement has created is largely noticeable, especially in its contribution to the continent’s economy. 2016 saw a 7.8% (USD 165.6bn) contribution to the GDP, with an expected rise to 7.9 per cent ($170.5 billion or Sh17.7 trillion) in 2017. With it comes the aspect of alleviating unemployment, as the industry now indirectly employs 1 out of 20 people,” explains Jumia’s Josephine Wawira.

The United Nations Conference on Trade and Development’s (UNCTAD’s) Economic Development in Africa Report 2017: Tourism for Transformative and Inclusive Growth, identifies the scale of involvement of women in African tourism as significant in line with global trends.

In the report, “Global figures suggest that women make up approximately half of all jobs in the hotels and restaurants sector (UNWTO and UN Women, 2011). This trend is replicated in Africa as about 47 per cent of hotel and restaurant employees are women, with Mali reporting the highest female participation of all 172 countries surveyed by UNWTO, as women account for 82 per cent of all hotel and restaurant employment”.

Wawira explains that the growing uptake of internet has also enabled the rise of tech startups aimed at working to overcome the challenges of e-commerce in Africa. Currently, there are approximately 345 million internet users in Africa, representing 9.3 per cent of the total population and penetration rate of 27.7 per cent. In the same line, mobile technologies and services generated 6.7 per cent of GDP in Africa in 2015 and is expected increase to more than 7.6 per cent of GDP ($210 billion or Sh21.8 trillion) by 2020.

“However, more impressive performance can be achieved if more players in the tourism and hospitality sector embrace and encourage the adoption of mobile technologies in their businesses,” said Wawira.

For Instance, only 6 per cent of Jumia Travel customers pay for their bookings through mobile payment in Africa, evidence of a highly untapped potential. Yet, countries such as Kenya where a higher population is mobile, payments through MPesa stand at approximately 32 per cent.

“All factors considered, one can hardly dispute the relevance of the hospitality and tourism sector to the African market. Its especially resilient nature is incontestable in the face of challenges including slow infrastructural advancement, terrorism threats and political instability in some African countries leading to travel bans, increasing competition from emerging global tourist destinations, as well as Visa restrictions between African countries among others,” Wawira added.

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