Tourism set to be major contributor to Namibian economy

The Namibian hospitality industry is projected to inject N$26.4 billion (€1.78bn) into the country’s economy by 2020, through tourism and other related value-added activities and services within the industry. The amount would be equal to 12% of Namibia’s overall GDP and the hospitality industry is projected to create 123 000 job opportunities.

Minister of Environment and Tourism, Pohamba Shifeta, recently presented the figures on the outlook of the tourism industry during the launch of the fifth Tourism Satellite Account (TSA). Shifeta said the forecasts were consistent with the projected increases in foreign tourist arrivals. The number of tourists are expected to jump from 1.39 million in 2015 to more than 1.7 million in 2020.

He said the TSA was significant because it met a long-standing need of industry and government for an official, credible measure of the contribution tourism made to the national economy. The TSA fifth edition is based on data that is three years old.

“Let’s face it – it’s difficult to measure the contribution of the tourism industry to the national economy,” he said. “There are no products crossing national borders, and we cannot follow tourists around the country and monitor every cent they spend. However, this data reinforces what we already know, and that is the importance of tourism to Namibia.”

Currently, the TSA is based on the World Travel and Tourism Council (WTTC) methodology, and was initiated by the Namibia Tourism Board. Shifeta explained that the TSA allowed government to extract meaningful information about the tourism industry, as it aggregated total tourism activity. He added that it would enable the ministry to better understand the dynamic of tourism in the economy and allow for better planning.

According to Shifeta, it will ensure that public and private sector decision-making, particularly in the key areas of research and investment, are better informed.

“The TSA forms part of a much broader programme to improve the information base of the tourism sector. One such improvement that has already culminated from it is that the calculations now reflect the recent migration of Namibia’s balance of payments (BOP) statistics to the latest compilation manual on the International Monetary Fund. The IMF then introduced a number of changes to the service account data – including travel spending and transportation – used in the TSA dating back to 2009.”

Previously, the estimation of the travel component in the BOP relied primarily on real sector indicators such as tourist arrivals and bed occupancy. With the BOP migration, the data sources were expanded to include the transactions reported by the local banks on non-residents as well as service payments made by the government.

Shifeta noted that because of these methodological and data changes, the TSA results from 2009 onward were not comparable with estimates made previously. This was validated by the Bank of Namibia and the National Statistics Agency.

Source: tourismupdate.co.za