Tuesday, 2 March 2010

Minister: Tourism Accounts for 80% of Zanzibar Revenue

Tourism in Zanzibar is a Sh163 billion industry and employs 10,500 people.

It is an indirect source of income for another 40,000 Zanzibaris, the minister of State in the President's Office (Finance and Economy), Dr Mwinyihaji Makame Mwadini, said.

He told The Citizen that the sector accounted for 80 per cent of government revenue. He attributed its increasing contribution to the national development to reforms adopted in the mid-1980s.

"The sector contributes about 22 per cent of GDP and about 80 per cent in government revenue. The overall growth of the sector, estimated at 9-10 per cent, has outpaced that of agriculture. But like most sectors of the economy, tourism has recently been affected by the global crisis," he said.

He believes that more jobs would have been created and household incomes boosted had it not been for the negative impact of the global recession in 2008. Zanzibar had a gross domestic product (GDP) of Sh738.7 billion in 2008.

The global recession cut the GDP growth rate to 5.4 per cent in the year from 6.3 per cent in 2007. The crisis also raised the cost of living to 20.6 per cent from 13.1 per cent during the same period as food became scarce and prices escalated.

The downturn also affected government revenues, capital inflows and export earnings but donors did not cut aid, which accounts for over 40 per cent of the government budget. However, he is optimistic that the industry will improve this year following signs of recovery in the second half of last year.

Members of the Zanzibar Association of Tourism Investors (Zati) are cautious that the rebound is not guaranteed. The Zanzibar Commission of Tourism (ZTC) reported that the number of tourists fell to 128,440 visitors in 2008 from 148, 283 the previous year.

However, a Zati report showed that the number of tourists increased to 97,711 in the first nine months of 2009 from 94,430 in the similar period the previous year.

"The global financial crisis made 2009 a bit difficult for Zanzibar's tourism and prospects for this year are clouded by the power problem," Zati chairman Simai Mohamed told The Citizen on the sidelines of the association's 2010 dinner party.

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