The economic impacts of tourism in Botswana, Namibia and South Africa: Is poverty subsiding?

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  • The economic impacts of tourism in Botswana, Namibia andSouth Africa: Is poverty subsiding?

    Edwin Muchapondwa and Jesper Stage

    Abstract

    Tourism in southern Africa is based on the regions wildlife and nature assets and is generally environmentally sustainable,but the extent to which it contributes to other aspects of sustainable development overall income generation or povertyeradication is less well explored. In this paper, we use social accounting matrices to compare the economic impacts offoreign tourism in Botswana, Namibia and South Africa. Overall impacts on GDP range from 6% (South Africa) to 9%(Namibia). However, South Africas economy is more diversified than its neighbours and more of the goods and services usedby tourists and by the tourism industry are supplied domestically. Consequently, the impact per Rand spent is considerablylarger for South Africa than for Botswana or Namibia. The poorer segments of the population appear to receive shares oftourism income that are smaller than their share of overall income in all three countries.

    Keywords: Tourism; multiplier effects; Botswana; Namibia; South Africa; poverty reduction.

    1. Introduction1

    Over the past six decades, tourism has become one of thelargest and fastest growing economic sectors in the world.The number of international tourist arrivals has continuedto grow. The 25 million recorded in 1950 jumped to 277million in 1980, 438 million in 1990, 684 million in 2000,and an estimated 990 million in 2011. International touristarrivals are forecasted to reach nearly 1.6 billion worldwideby 2020. More importantly, the share of international touristarrivals received by developing countries has grown from31% in 1990 to 47% in 2011.

    International tourist arrivals in Africa grew by an averageof 12% annually from 2000 to 2011, totalling an estimated50 million. The African share in the world tourism marketin 2011 was only 5%, and Africas international touristarrivals are currently concentrated in relatively fewdestinations. Only Algeria, Botswana, Kenya, Morocco,Mozambique, Nigeria, South Africa, Tunisia and Zimbabwehave received over 1 million arrivals per year in the last few

    years, together attracting at least 66% of 2009 internationalarrivals to Africa.2 It is forecast that Africas tourist arrivalswill reach 77 million by 2020. International tourismreceipts by Africa amounted to US$ 32.6 billion, whichaccounted for 3.2% of total world tourism earnings in 2011.

    These statistics indicate the ever-growing significance ofthe tourism sector in most developing economies. Tourismhas become a key driver of socioeconomic progress throughthe export income earned, infrastructure development, andthe creation of jobs and enterprises (Saarinen et al., 2009).For many developing countries, tourism is one of the mainsources of income and the leading export category. Roeet al. (2004) find it to be the principal foreign exchangeearner for about 83% of developing countries. Tourism canalso contribute to the development of other economicsectors such as transport and construction. In addition,the tourism sector presents a comparative advantage todeveloping countries as it is built around natural resourcesand has labour-intensive characteristics (Spenceley andMeyer, 2012).

    The prospect of tourism growth in developing countrieshas created enormous attention in tourism as a toolfor poverty alleviation. In fact, a number ofinstitutional stakeholders, like the United Nations World

    Edwin Muchapondwa is at the School of Economics, University of CapeTown, South Africa. E-mail: edwin.muchapondwa@uct.ac.zaJesper Stage is at the Department of Social Sciences, Mid SwedenUniversity, Sweden. E-mail: jesper.stage@miun.se1 The statistics and forecasts cited in this section are drawn from UNWTO(2009; 2010a; 2010b; 2011a; 2011b; 2012a; 2012b) unless otherwisestated.

    2 Note that Egypt also receives well over a million arrivals per year but itis classified by the UNWTO under Middle East.

    Natural Resources Forum 37 (2013) 8089

    2013 The Authors. Natural Resources Forum 2013 United Nations

  • Tourism Organization, Governments and developmentorganizations, regard tourism as a major driver of povertyalleviation (Hall, 2007; Spenceley and Meyer, 2012). Onthe flipside, Tosun (2001) argues that tourism should reducepoverty in local destinations, inter alia, for it to besustainable. In fact, there is a huge amount of literatureadvocating for pro-poor tourism (e.g., Ashley et al., 2001;Cattarinich, 2001; Mahony and Van Zyl, 2001; Nicanor,2001; Ashley, 2002; 2006; Spenceley and Seif, 2003;Saarinen et al., 2009).3 Ultimately, the desirability oftourism as a sustainable development mechanism will bejudged based on the extent to which it helps the poorparticipate in the national economy and pulls them out ofpoverty. Whether it actually has this impact at present is anopen question. Spenceley and Meyer (2012) outline some ofthe theoretical discussions and findings from practitionersthat have emerged on tourism and poverty reduction duringthe past two decades. For example, works by Goodwin(2006), Dixey (2008) and Spenceley (2008) paint apessimistic picture of tourism as a potential tool for povertyreduction. Furthermore, Blake (2008) finds that althoughlinkages from tourism to the domestic economy arerelatively important in three studied East African countries(Kenya, Tanzania and Uganda), the share of income fromtourism accruing to the poor is in fact smaller than thepoors overall share of national income.

    If the desirability of tourism will ultimately be judged onthe extent to which it helps the poor participate in thenational economy and pull them out of poverty, it isnecessary to know the economic significance of tourism tothe national economy and craft the tourism policy in such away as to promote tourisms contribution to the nationaleconomy. Visitor expenditure on accommodation, foodand drink, local transport, entertainment and shoppingis an important variable which could be influenced to createthe much-needed employment and opportunities fordevelopment in Africa. In the absence of concrete policymeasures, the income generated by this expenditure maywell contribute mainly to increased incomes for the affluent,or for foreign tourism operators, rather than for the poorersegments of the population.

    Wildlife and nature-based tourism has been identifiedas a possible key sector for the achievement of sharedeconomic growth and poverty alleviation in Africa(Mitchell and Ashley, 2006; World Bank, 2006). This paperseeks to make a contribution to research on tourism inAfrica with particular emphasis on three southern Africancountries, namely Botswana, Namibia and South Africa.These three neighbours have tourism sectors dominated bywildlife and nature tourism. They also have reasonably gooddata sets on tourism, and in all three countries high hopesare attached to tourism as a driver for poverty alleviation.

    The paper investigates the contribution of tourism to thispoverty alleviation, and on the overall national economiesof these three countries, by studying the direct and indirecteffects of tourism on income generation and incomedistribution using multiplier analysis. In addition tocomparing the effects per tourist on each economy, thepaper discusses the implications of these effects for tourismpolicy in the different countries.

    2. Background on the three southern Africancountries under study

    2.1. Botswana

    Botswana is a semi-arid country with a total land area of582,000 km2 and a population density of 2.7 per km2

    (Atlhopheng and Mulale, 2009; Moswete et al., 2009).Temperatures are very high and rainfall is low and erratic.Only 5% of the total land surface area is arable. Thepopulation, which is characterized as being low-density, isestimated at 1.85 million, with a rate of growth of 3.5% perannum. The majority of the inhabitants live in rural areas.Some 80% are concentrated in the fertile eastern region ofthe country, where they subsist on pastoralism and cropagriculture (Central Statistics Office, 2008; Moswete et al.,2008). In 2003, the overall incidence of poverty inBotswana was 30%, while rural poverty for the same periodwas estimated at 45% (Moepeng, 2007).

    Botswana is endowed with bountiful and diverse wildliferesources with the potential to contribute to the growth anddiversification of the economy. The wildlife resourcesoccupy 37% of the total land area, of which 17% is nationalparks and game reserves and 20% is wildlife managementareas (Atlhopheng and Mulale, 2009). Most populations ofwildlife species were recorded as stable during the period1989-2007, which reflects efforts to conserve this naturalresource (Central Statistics Office, 2008). BotswanasNational Development Plan 9 recognizes wildlife as one ofthe main valuable natural resources together with mineralsand rangeland, and as the principal tourist attraction(Atlhopheng and Mulale, 2009).

    Tourism is based on wildlife and wilderness resourcesthat are strictly controlled (Moswete, et al., 2009). Thetourism attractions in Botswana are mainly to the north,around the Okavango Delta (Atlhopheng and Mulale, 2009;Mbaiwa and Darkoh, 2009; Moswete et al., 2009). Someof the popular protected areas that have experiencedsubstantial increases in visitations are the KgalagadiTransfrontier Park, Central Kgalagadi Game Reserve,Chobe National Park, Moremi Game Reserve andMakgadikgadi National Park (Moswete et al., 2009). Thegovernment is committed to nature-based tourism and hasinvested in wildlife conservation and associated tourisminitiatives. The countrys policy emphasizes low-impactand high-value tourism. Rather than promoting enclave

    3 Pro-poor tourism is broadly defined as tourism that generates net benefitsfor the poor (Ashley et al., 2001).

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    2013 The Authors. Natural Resources Forum 2013 United Nations

  • tourism,4 the policy attempts to encourage and supportindustry that benefits local communities (Moswete et al.,2008; WTTC, 2007). Thus, income impacts and povertyreduction impacts are stated targets of tourism policy.However, Botswana is heavily dependent on intraregionaltourists and largely remains a secret to their long-haulcounterparts; long-distance international tourists tend tospend more money, but also frequently pursue moreenclave-style tourism of the type that Botswana wishes toavoid. Overall impacts on income generation and incomedistribution therefore may be different from those of themore long-distance tourism seen in the other two countries.

    2.2. Namibia

    Namibia is situated in south-western Africa. It is a large andmainly arid country that borders not only the AtlanticOcean, but also Angola, Botswana and South Africa. Thecountry has a land surface area of about 824,000 km2. Thelandscape is mainly dominated by the shifting sand dunes ofthe Namib Desert. In the interior, the escarpment of a north-south plateau slopes away to the east and north into the vastinterior sand basin of the Kalahari. Other than a few malariaareas, there are relatively few health concerns needingtravel prerequisites that might discourage tourists. In 2005,the countrys population was estimated at 2 million.Mining, fishing, tourism and agriculture are the pillars ofthe Namibian economy (Karemaker and Whitehead, 2007).In 2003/2004, 38% of the population was below the povertyline, while the same statistic was 49% for the ruralpopulation (Schmidt, 2009).

    Tourism in Namibia has a history of being developedaround state-owned resorts in protected areas. The producthas predominantly been of a self-catering nature, mainly fornational and regional travellers. Today, tourism is becomingan increasingly vital component of livelihood strategies forfarmers on both communal and private land. Tourism atso-called guest farms has been a popular activity since the1960s, and starting in the late 1990s residents of communalareas were able to organize themselves into communalconservancies to reap benefits from wildlife tourism(Republic of Namibia, 2001; Samuelsson and Stage, 2007).

    Namibian tourism policy aims to guarantee that tourismserves as a vehicle for securing definite social gains for thepopulation, particularly the poorer segments of thepopulation, while simultaneously avoiding and minimizingas far as possible the negative aspects of tourismdevelopment activities (Republic of Namibia, 2001). It aimsto, inter alia, ensure that all sections of the Namibian

    community benefit from tourism, and encourage thedevelopment of those cultural forms and expressions whichare distinctly Namibian in origin and their development intonew attractions. In Namibia, too, there is a goal of ensuringthat the income benefits from tourism are widely diffusedthroughout the population and that tourism shouldcontribute to overall development.

    2.3. South Africa

    South Africa has scenery that spans from mountain rangesto vast grass plains, from coastline to meandering rivers anddesert dunes. The countrys diverse climates range fromtropical in the south-east to desert in the central region.Being at the southern tip of a large continent, South Africaoffers 3,000 km of coastline. The countrys diverse terrainand wide range of possible recreational activities hasfostered a diverse tourism industry catering to an array ofdifferent tourism niches supported by numerous specializedoperators.

    The countrys wildlife is far more varied than thecelebrated Big Five, and is supported by an extraordinarybiological diversity. The countrys national parks including the world-famous Kruger National Park havebeen enlarged, and the Government is committed toincreasing the total terrestrial and marine protected areasfurther. The countrys private game lodges have also grownsubstantially in number and scope since 2000, withstandards from middle to very upmarket, including ultra-luxury lodges catering almost exclusively to foreigntourists. Community-managed nature and wildlife tourismis less well established than in the other two countries.

    Tourism has the potential to act as a catalyst for othersectors of the economy. These include the agriculture sector,which benefits from increased demand for new agriculturalproducts and services such as organic agriculture and farmtourism; the manufacturing sector, which benefits from thesupply of furniture and fittings, construction, linens, pots,pans, etc.; and the fine art and crafts sector, which producesitems such as woodworking and curios.

    The tourism sector has been identified as vital to ensuringthat the country achieves the goals set out in the Acceleratedand Shared Growth Initiative for South Africa, which aimsto halve unemployment and poverty in the country by 2014(Republic of South Africa, 2007). At present, however, poorinvolvement of local communities and previously neglectedgroups in the industry is seen as a major problem facing theindustry. This would have to change in order for SouthAfrica to deal effectively with...

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