Invisible

– but vital –

infrastructure

Hard and soft infrastructure are unique selling propositions in the bid to lure tourists

Most countries use their natural assets to lure tourists – waterfalls, coastlines, wildlife, historical ruins and so on. These are key differentiators in the highly competitive world of global tourism.

However, what really sets countries apart, especially those that do not have a unique offering, is the quality of the hard and soft infrastructure that supports those assets. This includes ICT, financial services, medical service support, transport connections, as well as the quality of roads, border posts and airports, right down to the quality of the food and hygiene.

Tourism may be categorised as a sector, but it is a cross-cutting industry and considerations of policy and investment need to reflect the wide nature of its application. It also requires a recognition that natural assets are just one of the factors that tourists consider when making choices, particularly given the range of options that they have.

Protecting a national airline to the detriment of offering the widest possible choice of airlines to tourists and prioritising once-off visa revenue over the much higher potential spending by visitors are examples of the challenges that the sector faces in Africa.

Tourism is the lifeblood of many African countries, particularly in East and Southern Africa and the Indian Ocean islands. Estimates are that the sector contributes about 7% of continental GDP (pre-COVID-19 estimates), with more than a dozen countries reliant on tourism for revenues and foreign exchange.

Source countries for African tourism destinations tend to be developed country markets, such as the UK, other European countries and the US, as well as, increasingly, China and other parts of Asia. This can lead to the pricing of facilities in a way that excludes most locals, and it raises the bar in terms of what the expectations of tourists are in terms of basic infrastructure.

Benchmarking competitiveness

The bi-annual World Economic Forum (WEF) Travel and Tourism Competitiveness Report (T & T), which benchmarks the competitiveness of 140 economies globally, measures the factors and policies that enable the sustainable development of tourism. These policies are not unique to tourism, but also contribute to the development and competitiveness of a country.

Sub-Saharan Africa’s travel and tourism market is small. The WEF said that African countries covered by its report in 2017 had 37.4 million tourist arrivals that year, only 3% of the global total. Many of these travellers visit countries for business rather than purely for the purposes of tourist and leisure activities, but are included in the statistics.

Sub-Saharan Africa below par

The WEF report’s findings are instructive in terms of what countries should focus on, particularly in sub-Saharan Africa, which is ranked at the bottom of the WEF’s Travel and Tourism Competitiveness Index, lagging the rest of the world across all pillars. Only Mauritius, South Africa and Seychelles score above the global average on the index.

The regional gap is accounted for by factors such as unfavourable business environments, health and hygiene concerns, low ICT readiness and severely underdeveloped infrastructure. A lack of international openness and poor regional connections also feature.

Price competitiveness is another issue. Flight costs are some of the highest in the world relative to distance because of taxes and airport charges imposed by governments, which exacerbate the high-cost operating environment that is generally present in Africa.

Visas are another issue. The move to e-visas is slow and many of the processes are old-school. Improvements in this area can make a real difference to a country’s attractiveness – and rankings. Simply by reducing visa requirements and introducing e-visas, the West African country Benin changed its rankings in this pillar from 122 to 7 globally on the WEF Index.

Safety and security are also a challenge that can deter tourists, particularly for South Africa, which has one of the worst security environments in the world – ranked 132nd out of 140 countries in the WEF report. Combined with poor health and hygiene conditions (113th), the security situation diminishes South Africa’s attractiveness for visitors and investors alike, it says.

These challenges make sub-Saharan Africa less likely to attract visitors and travel and tourism investors despite its appealing natural assets.

Despite the challenges outlined above, before COVID-19, sub-Saharan Africa outpaced the global average in the growth of international tourism and receipts. The World Travel and Tourism Council forecast in 2019 that African countries could, by investing more in the sector and associated infrastructure, have the second highest rate of growth in the sector’s GDP in the 10 years from 2019 to 2029. This may have changed with the hard impact of COVID-19 on tourism, but does suggest the future potential of the sector for Africa.

Africa undoubtedly has a wealth of natural resources to attract tourists. But this is not enough. Tourism has been one of the hardest-hit sectors by global lockdowns, but the rebuilding phase allows policy-makers and operators to see how they can become more competitive as markets start opening. Tourists are likely to be even more selective for some time about where they go.

Continue reading: Partnering for growth

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