The World Bank has advised the Ugandan government to change its strategy in promoting tourism to create more jobs and increase its earnings.
“For Uganda to harness the full potential of its tourism sector and abundant assets to support inclusive growth and diversification, the government must develop and apply a more strategic and well-funded approach with a clear value proposition for tourists and sector participants,” said the World Bank.
The World Bank said the tourism sector is not promoted strategically, and the country’s undifferentiated product offering means it is constantly playing catch up to better- known and more developed regional destinations such as Kenya and Tanzania.
“For Uganda to harness the potential of its tourism sector to support inclusive growth and diversification, the government must develop and apply a more strategic approach with a clear value proposition,” said the financial institution in its June 2023 report on Leveraging Sustainable Tourism to Support Growth & Diversification.
The Bank said Uganda’s new approach should be “designed to increase both tourism arrivals, average spending, and repeat visitation. Although wildlife and nature will remain central to Uganda’s value proposition, broadening and diversifying its tourism products will be crucial to maximise the sector’s impact on employment and growth.”
Uganda receives hundreds of thousands of visitors annually, with tourism bringing in valuable foreign exchange earnings, stimulating demand for skilled and unskilled workers and driving inclusive economic growth across communities.
Currently, tourists are drawn by the country’s abundant natural and cultural assets ranging from the world’s largest population of mountain gorillas to rare bird species and thriving local cultures and arts.
Agrotourism
However, the World Bank said, “There is considerable untapped potential for agrotourism in coffee and tea estates, and cultural tourism by capitalising on local art, food, sports, and other aspects of Uganda’s rich cultural diversity.”
In the World Economic Forum’s 2019 Report on Travel and Tourism Competitiveness, Uganda ranked among Sub-Saharan Africa’s top five destinations for cultural resources and business travel.
Even as tourism is one of the country’s top foreign- exchange earners and a significant job creator, the sector lags behind its regional peers, remains very sensitive to shocks, and budget allocations for the sector are being reduced which is likely to further compromise its ability to fulfil potential.
Prior to the COVID-19 pandemic, which drastically curtailed global travel, the sector contributed about 6 percent of Uganda’s GDP, far below the levels of Rwanda (11 percent), Tanzania (10 percent), and Kenya (8 percent).
Nevertheless, travel receipts totaling US$1.4 billion accounted for half of the service inflows (25 percent of total export receipts).
Over 670,000 workers were directly employed in the sector, or about 7.4 percent of the labour force, although the World Bank said this could more than double according to estimates by the Uganda Bureau of Statistics (at 14.7 percent and more than 1.5 million Ugandans employed in the sector.
“As tourism recovers from the pandemic, during which its contribution fell to just 2.7 percent of GDP in 2020, Uganda’s abundant natural and cultural assets can be harnessed to create new jobs, stimulate business growth, and boost foreign-exchange earnings,” said the World Bank.
Lack of creativity
Moses Tusiime, a tour and travel operator, says the Ugandan government “has completely failed on promotion of tourism because it seems to focus on promoting only national parks yet we have a lot to offer including a vibrant nightlife and cultural events.”
Moses Wekesa, an experienced tour and travel agent, has been asking the government to be more aggressive and creative in promoting Uganda’s tourism.
The World Bank also cautioned that Uganda’s tourism industry remains highly sensitive to shocks, including disease outbreaks like “Ebola, travel bans on Uganda imposed by major source countries, and even domestic developments like the passing of the Anti-Homosexuality Act and terrorist attacks.”
Yet, international experience highlights the tourism sector’s economic potential: in a survey of 49 countries, a 1 percentage-point increase in tourism spending resulted in a 4.5 percent increase in GDP per capita.
However, the World Bank said the full potential of the sector cannot be realised if budgetary allocations are inconsistent, poorly allocated and continue to be reduced annually.
The World Bank’s tourism ecosystem approach and an innovative social media analysis reveal several key challenges that Ugandan policymakers must address to fully realise the sector’s potential.
Unknown
The World Bank said despite significant investment in traditional marketing approaches, Uganda remains relatively unknown to global tourists as seen by the country’s low ranking in general travel-related searches even as it is more competitive in the niche segments like hiking and ecotourism.
On a positive note, interest in cultural sightseeing tours has increased significantly since before COVID-19 and source markets like the US, UK and Canada show an increasing interest in arts and cultural tourism, although interest in national parks has dwindled.
“Despite acknowledging tourism’s potential in the national vision, the institutional and policy environment is highly fragmented and duplicative, which hinders the implementation of tourism development strategies and plans,” said the World Bank.
“Furthermore, the public resources allocated to directly support tourism are insufficient and continue to dwindle, though some aspects of tourism development may be funded through other sectors like infrastructure (however, in the absence of strong intersectoral collaboration it is difficult to ascertain whether and to what extent this is happening),” it added.
“The business environment is not always conducive to private investment, and important challenges include a complex sector licensing regime, limited access to finance for micro, small and medium enterprises, and gaps in digital connectivity and other essential infrastructure. Inadequate coordination between the public and private sector hinders FDI, which remains focused on large hotels and lodges.”