The Impact of Tourism Development on Economic Growth in Sub-Saharan Africa

Abstract

This study examines the dynamic impact of tourism development on economic growth in sub-Saharan Africa (SSA) using the Generalised Method of Moments and data covering the period from 2002 to 2018. The increasingly important role of tourism and the limelight the tourism sector has been enjoying of late, on the one hand, and the lack of sufficient coverage of tourism-growth nexus studies in Africa in general and in SSA in particular, motivated this study. Unlike most of the known panel data-based studies on tourism development and economic growth, this study has split the sub-Saharan African countries into low-income and middle-income sub-Saharan African countries. The results of the study show that tourism expenditure negatively affects economic growth while tourism receipts have the opposite effect in SSA. The findings are robust to the low-income sub-sample while only the effect of tourism expenditure is robust in the middle-income sub-sample.

Tourism management for financial access in Sub-Saharan Africa: inequality thresholds

“…The outcome variable from the FDSD is domestic credit to the private sector by banks (% of GDP) and is consistent with recent African-centric financial development literature (Tchamyou, 2019;Odhiambo, 2020). The tourism variables are from WDI of the World Bank and in accordance with contemporary tourism literature (Nyasha et al, 2020;Asongu, Nnanna, Biekpe & Acha-Anyi, 2019), are tourism receipts (% of exports) and tourists' arrivals (in millions). The inequality variables are sourced from the GCIP, namely: the Gini coefficient, the Atkinson index and the Palma ratio.…”

“…Accordingly, the arrival of tourists and/or funds related to tourism receipts are associated with more financial intermediary activities owing to inter alia: (i) an increase in financial depth due to potentially more usage of domestic currency and (ii) higher deposits in banks and by extension, more private domestic credit associated with the underlying deposits, contingent on the tourism receipts being deposited in financial institutions. On the other hand, inequality can affect tourism because, inter alia: tourism is associated with poverty (Folarin & Adeniyi, 2020) and other inclusive development outcomes (World Bank, 2011;UNEP, 2011;Nyasha, Odhiambo & Asongu, 2020) in both developed and developing countries (WTTC, 2020;IDC, 2018;UNCTAD, 2013). Accordingly, as substantiated by UNCTAD (2013), tourism is linked to inequality because tourism is also associated with the promotion of economic and human outcomes of development that are more apparent in situations when tourism related policy initiatives are inclusive.…”

A Review of the Economic, Social and Environmental Impacts of Tourism Development

“…The author found no causality between tourism and economic growth in Africa in contrast to result recorded for Asia and European countries [4]. In contrast, using nearly two decades data, a recent study has shown that tourism receipt positively impacted economic growth in Sub-Saharan Africa [32]. Tourism contribute to the balance of payment which is an important strategy to spur economic growth especially in developing countries [30].…”

Do countries’ geographical locations moderate the tourism-led economic growth nexus in sub-Saharan Africa?

“…These global statistics and theoretical projections about the potential benefits of tourism to countries within the SSA region are supported by some sparse studies that have attempted to show tourism's positive effect on economic growth in Africa and its subregions (see e.g. Fayissa et al, 2008;Nyasha et al, 2020).…”