Publication - Project Report, Working Paper
Tourism is generally considered to be the largest industry in the world. It is the third-largest export sector and one of the most promising in terms of future growth potential. As people’s income and education rise, demand for travel will steadily rise, both domestically and internationally. Past performance confirms this positive outlook, notably for international tourism, which is of particular interest for African countries such as Uganda. International arrivals have risen every year since 2010 at an average rate of 7% per year. Arrivals in Africa were even stronger, rising by 9% per year since 2010, making it the best performing region in the world.
Tourism also promises relatively robust prices, with little fluctuation compared to the commodities on which most African countries depend. In fact, prices are likely to rise over time as the supply of tourism destinations rises more slowly than demand, which in most cases remains fixed. The number of iconic tourist attractions (Eiffel Tower, Venice, Taj Mahal) is virtually fixed. And, for all practical purposes, so are the number of African game parks.
There are several other factors in favour of tourism. It is relatively labour-intensive, offering a range of low and high-skilled jobs. Furthermore, these jobs are often in less-developed and rural areas of the country, whereas most other modern sector jobs tend to congregate in the major cities. And critically, many African countries have an absolute advantage in tourism, notably in the areas of safaris and African cultural and historical heritage.
The purpose of this paper is to identify ways in which the government can stimulate tourism as one driver of higher growth in Uganda. To do this the paper will: