TANZANIA: How Sh90 billion for tourism revival split key players

Serengeti Wildebeest Migratioin /Tanzania Tourism Board

Arusha, Tanzania – Nearly $39.2 million (about Sh90 billion) of funds allocated by the government to mitigate the adverse impact of the Covid-19 pandemic on the travel and tourism industry has starkly divided key stakeholders over priority investment areas.

The funds are part of the $567.25 million loan approved in September by the International Monetary Fund (IMF) to support Tanzania in responding to the pandemic by addressing health, humanitarian, and economic effects.

While the Ministry of Natural Resources and Tourism has allocated the lion’s share of the money to repair hard infrastructure, and procure new soft infrastructures, private players have faulted this, saying it wouldn’t yield the envisaged outcomes.

A fortnight ago, the Minister for Natural Resources and Tourism, Dr Damas Ndumbaro, issued a statement highlighting a number of projects where the money would be invested in to revive the tourism industry hobbled by the Covid-19 pandemic.

Dr Ndumbaro said projects to be implemented include renovation of infrastructures, installation of security systems and purchase of mobile test kits for testing Covid-19 infections among tourists.

“These projects will simplify access to different tourist attractions, rollout of new tourism products to diversify tourism activities to capture the emerging tourist market and subsequently revive the tourism industry,” Dr Ndumbaro noted in a statement.

However, the key players in tourism are not in favour of the proposed expenditure of the funds meant to support the industry recovery to hard and soft infrastructures, saying the government should instead use the money as a stimulus package to achieve quick recovery.

The 300-plus-member Tanzania Association of Tour Operators (Tato) says the funds should be used to subsidise national parks entry fees for travellers, cheap loans to tour companies to be able to revive the industry in order to spur other businesses, recover thousands of lost jobs and generate revenues for the economy.

“The funds should be issued to private sector investors to get restructuring loans at long term low interest rates specifically for renovations and new investments.

“This will revive the industry faster than infrastructure could do,” reads the Tato statement signed by its chairman, Mr Willbard Chambulo.

Tato proposed that a portion of money could also be used to reduce VAT on tourism, more funds to a state-run marketing agency, Tanzania Tourists Board (TTB) to be able to promote the destination efficiently to keep the critical industry ticking over in the face of cutthroat competition, among the peers.

“As Tato Chairman, I want to thank Madam President Hassan for securing the loan and allocating $39.2 million for tourism recovery. We propose that the Ministry should issue loans to us to be able to get back to where we were before Covid-19, get our employees back to work, revamp tourist lodges and tented camps, vehicles and support anti-poaching drives, while we are recovering slowly” he explained.

“We will get back to business again, and this IMF loan must be paid back by us, or by our children and grandchildren. The loan has to be injected into business to generate profits, create employment and pay taxes,” Mr Chambulo argued.

He also quoted President Hassan as saying that the ministry and other tourism stakeholders should sit together and agree on the priority areas where the money should be invested to spur the industry back to life.

“What I recall is that President Samia Suluhu Hassan told us while in New York – and I was there personally – to sit with the ministry and discuss the expenditure of these funds. To our shock, we only read in newspapers how the money was allocated,” Mr Chambulo noted.

Bank of Tanzania figures show that, in 2019, the country attracted 1.5 million tourists, thereby earning the economy $2.6 billion – thus, for the first time, becoming the leading foreign exchange earner for the economy.

In 2020, the latest World Bank report shows, tourism fell by 72 percent, thanks to the adverse effects of the Covid-19 pandemic – and prompted massive businesses closures and unprecedented layoffs of workers.

“As we are talking now, thousands of staff members are still at home, as we struggle to revive the industry with empty hands. We have bank loans and interests are piling up. As if that were not enough, no bank is interested to issue credit to us anymore,” he lamented.

(The Citizen)


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