Economic Update

Published 13 Dec 2012

Given the country’s comparatively low visitor figures, and its drive to diversify away from primary sector activity, Nigeria has long stated its desire to develop its tourism industry, although it will need to tackle challenges in human resources and training if it is to keep pace with the competition.

Tourism currently contributes just 1.6% to Nigeria’s GDP, according to the latest report of the World Travel & Tourism Council (WTTC). The figure rises to an estimated 3.3% once indirect contributions such as spend on infrastructure, supplies purchases, ancillary services and transport are included.

Speaking at the Abuja Carnival, a four-day cultural festival, in late November, Vice President Namadi Sambo said the time was ripe for Nigeria to build strong, sustainable growth in tourism. “The sector provides economic development options with high capacity for empowerment and employment opportunities, poverty reduction as well as good returns for investment,” he said.

Creating new jobs is a priority for Nigeria’s government, which faces pressing unemployment problems, especially among the under-30s, half of whom are believed to be without work. In spite of the country’s sizable revenues and massive economy, the majority of output comes from non-labour-intensive sectors, such as hydrocarbons, dampening job creation and exacerbating the problems of oil dependency.

Around 840,000 Nigerians are currently employed directly within the country’s tourism industry, representing 1.4% of the labour force. The WTTC expects the figure to rise to 1.6% over the next 10 years. The number of jobs created both directly and indirectly by the industry should reach almost 1.9m this year, according to the WTTC, and is expected to rise to 2.9m by 2022, making up 3.5% of total employment.

According to the WTCC’s estimates, Nigeria’s visitor numbers should increase by 3.5% per year over the coming decade, with the country expected to welcome a total of 1.8m international travellers this year. The number is forecast to rise to 2.9m over the next 10 years. By comparison, the WTTC expects South Africa to see 9.7m international tourist arrivals in 2012 and 13.9m per year by 2022, and Senegal to welcome 1.05m arrivals this year and 1.47m by 2022.

The World Travel Market Global Trends 2012 Survey, which was released in November, found that tourists from other parts of Africa, rather than traditional markets, look set to push up visitor numbers within the continent, as intra-regional travel grows in popularity on the back of strong business, linguistic and cultural links. The survey expects Nigeria to see overseas arrivals rise by at least 3% annually over the next five years, slightly lower than the WTTC’s estimate.

The 2012 survey also said the sector was well placed to benefit from Africa’s growing economies, but added that the county would need to do more to boost visitor numbers and keep pace with regional competitors. The survey expects Africa’s total visitor numbers to increase by at least 4.5% this year and in 2013, which is 1-1.5% higher than forecasts for Nigeria’s arrivals in the coming five-year period.

Staff training has also long been a key issue for Nigeria’s hospitality sector, and will become even more pressing as the industry expands. Edward Adebsi, the managing director of African Event Company, called on the federal government to add multi-level tourism training courses to the national educational curriculum. “The more institutions graduate tourism students, the more they tap the sector’s potential,” he told the state news agency.

Furthermore, better training courses may help to improve the culture within the industry. “Better training facilities are needed in Nigeria,” Alexander Gassauer, the area manager for Nigeria for Starwood Hotels and Resorts, told OBG. “Not only will this help increase local employment, but it will also increase the sense of commitment and enthusiasm among local staff. This will go a long way in changing the perception of a hospitality position from a job to a career.”

While niche segments such as Nigeria’s thriving Nollywood industry – the world’s third-largest film production market – are helping to raise the country’s profile, especially in the expanding African market, more will need to be done in terms of promotion and accessibility if the country is to sell itself to a wider audience and maintain investment flow. Nigeria still often suffers from a negative perception abroad and, as with many West African countries, obtaining visas for visitors can be a convoluted and expensive procedure.

While the minster of tourism, Edem Duke, has been lobbying cabinet for increased funds, his portfolio remains at the bottom of the budgetary allocation list. Industry players are all too aware that while they can highlight Nigeria’s potential, government funding that matches its commitment to supporting tourism growth is a key component of future success.