Ghana targets tourism expansion

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A wave of new high-end hotels, supported by a tourism development plan introduced last year, is spearheading Ghana’s efforts to attract a broader range of visitors to the country.

Although dwarfed by the country’s primary and secondary drivers – including hydrocarbons, mining and agriculture – Ghana’s travel and tourism sector forms a key part of the government’s bid to shift its focus away from a reliance on commodity exports and encourage growth in labour-intensive service sectors. The national drive to boost industry growth will look at developing niche markets, such as cultural and eco tourism, while also targeting an increase in business travellers.   

Promising prospects

Ghana’s tourism industry certainly offers plenty of potential for growth, although admittedly it is starting from a modest base. The World Tourism & Travel Council (WTTC) said in its Economic Impact 2013 report that the industry’s direct contribution to Ghana’s economy could rise to 9.7% this year, up from an estimated 6.7% in 2013, and well above the IMF’s forecast for overall economic growth of 6.1%. The sector should notch up annual growth of at least 4.5% in the 10-year period to 2024, the report added.

The government’s 15-year National Tourism Development Plan (NTDP), introduced in 2013, will act as a roadmap for new industry growth.

Efforts to create a more diversified tourism industry for the country will include a drive to attract new investment, with a particular focus on filling infrastructure gaps through public-private partnerships (PPPs). The WTTC report said capital investment in Ghana’s travel and tourism industry should increase by 5.2% in 2013, rising by a further 2.8% over the 10-year period to 2023.

Ghana’s minister of tourism, culture and creative art, Elizabeth Ofosu-Adjare, said the government expected international visitor numbers to reach 4.3m annually by 2027, up from 1.26m in 2012. She added that the government anticipated the industry’s annual contribution to the economy would reach $8.3bn over the same period.  

Business boost

Ghana is keen to build on its business tourism segment, which remained strong last year, despite an easing of overall economic growth. The country has seen a significant surge in business visitors following the discovery of oil in 2007, which prompted a jump in headline growth and inbound capital.

On the back of such performance, Patrick Fares, managing director of hotel investor Royal PF Holdings, told OBG that investment in the segment had continued, despite some uncertainty last year relating to the 2012 elections and a Q3 2013 dip in growth. “Hotel strategy and development have not been adversely affected by the economic situation in late 2013,” he said. “The Protea continues construction in Takoradi. The Golden Tulip is also being built in earnest. And the Best Western Atlantic was completed and opened despite any perceived economic slowdown. Hotels oftentimes have to be ahead of the curve.” A wave of new four- and five-star hotels has also brought a welcome increase in capacity to Accra. Hotels in the city were able to charge rates well in excess of $250 per night in 2013, with average occupancy rates hitting 80%, according to the World Economic Forum 2013 Travel and Tourism Competitiveness Index. New hotels are also planned for Takoradi, which is rapidly emerging as the locus of Ghana’s oil industry.

Ghana’s efforts to position itself as a destination for international conferences also received a boost this year, with the announcement that the country had been chosen to host a UN World Tourism Organisation (UNWTO) forum of African Tourism Ministers. The event, scheduled to take place late in 2014, will focus on the part that tourism can play in improving Africa’s image problems on the world stage.  

Diversification the key

The government is also looking to market its historical, cultural and natural attractions to a wider audience, particularly those outside of Accra, to not only expand tourism activity but encourage business travellers to extend their stays. Arts and crafts venues, such as the National Cultural Centre in Kumasi, the capital of the Ashanti region, as well as cultural attractions, such as the prehistoric city of Begro, provide the country with potential attractions, although there is still plenty of scope for improved marketing and content.

While Ghana – as with many other African economies – has sought to foster demand in new source markets outside of traditional regions like the EU and US, the government is also working on boosting domestic tourism, led by a national campaign, titled “Explore Ghana”. Officials hope that the initiative will raise the profile of key sites, while helping nationals to learn more about their culture and history.

“The movement of tourists within the country can help create income-earning opportunities for residents of rural communities and help alleviate poverty through the sales of arts and craft items, provision of hospitality services and tour guiding services and others,” Ofosu-Adjare said when launching the campaign.

Ghana is facing some broader macroeconomic complications at the moment, including concerns over its fiscus, but if the country’s long-term plan for developing tourism is implemented properly, it will help put the country on a firm footing by bringing in capital, diversifying revenues and stimulating job creation. However, attracting investment for essential infrastructure and facilities will be key to helping the industry meet its potential.

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