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2018 Budget Provides Hope For Tourism Industry
 
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30-Nov-2017  
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Government intends to spend about GH¢75.3 million in 2018 on tourism, culture and creative arts as against GH¢43.9 million in 2017. This represents 71.2% increase in the allocation to the ministry.

Though the allocation for 2018 is not enough to address all the challenges in the sector, it is a good development and indicative of the increasing influence of the sector on the national economy.

It is estimated that the sector can contribute more than 10% to GDP directly. But the sector’s contribution currently to GDP is far below 10%. The World Travel & Tourism Council (WTTC) estimated the sector’s direct contribution to GDP to be 3% in 2016 and 7.1% total contribution, while employing 5.6% of the workforce.

This implies that there is more to be done, hence the need to apply to these resources prudently.

Tourism ministry is experiencing changes in expenditure pattern

GH¢33.4 million of the 2018 allocation, representing 44.4%, would be used to pay employee compensations. This is lower than the 68.4% and 64.4% in 2016 and 2017 respectively. Expenditure on goods and services also increased by 191.5%, from GH¢4.3 million to GH¢12.6 million. This represents 16.5% of the ministry’s allocation relative to 0.06% and 9.7% in 2016 and 2017 respectively.

Capital expenditure allocation to the sector went up from GH¢10.4 million to 16.8 million, a growth rate of 62% and constitute 22.28% of total allocation to the sector in 2018 as against 0% and 23.6% in 2016 and 2017 respectively. This is indication of government desire to restructure expenditure in the sector to close the infrastructure deficit in the sector and also to provide the needed logistics sector employees.

A well-developed tourism sector should support the Cedi in two ways

The tourism sector is currently the fourth foreign exchange earner for the country after oil, gold and cocoa and its development will go a long way to solve the issue of the cedi depreciation. This is crucial because a well-developed tourism industry will provide support for the Cedi, both from the supply and the demand sides.

For instance, the supply of foreign exchange in the economy will increase through foreign tourists. On the demand side, a Ghanaian’s travel to other tourism destinations side outside the country may reduce. In this case, the demand foreign exchange will reduce.

Simply, a developed tourism industry has the potential to increase the supply of foreign exchange while decreasing its demand. The Ghana Investment Promotion Centre (GIPC) has identified some facilities that need development to drive the growth of the tourism sector.

This includes multi-hotel resorts; one each at the Volta Estuary; Brenu Beach in the Central Region; Cape Three Points area in the Western Region; Lake Bosumtwi in Ashanti, the Volta Lake Basin, Dodi Island, Dwarf Island, Digya National Park, Melinli Peninsular, Amedzofe and Wli-falls in the Volta and the Accra marine drive project.

GN Research analysts therefore expect the ministry to use these resources to provide the required amenities to attractive private involvement in the development of these sites. Since the resources are limited, a conscious effort should be made to identify the key ones capable of sparking a takeoff of the industry.
 
 
 
Source: Today Newspaper
 
 

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