Harnessing hospitality, travel and tourism to grow Nigeria’s economy by N3.5tn


First of all, we write to congratulate you all on your appointments as policymakers for the Federal Republic of Nigeria, and hope that your tenure is a successful one that positions Nigeria for sustainable growth in a manner that enhances the quality of life for Nigerians.

As you resume your duties, we would like to use this open letter to request for a renewed approach to hospitality, travel and tourism development in Nigeria. There have been several attempts towards tourism development in Nigeria. However, many of these have not taken into consideration the multi-disciplinary and fragmented nature of tourism, which has resulted in the under-utilisation of the capacity of the tourism industry.

The inaugural speech of President Bola Ahmed Tinubu touched on the priority areas for this administration, with social cohesion as a key theme to garner a stronger sense of self, identity, belonging and place. Tourism and the related cultural and creative industries can play a strong role in deepening the understanding of a destination, even for its residents, as well as promoting recreational and leisure activities which expand the horizon, and enhance quality of life, and social cohesion, whilst contributing to the internally generated revenues both for residents, domestic tourists and international tourists.

What needs to be done? The tourism industry requires a concerted, comprehensive and systematic approach to enable it to harness the transformative potential of tourism for development. This potential is indeed transformative as can be observed from countries such as Portugal which have deepened their focus on tourism, given its ability to ignite the development of other industries and sectors (as in the case of Portugal, the technology space and start-up scene). This is not a request for another tourism master plan.

Rather, for a review of existing masterplans and tourism development efforts, to ascertain the progress to date and the gaps that need to be filled. Following this, a tourism strategy can be carved out, and it is important that this strategy is realistic and sustainable by working with the resources that are available. These resources can be revamped and restored; however, the focus should be at the intersections of tourism, what makes the industry work, and what makes the system work.

Capacity building for the ministries, commissions and agencies, to understand more deeply the nature of tourism and its potential and opportunities, strong branding of the destinations, updating the accommodation provisions, connecting access to destinations and their attractions, and providing information on what attractions are available, and how these may be accessed.

Perhaps you may be wondering what the tangible economic and social benefits of a concerted approach to tourism can be. Here are some numbers. Globally, tourism is recognised as one of the major drivers for sustainable economic growth.

According to the World Travel and Tourism Council (WTTC), the tourism industry remains one of the fastest-growing sectors in the global economy and is currently responsible for 1 out of every 11 jobs. To put this into perspective, Nigeria has a working population of 122 million people, for 89 million jobs.

Underemployment and unemployment levels can be lowered with more entrepreneurship, and the tourism industry can provide for over 20 per cent of the current unemployed working population and contribute about 5 to 7 per cent to the economy.

In Nigeria, despite the lack of sustained efforts to build a viable tourism economy, tourism still contributes significantly to the GDP. In 2019, travel and tourism, directly and indirectly, accounted for ₦8 trillion of Nigeria’s revenue and created 3.36 million jobs (4.8 per cent of jobs and GDP), international visitor spending amounted to ₦654 billion (10.3 per cent of total visitor exports), while domestic visitor spending contributed ₦4.2 trillion (UNWTO Economic Impact Reports, 2019).

Looking ahead, the sector is expected to create 2.6 million new jobs over the next decade, doubling the number of those employed within the sector by 2032, GDP is also forecasted to grow at an average rate of 5.4 per cent between 2022-2032, significantly outpacing the 3 per cent growth rate of the overall economy and contributing close to ₦12.3 trillion by 2032, which is 4.9 per cent of the total economy.

What these figures suggest is that the economic impact of tourism in Nigeria cannot be overestimated. The volume of businesses supported by tourism – 80 per cent of whom are small and medium-sized enterprises (SMEs) – gives credence to the fact that tourism is a viable revenue-generating sector, and it makes sense for the government to provide an enabling environment to ensure this happens.

This is through investments, and a harmonized and simplified tourism policy environment throughout the country, that can attract private sector investment.

The industry provides long-term economic benefits to communities, including poverty reduction, stemming rural-urban migration, contributing to environmental and cultural heritage preservation and conservation, and strengthening communities.

Through tourism, domestic and foreign visitors can deepen their interactions with locals in host communities and strengthen their appreciation for cultural artefacts, values and resources. This will increase the social capital for Nigeria and provide Nigerians with a sense of place and identity while improving their quality of life by providing spaces for work and play in communities for residents, visitors and tourists.

Kindly see this letter as a reminder to review the existing tourism development strategies in your states, to help with the prioritization of the tourism and creative economy as part of your state development plans. We advocate for continuity in terms of existing projects as well as the identification of one or two focal areas that can catalyse the development of the industry.

There are several short to medium term opportunities that can be harnessed, and we propose a focus on value-chain amplifications, which require fewer intensive investments but can work to ensure existing facilities are enhanced and work seamlessly within the tourism value chain.

For example, rather than develop new hotels, look to create incentives for existing owners of accommodation facilities to renovate their properties to meet a clearly defined minimum standard, and to identify existing attractions and work to make them safer and more accessible, whilst strengthening other areas of the tourism system (e.g. availability of information digitally, appropriate signage, safety and security, well-trained public and private tourism workers).

At the national level, the creation of stand-alone ministries for the advancement of tourism, arts, culture and hospitality, is a welcome development. However, the work starts from the grassroots, and in this case, the state level. You remain the custodians of all natural, cultural and touristic assets, products and services in your states.

With effective leadership in tourism, a modern approach to tourism policymaking at the state and national levels, the creation of an enabling environment and the provision of the right incentives for tourism SMEs, strong partnerships with the private sector will emerge, which have been proven to contribute to a thriving and sustainable tourism industry. The time is right for the foundational blocks to be set in place for this to be a reality.

Congratulations to you all once again, and on behalf of the team and advisory board at Red Clay Advisory, we wish you a successful tenure.

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