Thursday, February 22, 2024

Why Nigeria needs to improve tourism offerings to be competitive

As Nigerian earnings from its main source, the petroleum industry continues to plummet and bedeviled by many factors including corruption, the need for diversification of the economy becomes more compelling. FESTUS OKOROMADU in this report writes on the need to harvest the huge potentials in Nigeria’s tourism industry.

Last Wednesday, Nigerians were once again accosted with an overwhelming corruption induced crisis facing its premium revenue earning sector, the oil and gas industry when the Senate ad hoc committee investigating the various turnaround maintenance projects of Nigerian refineries opened another can of worms on the operations of the Nigerian National Petroleum Company Limited.

The committee chaired by Senator Isa Jibrin hinted that from 2010 to date, over N12 trillion has been spent on TAM.

The upper chamber also said that it had records of over $592 million, €4.8 million, and £3.4 million spent from 2010 to date on TAM, unfortunately none of the refineries is working despite the humongous funds spent.

This revelation is apart from the theft of crude oil, pipeline vandalization and the environmental impact of the oil and gas driven economy.

The overbearing negative implication of the operators to harness and appropriately allocate the huge resources from the sector for the economic benefits and transformation of the country has led to the quest for urgent need for diversification.

To this end one key industry that readily comes to mind because of its potential to grow the economy as well as create jobs is the tourism industry.

According to Statista.com, the Nigerian Travel and Tour industry is projected to grow by 6.13 percent (2023 to 2027) resulting in a market volume of $3.746 billion in 2027. The sector is expected to generate $2.953 billion revenue by the close of 2023 with the package holiday unit expected to contribute as much as $1.239 billion.

Interestingly, the tourism industry whose enormous potentials remain largely untapped encompasses other service providing sectors such as transportation, hospitality and hotels, entertainment, art and craft and others. Better still, the industry is more of a private sector driven but has a huge prospect of generating revenues to the government in taxes.

“The Nigerian Travel and Tour industry is projected to grow by 6.13 percent (2023 to 2027) resulting in a market volume of $3.746 billion in 2027”

As noted by the Minister of Tourism, Ms Lola Ade-John when she hosted a delegation of Federation of Tourism Association of Nigeria in September, the sector can be transformed to become the number one revenue earner to the government.

Although the Minister is yet to be seen as marching her words with action, she has promised to drive the task of making the industry viable and attractive to private sector investors.

She stated that the sector topped President Bola Tinubu’s list of focus as enabler of employment creation as well as a handle tool for poverty alleviation.

A recent report from the World Travel and Tour Council confirmed the prospect of the industry when it said that the sector accounted for nearly 6 percent of Africa’s economic growth in 2022 and supported 22 million jobs, thus, underscoring its role in promoting economic, environmental and social progress across the continent.

Obviously, African nations are beginning to tap into the available potentials of the industry.

For instance, Rwanda’s choice to host the World Tourism Conference earlier in the month was geared at driving tourism traffic to the country.

Unfortunately, Nigeria seems to be bugged down by bureaucratic challenges when the rest of the world and indeed African countries are forging ahead to make things happen.

For instance, during the inaugural visit of the FTAN officers to the Minister, FTAN President, Nkereuwen Onung suggested the need to revisit stalled programmes initiated to grow the sector.

He noted that doing so will help the government achieve its objective of repositioning the industry for growth and development and a great contributor to the economy.

He listed the programmes to include the National Tourism Master -plan; hosting of the National Council on Tourism, state’s tourism master-plan, as well as the Tourism Satellite Account.

He stated that previous administrations abandoned these projects for no justifiable reasons despite the huge potential they possess for the growth of the sector in particular and the sector in general.

Need for holistic review of economy

According to a report by PwC Nigeria, titled, “Transforming Nigeria’s agricultural value chain,” published in 2016, the Nigerian economy was mainly driven by the agriculture and mining sectors in the pre-colonial era.

The report cited an example, stating that from 1960 through 1969, the agricultural sector alone accounted for an average of 57 percent of Nigeria’s GDP and generated over 64.5 percent of export earnings. But since the discovery of oil in 1956 and the oil boom (1970s) oil has been Nigeria’s major source of export and foreign exchange.

As of Q2 ’23, crude oil accounts for 79.63 percent and over 80 percent of total exports and government revenue, respectively. Nigeria’s huge dependence on oil has relegated almost all the other sectors to the periphery of importance in terms of value addition to the economy, thereby making the country a mono-product economy.

In another report by Financial Derivatives Company, on the need to diversify the economy, the economic experts said, “Mono-product economies are extremely susceptible to fluctuations in global prices, external shocks, supply disruptions, and other external issues.

For oil, the risks are even greater; the perennial fluctuations of the global prices of crude oil, the refocus of oil majors on green energy, and the sharp decline in oil demand are all warning signals that oil will soon lose its value.”

The company added that, “As such, countries like Nigeria that heavily depend on oil for revenue generation and foreign exchange earnings should begin to build a future away from oil, at least gradually.

“The Edo State government of Nigeria has already taken the lead in this regard by establishing a tourism, culture, and creative agency as part of the state’s effort to build a more diversified and resilient economic future beyond oil.

“For Nigeria’s fiscal sustainability and economic survival, governments at all levels should urgently look beyond oil and diversify into other sectors like tourism.”

Tourism as alternative to crude oil

Across the world, tourism is one of the major drivers for sustainable economic growth. According to the United Nations World Tourism Organization, tourism is the world’s third-largest export category (after fuels and chemicals), and in 2019 alone, tourism accounted for 7 percent of global trade.

But then, despite the substantial economic growth potential in the tourism industry and Nigeria’s rich tourist potential, the country has yet to tap into this goldmine.

For instance, the Travel and Tourism Competitiveness report released by the World Economic Forum in 2021 placed Nigeria in the 110th position behind other African countries such as Rwanda, Tanzania, Cape Verde, Mauritius and South Africa.

Some reasons behind this poor rating include low prioritization of the tourism sector, visa barriers for tourists, infrastructure deficit, and insecurity.

According to the FDC report, Nigeria is blessed with rich tourist attraction centres capable of making the country one of the global tourist destinations, given its diverse cultural heritages and an endowed geographical landscape.

It listed some tourism destinations in the country to include the beautiful coastal beaches in Lagos and Akwa Ibom States, the scenic mountains and hills at Obudu in Cross River State, Oke Idanre in Ondo State, Olumo Rock in Ogun State, the waterfalls at Erin Ijesha in Osun State, Agbokim in Cross River State, Awhum in Enugu State and Shiroro in Niger State.

Historical monuments such as Alom Ikom Monoliths in Cross River, Ogbunike Caves in Enugu, Gashaka-Gumti National Park in Taraba, and Arochukwu Long Slave Route in Abia, also exist.

“If these tourist attractions were developed and issues of infrastructure, visa barriers, and insecurity were consequently addressed, Nigeria would be well positioned as a preferred global destination capable of competing with the likes of Dubai, Seychelles, Cape Verde, and Mauritius,” the report stated.

States as drivers of tourism projects

Further highlighting the point made by the FTAN President during the visit to the Minister, the FDC report emphasized the need for both the national and state governments as well as private sector partnership investment in the task of developing the tourism industry in Nigeria.

A handy example is the Edo State government which recently established a tourism agency to build the economic future of the state away from the monthly oil derivation fund from the Federal Government.

With the tourism master plan, Edo State plans to generate N2 trillion in the next 10 years from tourism. Also, the master plan is designed to make the state a global tourism destination.

One of the motivating factors behind this master plan is the fact that Edo State has a rich deposit of cultural artifacts and heritage scattered all over the world. As such, the state is leveraging its rich heritage, which is unique to them.

Last week, the Edo State Governor, Godwin Obaseki, said the development of the 169-room Edo Radisson Hotel Project will boost the growth of the hospitality and tourism sectors and foster economic growth and development in the state.

The governor said this at the signing ceremony of the International Management Agreement between the Edo State Government and the Radisson Hotel Group, at the Government House, in Benin City.

The 169-room hotel, scheduled to open within the next 12 months is the Group’s 12th hotel in Nigeria and officially marks their debut in Benin City.

The hotel’s array of Scandinavian-inspired accommodation will range from contemporary standard rooms to expansive executive suites, including a presidential suite.

Creating a social hub for delectable cuisine, the hotel’s gastronomic offering will include a lobby bar and café, an all-day dining restaurant as well as a pool bar and grill. To provide a harmonious stay, guests can also unwind in the hotel’s gym and spa.

Speaking at the signing ceremony, the governor represented by Secretary to the Edo State Government, Osarodion Ogie, said the project represents a symbol of the government’s commitment to fostering economic growth and transforming the landscape of the state.

A renowned travel expert and organizer of Akwaaba West Africa’s largest trade exhibition event, Ikechi Uko, urged the Federal Government to actively support private sector initiatives aimed at fostering domestic tourism in the country.

Uko, who spoke at the Nigerian South African Chamber of Commerce Breakfast meeting sponsored by Phillips Consulting as part of its 30th anniversary quoted Fareed Zakaria of CNN, saying Nigeria should stop doing stupid things, start doing smart things and plan for the future.

Uko who was the guest speaker, speaking on the topic “Rethinking Tourism In Nigeria” proposed three ways to rethink tourism in Nigeria.

He highlighted the historical lack of government support of private sector efforts to drive domestic tourism, emphasizing the crucial role played by private firms and a select few states in this regard.

He underscored the importance of government support for domestic tourism using the highly successful Kenya Tourism Board’s Tembea Kenya as an example.

He listed The South African Tourism Sho’t Left project as another one.

He specifically mentioned the positive impact created by projects such as Naija7Wonders, Nigeria Tourism Lovers, Goge Africa and Naija Explorers, which have been at the forefront of driving domestic tourism growth, with states like Cross River, Osun, Lagos, Akwa Ibom and Ekiti actively participating.

He pointed out that a survey of the top 10 domestic destinations included those states with Akwa Ibom joining for the first time in 2022 as a result of Naija7Wonders and NATOP AGM.

He identified the reasons why Nigerians travel using data on passenger traffic from Nigeria over the past years.

“Nigeria is blessed with rich tourist attraction centres capable of making the country one of the global tourist destinations, given its diverse cultural heritages and an endowed geographical landscape”

The data he said is sourced from the Nigerian Civil Aviation Authority (NCAA), NBS, National Association of Nigeria Travel Agencies (NANTA) and the top five travel agents in Nigeria shows that VFR, religion, business, school, leisure, M.I.C.E, Medical and ‘JAPA ‘ are the major reasons for travels to the top destination of UK, USA, UAE, Saudi Arabia, Canada and India.

Uko talked about the potential of leveraging the global success of Nigerian artists in the music industry to enhance tourism.

He noted that Nigerian music has become widely popular across African countries as it is the most streamed music in most African countries except in some South African countries and the government should seize the opportunity to promote the country as a tourist destination.

Cross River State is another state that has activated plans to harness its tourism potential. Dating back to 2017, the state government said it was targeting generation of N1.7 billion annually from the sector.

Calabar, the state capital, has become a global holiday spot in December as the annual Calabar Christmas Carnival has continued to attract visitors from all Africa and beyond.

Interestingly, the current governor of the state, Bassey Otu has promised to support the industry through granting tax holidays to global investors willing to invest in the state.

To this end, the governor held a breakfast meeting with prospect investors in Lagos recently.

A statement issued by the Chief Press Secretary to the governor, Emmanuel Ogbeche, said the meeting was aimed at enhancing the tourism fortunes of the state.

He quoted the governor as saying, “For those of you willing to do business in Cross River State, we assure you of every incentive and support to do business including tax holidays and lost more.

“For all the banks, manufacturers, and every other business willing to come to our state, we assure you of great opportunities to make good fortunes in terms of fantastic government policy, regulations, and conducive business environment.”

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