Govt loses 100bn/- as tourism earnings fall

08May 2020
Felister Peter
The Guardian
Govt loses 100bn/- as tourism earnings fall

​​​​​​​HAVOC is being wreaked in government coffers following the outbreak of Covid-19 on account of the loss of 100bn/- in revenue from the tourism sector this financial year.

Dr Hamisi Kigwangalla.

Revenue collections from tourism dropped by 75 percent in the fourth quarter of the 2019/2020 financial year from over 132bn/- to 33bn/-.

Dr Hamisi Kigwangalla, the minister for Natural Resources and Tourism told MPs yesterday that collections from the tourism sector will drop further in the 2020/2021 financial year due to global economic recession caused by the disease outbreak.

In the 2020/2021 financial year, the Tanzania National Parks (TANAPA) projected to collect 363.9bn/- but it is now expected to collect 64bn/-, he stated.

Collections from the Ngorongoro Conservation Area Authority (NCAA) are projected to drop to 58bn/- from earlier estimates of 162.7bn/-, while the Tanzania Forest Services Agency (TFS) will collect 121bn/- from the projected 153.6bn/-.

The Tanzania Wildlife Management Authority (TAWA) will see its collections dropping to 22bn/- from the projected 58.1bn/-, he said.

The outbreak of Covid-19 has hit the tourism sector following the drastic fall in visitors and decisions by major airlines to ground their planes, the minister had earlier stated.

In the 2019/2020 financial year, the ministry had projected to collect 71.5bn/- but it had collected 47bn/- until March, falling short of estimates by one third, he said.

TANAPA, NCAA, TAWA and TFS were expected to collect 701.8bn/- by March 2020, but they were able to collect 503.8bn/-, a fall of around 28 per cent, he said.

The pandemic had affected employment in the sector whereas the number of direct jobs is projected to drop to 146,000 from erstwhile 623,000 job placements, he said.

The number of tourists is likely to decrease to 437,000 by October this year from 1.8m in the financial year up to March.

The decreased number of visitors will affect revenue collections, diminishing from the projected 2.6trn/- to 598bn/-, he pointed out. 

The tourism sector has for some years been contributing 25 percent of the nation’s foreign currency earnings and 17 percent of the Gross Domestic Product (GDP).

Revenues from international tourists had increased from $ 2.4bn in 2018 to $ 2.6bn in 2019. Visitors were now spending up to 13 days in the country compared to 10 days in 2018, he remarked.

“Tourists daily expenditures also increased from $ 193 in 2018 to $ 266 in 2019,” he said, noting that the ministry had conducted a rapid assessment on the impact of Covid-19 on the tourism sector. The report has been handed over to the government, he told MPs.

The Parliamentary Standing Committee on Lands, Natural Resources and Tourism advised the government to take appropriate measures to rescue the tourism sector, including the scrapping of park and landing fees.

Committee chairperson Kemirembe Lwota (Special Seats, CCM) urged the government to loosen conditions for issuance of Visa as well as removal of Value Added Tax (VAT) on tourism services.

The government should reinstate the single entry system to national parks, she said.

Lwota underscored the need for a contingency plan that will enable institutions such as NCAA, TANAPA and TAWA to operate accordingly during the pandemic. She was concerned that the institutions’ performance has been affected due to decreased revenues.

Contributing, Busega MP Dr Raphael Chegeni (CCM) said the government should come up with a comprehensive plan on how to rescue the sector. Efforts should be done to ensure debt repayment relief and access of funds from international finance institutions to fight Covid-19, he stated.

Dr Chegeni warned that effects of the pandemic on the sector are set to worsen if appropriate measures are not taken.

“Measures should be taken to rescue TANAPA which is now collecting less than 10m/- per day,” he urged.

Kaliua MP Magdalena Sakaya (CUF) said the decreased number of tourists has not only affected the country’s economy but also people residing near the national parks.

Despite efforts, the government has to improve its strategies to combat poaching and protection of conservation areas and parks, she said.

Peter Serukamba (|Kigoma Urban, CCM) advised the Bank of Tanzania (BoT) and the Ministry of Finance and Planning to come up with fiscal decisions which will direct banks and financial institutions to suspend loan repayments from their customers.

He appealed for a stimulus plans for the business community especially those in the tourism sector (hotels, restaurants and food suppliers) as the pandemic is likely to last for months.

“We spend between 600bn/- and 900bn/- on debt servicing. These monies should be left in the country to enhance the fight against Covid-19. There should also be strategies to rescue TANAPA and NCAA as most of its operations have been affected,” he stated.

The House approved 114.6bn/- for the ministry’s recurrent and development expenditure for the 2020/2021 financial year.