Economic Liberalization and the Tourism Sector in Tanzania

1. Economic Liberalization and the Tourism Sector in Tanzania Overview of the Tourism Sector Liberalization of the Tourism Sector Outcomes RM Issues

2. Overview of Tourism in Tanzania (1) • Tanzania’s is rich in natural and cultural assets for tourism industry. • Has the world’s largest remaining populations of terrestrial large mammals, including the two million migratory wildebeest, zebra, and gazelle of the greater Serengeti ecosystem (SLIDE) • Has one of Africa’s largest wildlife protected areas - Selous Game Reserve (50,000 sq.km ) • Has a spectacular and diverse landscape featuring the Rift Valley, Mount Kilimanjaro and Mount Meru, Lake Victoria, and a largely unspoiled Indian Ocean coastline. (Nelson, 2004)

3. Serengeti National Park

4. Giraffes

5. Hippos on a swamp

6. The East African Rift Valley -

7. Overview of Tourism in Tanzania (2) • Six world Heritage Sites (sites of outstanding cultural or natural importance to the common heritage of humanity) • Ngorongoro Conservation Area • Serengeti National Park • Lake Manyara • Selous Game Reserve • Mt. Kilimanjaro and Its National Park • Stone Town of Zanzibar and Ruins of Kilwa

8. Overview of Tourism in Tanzania (3) • Tourism Resources • 12 National Parks • 17 Game Reserves • 50 Game Controlled Areas and Marine Parks • Sandy Beaches (North and South of Dar es Salaam and Spice Islands of Zanzibar) • Natural Landscape • 25% of country land mass is conservation areas – expansion experienced recently • Tourism is based on wildlife attractions, concentration on the northern circuit, but diversifying to other areas

9. NATIONAL PARKS

10. Tanzania’s Main Natural Resource Attractions The Northern Circuit, and its extension to the Usumbara Mountains, includes: • Arusha, the main hub and also home to the International Conference Center, a venue for many world-class meetings • Ngorongoro Crater, the largest crater in the world with limitless wildlife • Serengeti Plains, famed for its mass movement of wildlife • Lake Manyara National Park, home to the tree-climbing lions • Tarangire National Parks • Mt. Kilimanjaro, the highest mountain in Africa • The Usumbara Mountains, to the east of Arusha, providing a temperate mountain climate where the African violet originates Olduvai Gorge – Southeast of Serengeti, the site of the discovery of the oldest human remains ever found The Southern Circuit comprises: • Selous Game Reserve, uninhabited since the early 20th century, with its untamed nature and wildlife • Ruaha National Park, a gem in south central Tanzania • Mikumi National Park, within a day’s drive of Dar es Salaam • Udzungwa National Park

11. Tanzania’s Main Natural Resource Attractions The Western areas close to or on the shores of Lake Victoria include: • Gombe Stream, known for Jane Goodall’s work with chimpanzees • Katavi National Park, less well traveled but with its own charm • Mahale Mountains on the shores of Lake Victoria The Islands have a rich Swahili and Arab culture and include: • Zanzibar, with its well preserved capital, Stone Town, and beautiful beaches in the northeast • Pemba and Mafia Island with their marine parks provide excellent diving and fishing Dar es Salaam waterfront includes: • The Kilimanjaro Kempinski Hotel as an anchor investment Other major reserves: • Ugalla River, Uwanda, Moyowosi and Kigosi Game Reserves, less well traveled but with excellent potential for development

12. Elephants Wildlife Migration

13. TANZANIA WILDLIFE GAZELLES? FLAMINGOS

14. TANZANIA WILDLIFE Zebra Beest

15. Features Prior to Liberalization (1) • Tourism was not a priority sector for development – emphasis was on wildlife conservation rather than utilization • Tourism concentrated initially on safari hunting and later after independence on less consumptive wildlife viewing • Govt. controlled tourism industry through Tanzania Tourist Corporation (TTC) (1971), top – down policy • High level of govt. control and monopoly of revenue • State owned and managed tourist hotels (e.g. Kilimanjaro Hotel, Mt Meru Hotel, etc) • Kilimanjaro Hotel initially managed by an Israel firm, taken by TTC in 1972

16. Tourist Hotels Kilimanjaro Hotel DSM Mt Meru Hotel, Arusha

17. Features Prior to Liberalization (2) • Govt. allowed limited investment by foreign companies – Isolationist policy and attitudes of govt. prevailed (Nelson, 2004) • Nationalization of the industry firms and restriction of private enterprises • Tourism trade via Kenya (more market oriented) – 1977 border closed – decline in tourism activities 1977-1985

18. Features Prior to Liberalization (3) • No / weak local community participation in conservation process and tourism (use of ‘fine and fences’ method of conservation) • Paramilitary measures (coercive) used to protect and manage parks • Development of wildlife considered as threat rather than a benefit to local communities, therefore the later opposed / resisted.

19. Tourism Sector’s contribution • Given TZ’s natural and wildlife resources, tourism is a sector with growth potential. It has become a major sector in the 1990s. • Growing fast and contributing significantly to the economy • By 2001, tourism contributed 12% of GDP and 50+% of export earnings. • Contribution to employment generation and linkages with other sectors

20. Tourism Sector Liberalization (1) • Liberalization of the tourist sector 1990 • Policy changes: National Tourism Policy 1999 • BUT: The new policy, retains state ownership and control of wildlife resources. • Legal Changes: Repealed the 1962 Tanganyika National Tourist Board Act • Institutional Changes 1990s • Creation of the Tanzania Tourist Board 1992 responsible for advertising and publicizing tourist attractions, conduct research, collect and disseminate information on tourism • Privatization and sales of government assets (hotels)

21. Tourism Sector Liberalization (2) • Setting of Tourism Confederation of Tanzania (TCT) and Zanzibar Association of Tourism Investors (ZATI) to represent interest of the private sector • Investment Act No 26 of 1997 offers incentives and special benefits (tax holidays) to private investors in the sector • Tax holiday of 5 years: But enterprise change ownership before elapse of five years to enjoy the benefit. • Example: Sheraton Hotel became Royal Palm in 2001 before five years had expired, then was sold to MovenPick in 2004.

22. Tourism Sector Liberalization (3) • Tourist projects are exempted from import duties during construction • Corporate tax is set at 30%

23. Organization of the Tourist Industry (1) • Responsible: Ministry of Natural Resources and Tourism: Two divisions • Tourism Division: sector policy, planning and supervising; training • Has two organizations: • Tourist Agency Licensing Authority (TALA) • Tanzania Tourist Board (TTB) – responsible for marketing, investment promotion and research

24. Organization of the Tourist Industry (2) • Wildlife Division: responsible for wildlife management outside designated national parks and conservation areas; issuance of hunting concessions and licenses • Organizations: • Ngorongoro Conservation Area Authority (NCAA) • Tanzania National Parks Authority (TANAPA) – leases sites for photographic safari, lodges within and surrounding national parks

25. Liberalization Outcomes (1) • Govt. no longer directly engaged in commercial activities, but owns tourist natural resources • Rapid growth / expansion of tourism sector after 1990s. • Increased no. of private firms: up to 422 approved tourism projects by 2003 (new and upgraded hotels; tour companies; travel agents and restaurants). • Hotels : growth from 210 in 1995 to 476 in 2004

26. Liberalization Outcomes (2) • Growth in no. of tourists and earnings • Year No. Tourists Earnings (US$) 1986 103,000 20m 1990 153,000 65m 1999 627,000 733m • Contribution to Exports and GDP Year Exports GDP 1990 12% 1.5% 1999 60% 9%

27. Limitations • Tourism may involve drain of resources and loss of revenue • Problem of land grabbing and land speculation (hunting blocks: increased from 47 in 1965 to 140 in 1997) • Privatization of government assets (parks, community lands that have been homes and sources of livelihoods for local communities) • Leakage of substantial amounts earned from tourism by foreign firms monopolies that plough profits back home leaving very little money in destination country (package tourism) • Privatization of govt. firms: sold cheaply after heavy investment for face-lift companies before selling them • Tax evasion and under declaration of profits • External groups trying to benefit at the expense of local people (growing criticism on management of revenue from tourism).

28. RESOURCES MANAGEMENT • Owneship of tourism resources has remained under state organs, and management in partnership with private companies, local communities • Traditionally, local communities have benefitted little from conservation and tourism enterprises • Expansion of tourism has often been at the expense of loss of resources for local communities, hence the need to ensure they receive benefits from tourism (pastoral communities in northern Tz, fishing communities in Zanzibar) • With liberalization, there is growing emphasis on encouraging local community participation in tourism resources management and benefits.

29. Community Based Tourism • (Nelson 2004) • Ecotourism as “responsible travel to natural areas that conserves the environment and improves the well-being of local people”. • Community-based tourism refers more specifically to tourism activities or enterprises that involve local communities, occur on their lands, and are based on their cultural and natural assets and attractions. • Community-based ecotourism is therefore community basedtourism which focuses on travel to areas with natural attractions (rather than, say, urban locales), and which contributes to environmental conservation and local livelihoods.

30. Factors favoring CBT • The rapid expansion of the regional and national tourism industry and consequent need to diversify tourism beyond conventional national park products; • Economic pressures in northern Tanzania’s rural areas that led to local support for alternative non-farm livelihood activities such as tourism; • Policy trends in both poverty alleviation and natural resource management that encouraged community-based tourism as a way of creating income and conservation incentives at the local level; and • The existence of local government and land tenure institutions at the village level that enabled contractual agreements to be formed between private operators and rural communities.

31. CBT example • Ololosokwan village provides an example of community-based wildlife management generating win-win situations. • Ololosokwanvillage in Ngorongoro District earned $55,000 in the 2002–2003 tourist season from photographic tourism ventures on village land, • This village borders Serengeti National Park and Kenya’s Maasai Mara, and thus is a critical dispersal area for wildlife, as well as part of the yearly wildebeest migration route. • companies operating in this area are making significant financial and infrastructure contributions to the village (such as financing a clinic). • In turn, the village has dedicated a large portion of its land to shared use by wildlife and cattle. The village also helps support four village game scouts, who monitor the use of this area. • The villages clearly benefit from the financial and infrastructure inputs, but they also benefit by securing areas that can be used for grazing and conservation, and they increase their knowledge through interactions with outfitting companies and non-governmental organizations. • The companies gain exquisite wildlife viewing and wilderness camping in a unique area. The government gains the protection of a national resource, as well as a share of revenues from increased tourism. And lastly, the wildlife gains protected habitat.

32. CBT example 2 • The success of Ololosokwan reflects its wealth of resources, astute village government, and firm knowledge of villagers’ land rights. • Communities must be given user rights to wildlife, have clear title to their land, and develop their management capacity. • The longer it takes government to create institutions that generate true community-level incentives, the more loss of habitat and wildlife Tanzania will incur.

33. References • Kweka, J.; O. Morrisey and A. Blake; 2003, The Economic Potential of Tourism in Tanzania, Journal of International Development 15:335 -351 • Nelson, F., 2004, The Evolution and Impacts of Community Based Ecotourism in Northern Tanzania. Issue Paper No. 131, International Institute foe Environment and Development (IIED)