Tourism shows better prospects than oil
Earnings from tourism rose to $2 billion last year, about 500 per cent higher than the $369.17 million the country received from the export of crude oil within the same period, estimates from the Ghana Tourism Authority (GTA) have shown.
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This means the country’s earning from tourism was five times more than from oil exports.The strong growth in tourism revenue compared to that of oil exports confirms sentiments that tourism, if given the needed push, could overtake gold and cocoa to become the lead foreign exchange earner.
This is because although the sharp difference in earnings from the two sectors could be attributed to the 60 per cent crash in oil prices last year, it backed an annual trend, where tourism proceeds have consistently overtaken oil export revenues over the last five years.
Annual trend
Despite an unimpressive performance in 2014, which was the outcome of the Ebola outbreak, proceeds from tourism still overshadowed oil revenues after ending that year at US$1.29 billion. Earnings from oil exports, mostly from the Jubilee Field, were US$978 billion in 2014.
The same applied to earnings from oil and tourism between 2011, when the country completed its first fiscal year of oil reporting, and 2013.
A trend analysis showed that given the necessary support, tourism could easily become a leader in foreign exchange generation, a deputy Chief Executive Officer of the Tourism Authority, Mr Sampson Donkor, told the Daily Graphic.
“Tourism is capital intensive but worth any investment you make. So, if you set aside a good budget for it, the returns will be massive in just a short while,” he added.
Mr Donkor’s sentiments capture the mood of many stakeholders in the sector concerning foreign exchange generation from non-traditional sources.
In 2014, Dr Henry Kofi Wampah, then the Governor of the Bank of Ghana, advised that the country increased investments in tourism to help spur growth and rake in more revenue.
That foreign exchange, he said was needed to shore up international reserves and suppress the seasonal depreciation of the cedi arising mostly from shortfalls in hard currencies.
Miscellaneous allocation
The sharp difference in earnings from tourism and oil exports is in spite of a contrasting marked variation in budgetary allocation to ministries and departments overseeing operations in the tourism and petroleum industries.
In 2015 for instance, while budgetary allocation to the Ministry of Petroleum was GH¢799.6 million, that of the Tourism Ministry was GH¢33.3 million.
The Ministry of Petroleum’s 2015 budget was exclusive of some US$205.2 million disbursed to the Ghana National Petroleum Corporation (GNPC), the national oil company.
Making reference to the variations in the allocations vis-à-vis the potentials of the sector, Mr Donkor said “we normally get the miscellaneous.”
Going forward, he said the country should consider “siphoning some of the oil revenues to finance tourism promotion and development.
But instead of adding those additional funds to the budget, the deputy CEO said it should be channeled into a special project, which would make it possible and easier for value for money audits.
“If we do that one year and monitor the results, we will be amazed at the returns,” he added.
Increased foreign exchange from sectors such as tourism is needed to insulate the country from the infamous Dutch Disease, an economic ailment that causes a country to increase investments in its petroleum sector to the neglect of non-oil areas.
When that happens, the local currency normally becomes extremely strong, resulting in increased imports to the detriment of the local manufacturing sector.