Impact of Tourism on Economic Growth and Development in Africa

Bichaka Fayissa, Christian Nsiah and Badassa Tadasse
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Badassa Tadasse: Department of Economics, University of Minnesota-Duluth, Duluth, MN 55812, USA

Tourism Economics, 2008, vol. 14, issue 4, 807-818

Abstract: During the 1990s, Africa experienced a rise in tourist arrivals from 8.4 million to 10.6 million and a growth in receipts from US$2.3 billion to US$3.7 billion. According to the World Tourism Organization, the tourism industry in sub-Saharan Africa enjoyed a robust annual market share growth rate of 10% in 2006. In spite of this, there are few empirical studies that investigate the contributions of tourism to the economic growth and development of African economies. Using panel data of 42 African countries for 1995 to 2004, this study explores the potential contribution of tourism to the economic growth and development within the conventional neoclassical framework. The results show that receipts from the tourism industry contribute significantly both to the current level of gross domestic product and to the economic growth of sub-Saharan African countries, as do investments in physical and human capital. The authors' findings imply that African economies could enhance their short-run economic growth by strengthening their tourism industries strategically.

Keywords: economic growth; dynamic panel data; fixed effects; random effects; Arellano–Bond models; sub-Saharan Africa (search for similar items in EconPapers)
Date: 2008
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Working Paper: The Impact of Tourism on Economic Growth and Development in Africa (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:14:y:2008:i:4:p:807-818

DOI: 10.5367/000000008786440229

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