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Tourism & Hospitality Playing a Key Role in the Growth of African Economy

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By Josephine Wawira

Ethiopia, Tanzania, and Djibouti are the African countries among the 10 fastest growing economies globally in 2017. This is according to a data-shot by Infinite Potentials Consulting (IPC), a professional services consulting firm which further states that the 3 states are expected to experience the highest Gross Domestic Product (GDP) growth in 2017, with a growth of 7.7%, 7.1%, and 7.0% respectively against a projected global average GDP growth of 2.7%.

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The growth acceleration in Djibouti has been driven mainly by port-related activities and transport, such as transit trade with Ethiopia which has attracted large public and foreign investments. On the other hand, Ethiopia and Tanzania have been significantly supported by the recovery of agricultural production, their rising service sectors, and increased infrastructure investments.

In a Hospitality Report for Ethiopia launched earlier this year by Jumia Travel, Africa’s leading online travel agency, Travel & Tourism directly contributed 4.1% to the country’s GDP in 2015 with ETB 51.3 billion (USD 2.26 billion). It is forecast to rise by 5% by 2026 to ETB 85 billion (USD 3.7 billion). This largely reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services, restaurant, and leisure industries; the report states.

“The Ethiopian hospitality industry has grown quickly over the last few years, and there remains a lot of untapped potential. Exploiting these opportunities with the help of new technologies, and accommodation service providers will support the country’s initiative to become one of Africa’s top five destinations in the coming four years. The challenges are abundant but the future is inspiring, and we look forward to bringing the intended growth and progress into reality,” said Paul Midy – CEO of Jumia Travel in the report.

Towards achieving inclusive growth, Africa has made progress in creating jobs since 2000. Between 2000 and 2010, Africa added 37 million stable jobs (including wage and salary employees and business owners). Out of this, the tourism and hospitality industry employs 1 out of 20 Africans, who indirectly work in the sector. According to McKinsey & Company, if Africa accelerated job creation by implementing a strategy to accelerate the pace of job creation, the continent could add as many as 72 million new stable jobs between 2010 and 2020 across all sectors, raising the wage-earning share of the labor force to 36%.

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