Tourism sector financing enhances contribution to economic growth

Tourism sector financing enhances contribution to economic growth

CHANNELING of financing into tourism and hospitality would make the industry register sustainable growth while keeping on contributing into the economic growth.

Tourism contributes about 17.2 per cent to the country’s Gross Domestic Product and 25 per cent of all foreign exchange revenues and provides direct employment for more than 600,000 people.

The financial sector plays an essential role in financial intermediation which is a major factor in increasing investment and raising productivity of tourism and hospitality industry.

From a long-term perspective, the financial sector and in particular the banking system can lead to the successful development of 2.5 billion US dollars’ worth tourism and hospitality business.

The interdependence between the banking system as well as the tourism and hospitality industry should be a platform to enhance the sectors contribution to economic growth.

It is from this background that NMB bank Plc embarked on ambitious plat to address challenges in the tourism sector and provide permanent financial solutions, because that was an important way of keeping it afloat.

The bank’s tailored plans are aimed at making tourism industry grow and keep on contributing in the economic growth.

The NMB bank Zanzibar branch Manager, Abdallah Duchi, while meeting tourism stakeholders in a meeting organized by the financial institution in the Island over the weekend.

Coupled with sustaining financial transitions involving card use, tourists would be enabled to do various payments in point of sale or point of purchase (POS), hotels and related tourists’ institutions/companies through E-Commerce instead of carrying cash money that is unsafe.

“In Zanzibar as well as Mainland Tanzania, tourism industry contributes a great percentage in the country’s economy and for Zanzibar, about 80 per cent of the country’s foreign exchange comes from the sector,” he added.

The bank would continue supporting the industry to address its challenges, citing the Covid-19 that shook it.

In a related development, Mr Duchi asked Zanzibar government, Zanzibar Association of Tour Operators (ZATO), and the residents to give their bank preference, because it has all financial powers and recognized by international financial institutions like EURO Money that for four consecutive years has been getting awards.

While releasing their financial report, he said the bank was leading with 93.3bn/- profits accrued after taxation and estimated as 65 per cent increase from year-over-year within 2020 a half period.

Equally, this year they managed to increase their products to the public, citing them as introducing insurance services through their 220 branches, and payments through QR code system and other Internet banking.

Presiding over Zanzibar Second Vice-President, Ambassador Seif Ali Iddi asked ZATO to continue taking steps, which would improve internal tourisms, make the sector grow and refrain from solely  relying on one source to develop.

While opening second Tourism Forum in the Island, he said it was important for Zanzibar youth to be encouraged to visit the Island’s tourist attraction sites and market them with their networks.

Expounding, the Vice-President challenged them to use local resources and youth to market internal tourist attractions instead of relying heavily on external media and people to make them be known.

He said Zanzibar expects a lot of its economy contributions from the tourism sector, followed by entrepreneurs businesses and agriculture, adding: “You managed to have representatives from different boards in the government and you cooperate well with Ministry of Information, Tourism and Heritage, now managed to local markets as far as Germany, United Arab Emirates since 2008 till present.”

Ambassador Iddi said last year, tourism sector contributed 833.4bn/- to their national economy in comparison to 2018, when it pumped in 712.7bn/-.

He said that statistics in the comparison shows that there was a drop in the economy’s contribution witnessed within six months, which in turn negatively impacted in development.

“However, the government would strategize well to address recurrence of such loophole and continue to do a lot of marketing also in Europe, Asia and other continents,” pointed out Ambassador Iddi.

He advised the bank and other stakeholders to fully go digital as a way of keeping off physical contacts in the wake of Covid-19 as employees keep on serving tourists.

Equally, the Vice-President assured ZATO members that the government was fully behind them, hence asked them to exploit the opportunity by solving some challenges they face for the sake of national development.

On his part, Zanzibar Minister of Information, Tourism and Heritage, Mahmoud Thabit Kombo, asked the area Ministry of Finance to have a development of the industry that brings onboard the businesses community and market their sites as tourists’ attractions. 

Commenting, ZATO Chairperson, Hassan Ali Mzee, said such frequent forums are important, because they help the participants, who are stakeholders in the industry to network and share ideas on how to address woes challenging them as they strive to improve.

On his part NMB bank Head of Card Business, Philbert Casmir said they are well strategized to see into it that tourists get all support on financial matters they would want through their countrywide branches.

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