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Amid stormy economic times Uganda's tourism sector struggles to stay afloat

Jun 23, 2009

Kampala — Uganda's wild animals, cultural heritage and its beautiful scenery are increasingly becoming a lucrative source of foreign exchange income for the country.

Thousands of Ugandans are directly and indirectly involved in a chain of supportive economic activities like guiding, transport, arts and craft making, accommodation and catering.

Last year, the Uganda Wildlife Authority reported, the economy drew Shs1.2 trillion ($560 million) from the tourism sector, placing it in a new league of Uganda's leading top income earners alongside, remittances from Ugandans working abroad, coffee and fish exports. The amount was realised from a total of 844,000 tourists who visited Uganda during the year.

Despite the numbers, there is little to show, according to industry players, for government's commitment to help the sector grow even further.

At the 5th Africa-Asia Business Forum that was held in Kampala last week, President Yoweri Museveni said that the tourism industry has the ability to transform Uganda in a developed country.

The President said that his government had recharged the tourism sector in Uganda by making Uganda a secure place to travel to, on top of making tourism sites more accessible.

However, the sector, which has the potential to be Uganda's leading foreign exchange earner, remains largely underfunded and almost unrecognised when it comes to national budget allocations.

While reading the 2009/10 budget speech, on June 11, Finance Minister Syda Bbumba, allocated Shs2 billion to the sector although she recognised it, "as one of the fastest growing service sectors of the economy and main foreign exchange earner for the country ."

In contrast, on the same day, Kenya, which is East Africa's number one tourism destination, allocated to the sector an expenditure budget that is 17 times bigger than that of Uganda, despite the fact that the economy is only twice as large as Uganda's.

In his budget speech, Kenya's Finance Minister, Uhuru Kenyatta allocated an immense Shs34 billion (Kshs1,200 million), to further boost the country's tourism sector which has been damaged by both the recession and post election violence that occurred in 2008.

Unlike Ms Bbumba who did not spell out what the money was meant for, Mr Kenyatta highlighted that about Shs23 billion of the total sum would be channeled through the Kenya Tourism Development Corporation to be lent to business enterprises in the sector in order to protect jobs. Ms Bbumba's counterpart also allocated kshs400 million or Shs11.4 billion for tourism marketing, "targeting the high-end market."

He also made it clear that the sector was expected to play a key role in the achievement of Kenya's Vision 2030 objectives the nation's grand development dreams in all sectors.

"Strong actions are required to be taken for the sector to withstand the current challenges and return to its impressive performance that was witnessed prior to post election disturbances," Mr Kenyatta said as he read his country's budget that is likely to keep Uganda in its third position, on the ranking of East Africa's favorite destinations.

Ms Bbumba, on the other hand, said a five-year national strategic plan for positioning Uganda as a competitive tourist destination is under preparation. The plan she said; "Will take advantage of Uganda's diverse rich flora and fauna," without revealing much.

And like all the other East African states except Burundi's, the Finance minister proposed to exempt from import duty on all four-wheel drive motor vehicles specially designed and built for tourism.

However, to some officials in Uganda's tourism industry, the tax exemption was no good news. A source in the industry who preferred not be named because she is not allowed to speak on behalf of her employer's tour and travel company said the incentive on vehicles was as good as nothing.

"Those vehicles are very expensive and we cannot afford to import them," she said adding that even the money that the government allocated was very little. "We don't even know where the money the government has allocated is going." Even the minister of Tourism could not tell exactly what the money is meant for.

"It is for promotion, ask UTB (Uganda Tourism Board)," Minister Serapio Rukundo said in a telephone interview with Business Power on Friday.

Mr Edwin Muzahura the marketing manager at UTB said, the Shs2 billion which was allocated was meant for marketing Uganda as a tourism destination to travelers in Europe Asia, and the US. He however said the money was too little to change the distorted image of Uganda.

"Shs2 billion can be wiped out in just four months if we are to market Uganda on any TV station in Europe," he said adding that it is very expensive to change the image of Uganda. "When you mention Uganda everyone recalls Idi Amin's era."

He added that because of the small budget allocation, during international tourism exhibitions where Kenya, Tanzania and Uganda show up, Kenya's marketing campaigns beat Uganda's by about 18 times. He added that Kenya like other African countries like Botswana, Benin and Angola, have powerful marketing strategies in Europe based on their beefy tourism budgets.

"They have presence in European underground trains, and at airports where we are not," he said. "Putting up a banner at Heathrow Airport (in the UK), costs $100,000 (about Shs219 million)," he said adding that UTB is left with no option but to use cheaper means like road shows, and exhibitions.

Ms Bbumba's drop in the ocean also means that the tourism board can pin up less than nine million banners a month, if the Shs2 billion has to be spent on air tickets, accommodation and salaries of the people running the campaigns.

As a result of the underfunding Mr Muzahura said, the tourism board was understaffed and cannot attract quality human resource.

"When you are underfunded, it means you cannot attract good people but mediocre staff to do the work," he said. According to him, the tourism board needs about Shs15 billion annually, to be in position to try and compete favourably with Kenya, Tanzania, and now Rwanda.

At last week's 5th Africa-Asian Business Forum, the Japanese State Secretary for Foreign Affairs Ms Seiko Hashimoto, noted that Uganda and the rest of Africa has remained a distant land to many people in Asia due to the negative image that international media has created about Africa.

"In some cases, the negative image caused by lack of information and knowledge, such as unstable security and disease prevalence may prejudice them against Africa," she said.

"I believe greater efforts should be put into image improvement strategies and equipping all stakeholders with better knowledge about Africa." She also said there was a need to focus on the improvement of safety and sanitation, the two factors to which tourists attach great importance in choosing destinations to travel to.

"All stakeholders should give utmost attention to these aspects," Ms Seiko told about 350 delegates at the Forum. On Africa's part, Mr Rukundo, Uganda's Tourism minister, called on Asian nations to allow African Airlines to fly directly into their countries so as to boost tourism between the two continents.

For instance, he said Africa would like to have more direct flights into Tokyo so that fatigue on the routes is reduced.

"I believe, and have no doubt that African countries can make their destinations more desirable and fulfilling," he said at the forum.

The tourism industry in East Africa is projected to double to $12 billion in 2018 from $6 billion in 2008 while the number of jobs will also rise to over 2.2 million from the current 1.7 million according to a report that was released by the East African community last year.

To benefit from the revenue which is almost four times as big as its current national budget, Uganda can only do better by heavily investing in its tourism sector to match that of its competitors.

Amid stormy economic times Uganda's tourism sector struggles to stay afloat
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