Presentation at a Workshop Organised by the

Federal Ministry of Tourism

By

Tunde Lawal Director (Macroeconomic Analysis)

Ministry of Budget and National PlanningThe Presidency

Thursday, 17th December, 2015

MAINSTREAMING TOURISM INTO THE ECO-NOMIC AGENDA OF GOVERNMENT: ISSUES

AND CHALLENGES

Nati

on

al

P

lan

nin

g

Com

mis

sion

OutlineIntroduction

Relevance of Tourism Sector to National Development-What Does Tourism Sector Mean?-Sector’s Importance to National development

Why Mainstream Tourism Sector to Strategic Plan?- Experience of Comparator Countries- Critical Success Factors for Successful Mainstreaming

The State of Tourism Sector in Nigeria? - Milestones Attained

Key Issues and Challenges

Current Efforts at Mainstreaming Tourism Sector in the Successor Plan (2016-2020)

What Role for the Stakeholders in the Tourism Sector?

2

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Nati

on

al

P

lan

nin

g

Com

mis

sion

1.0 Introduction• Tourism is one of the economic sectors in the world which is increasingly viewed as

the best opportunity and most viable option for sustainable economic and social de-velopment

• Sector plays significant role in most developing countries - Serves as a major source of foreign exchange and government revenues - Generate jobs in many sectors of the economy

• Growth in number of tourists has risen on a global basis over the years

• Evidence shows that popular tourist destinations are in affluent countries/ powerhouses of the world economy like the United States, Japan, Germany, France, UK, etc, - Opportunities are also evident in large and increasing tourism flows to developing world/ economic giants like Thailand, Singapore, Mexico, Thailand, UAE, Malaysia, China, etc

• These countries have been able to mainstream tourism into their Government devel-opment agenda

• Nigeria is yet to position itself to benefit from these great opportunities tourism mar-ket offers for growth and development

3

Nati

on

al

P

lan

nin

g

Com

mis

sion

1.0 Introduction (Cont’d)

• This paper is aimed at creating awareness on the relevance of tourism to national development

- And putting tourism on the development agenda

• Delighted that this workshop is coming at a time government is in the process of developing a medium term successor plan (2016-2020)

• Expectation is that this forum will help to sensitise stakeholders to appreciate the great potentials of tourism to facilitate national development

- And ensure that tourism is mainstreamed in the Successor Plan

4

Nati

on

al

P

lan

nin

g

Com

mis

sion

2.0 Relevance of Tourism Sector to Na-tional Development

• Tourism is defined as the processes, activities, and outcomes arising from the relationships and the interactions among tourists, tourism suppliers, host governments, host communi-ties, and surrounding environments that are involved in the attracting and hosting of visitors

• WTO Definition: Tourism comprises the activities of persons traveling to and staying in places outside their usual environ-ment for not more than one consecutive year for leisure, business and other purposes

Sector’s Importance to National Development

• Importance of the sector to national development are very significant from busi-ness, social, and cultural perspectives

• International visitors’ spending constitute an increasingly important source of busi-ness revenue in a destination city encompassing the hospitality, retail, transport, sports, and cultural industries, among many others.

• In many instances, it is a major economic engine for employment and income gen-eration for the city in question.

5

What Does Tourism Sector

Mean?

Nati

on

al

P

lan

nin

g

Com

mis

sion

2.1 Relevance of Tourism to National Development: The Various Di-

mensionsEconomic • Provides employment opportunities• Generates foreign exchange• Increase GNP and income, diversifies the economy• Spreads development• Increase governmental revenues• Can be built on existing infrastructure

Social • Improves quality of life - higher incomes and improved standards of living

• Broadens educational and cultural horizons• Provides tourist and recreational facilities that may be used by

a local population

Cultural • Reinforces preservation of heritage and tradition• Visitor’s interest in local culture provides employment for artists, mu-

sicians and other performing artists enhancing cultural heritage• Creates a favorable worldwide image for a destination

6

Nati

on

al

P

lan

nin

g

Com

mis

sion

3.0 Why Mainstream Tourism Sector into the Development Agenda of Gov-ernment?• Mainstreaming is used to describe the consideration of tourism sector develop-

ment concerns in national and subnational decision making processes (planning, budgeting, etc)

• Tourism initiatives cannot stand alone - They need to be effectively mainstreamed into the budget and medium term plans to enhance implementation

• Tourism sector is mainstreamed when specific tourism development measures are added to the government development agenda

• If countries need to focus on increasing tourism inflows/ capacity over the long term:

- Ad hoc responses (short-term responses, uncoordinated processes, isolated projects, etc.) are not a solution - Solution will need to involve: # mainstreaming tourism into the national development processes # Integrating tourism into all relevant strategies, policies, programs and projects

7

Nati

on

al

P

lan

nin

g

Com

mis

sion

3.0 Experience of Comparator Countries• Experience shows that countries that mainstreamed their tourism sector into government devel-

opment agenda have excelled not only in terms of enhanced number of international visitors, cross-border spending but improvement in employment, per capita income, etc

• Bangkok, Singapore, Dubai and Kuala Lumpur are in top ranking with not less than 8 million in-ternational visitors and $8 billion visitors spending

• Per capita income is very high in these countries while unemployment rate are low as highlighted below

8

Table1: Top Destination Cities by International Overnight Visitors, Overnight Spending, etc

Destination City Country Visitors (millions) 2014 Visitors Spending (US$’bn)

2014 GDP Per Capita (US$)

2015 Q1 Un-employment Rate (%)2010 2014

Bangkok Thailand 10.44 16.42 $13.0 3,451 0.9

Singapore Singapore 8.8 12.49 $14.3 38,008 2.0

Dubai UAE 8.41 11.95 $10.9 25,773 4.2

Istanbul Turkey 6.45 11.6 $9.4 8,872 10.1

Kuala Lumpur Malaysia 8.13 10.81 $8.1 7,304 3.2

Shanghai China 6.67 6.09 $7.6 3,866 4.05

Johannesburg South Africa 4.0 4.3 $3.2 6,086 25.5

Lagos Nigeria 1.5 1.3 $0.7 9.9

Sources: Data from MasterCard’s Global City Index, and Trade econom-

ics

Nati

on

al

P

lan

nin

g

Com

mis

sion

3.2 Critical Success Factors for Successful Mainstreaming - Thailand• Thailand is a world class tourists destination and tourism industry has played important role in Thai-land Economy

- Some of the critical success factors include:

• Help in promotion of tourism destination through visa facilitation, trade fair organi-sation and participation and marketing efforts by its consular offices abroad, ad-dressing infrastructural bottlenecks, etc

• Tourism attractions in Thailand include nature-based destinations, historical sites, culture, people’s friendly deposition, Thai cuisine, recreational facilities

• Tourism policy and future expectation of tourism policy are contained in the Eleventh National development plan of Thailand (2012-2016) and the community tourism, and the Thailand National Tourism Development Plan 2012-2016

• Tourism policy in Thailand has been simultaneously developed by several govern-mental sections/ organizations such as: Tourism Authority of Thailand, Ministry of Tourism and Sports, the department of Local Administration, Ministry of Interior and Community tourism

• Ensuring tourism products/services meet international requirements• Integrating poor local communities in tourism value chains through active entrepre-

neurial participation• working with existing tourism destinations and supply sectors• Preserved cultural and environmental assets • Encouraging human resource development and easy access to visa• Facilitating stakeholders meetings to identify business opportunities 9

Government Support

Tourists Attrac-tions

Tourism Policy & Expecta-tions

Government Agencies and mandates

Policy Focus

Nati

on

al

P

lan

nin

g

Com

mis

sion

3.2 Critical Success Factors for Suc-cessful Mainstreaming - Thailand Relationship of Government Policy and National Policy Development

Plan in Thailand

10

Government Policy

National Ad-ministrative

Plan

4 Year Opera-tional Plan

Annual Budget

National Economic and Social Devel-opment Plan

National Tourism Devel-opment Plan

Provisional Plan/Group of Provisional Plan/Local Plan

• Tourism planning is vital to multiply the positive effects of the industry • Stakeholders usually meet to identify and agree on selected tourist destinations as well as

the diversification of tourism products in order to attract more tourists through the provi-sion of a varied consumer choice

• In addition, within an assigned budget, stakeholders have to plan the creation and provi-sion of adequate facilities as well as the strengthening existing infrastructure and ameni-ties

• Tourism planning is vital to multiply the positive effects of the industry • Stakeholders usually meet to identify and agree on selected tourist destinations as well as

the diversification of tourism products in order to attract more tourists through the provi-sion of a varied consumer choice

• In addition, within an assigned budget, stakeholders have to plan the creation and provi-sion of adequate facilities as well as the strengthening existing infrastructure and ameni-ties

Nati

on

al

P

lan

nin

g

Com

mis

sion

Milestones At-tained

• Tourism master plan developed • Institutions on tourism created

• Many tourism site in Nigeria

• Hosting of national festivals and international events

• Rebasing of GDP has revealed some of the contributions of the tourism subsectors such as entertainment industry, etc

• Lagos is one of the top 7 destination cities in Middle East and Africa behind Dubai, Riyadh, Johannesburg, Abu Dubai, Cape Town, and Cairo

• Overnight international visitors spending in Lagos stood at $700 million in 2014 as against Bangkok’s $13.0 billion during the pe-riod

• Lagos recorded 1.3 million overnight international visitors in 2014 compared with Bangkok’s overnight visitors of 16 million during the same period

4.0 The State of Tourism Sector in Nigeria?

11

Nati

on

al

P

lan

nin

g

Com

mis

sion

5.0Key Issues and Chal-lenges• Government support – weak tourism institutions• Informality of tourism sector suppliers• External shocks• Skills development - weak hospitality training facilities• Limited capacities and skills of entrepreneurs to meet quality re-

quirements of hotels, restaurants and tour operators• lack of leisure time and inadequate disposable income• Insecurity, e.g the patronage of Yankari Game Reserves has de-

clined in the last 2 years • Financial and economic fraud, • Poor planning of the sector, and inadequate mainstreaming of the

sector concerns into the national development plan and budget• non regulation and unco-ordinated approach to tourism matters by

the public sector to encourage the private sector• Inadequate development of tourism sites and linking infrastructure• Low quality of locally produced goods, etc

12

Nati

on

al

P

lan

nin

g

Com

mis

sion

5.0 Key Issues and Challenges

• Non alignment of annual capital budget allocation with national de-velopment plans

• Inadeaddd

• Inadequate system of administrative statistics in Federal and States’ MDAs

• Weak capacity of Directorates of Planning, Research and Statistics (PRS) at the Federal and sub-na-tional level

• Absence of functional medium term strategic plans at the states and Federal/sectoral levels

13

Nati

on

al

P

lan

nin

g

Com

mis

sion

6.0 Current Efforts at Mainstreaming Tourism Sector in the Successor Plan (2016-2020)• The Federal Government has directed that a success medium term strategic plan

(2016-2020) developed to deliver the Vision 20:2020 and Government Change Agenda

• The successor plan is expected to give the tourism sector the prominence it deserves

• Tourism sector is one of the priority sectors under the economic pillar of the Succes-sor Medium Term Strategic Plan

• This is in recognition of the fact that the tourism sector has great potentials in the country in the areas of:

- Job creation, income enhancement, poverty reduction, diversification of government revenues and foreign exchange earning

• The successor Plan is also focusing on infrastructural development - This is expected to increase access to electricity, improve the condition of FGN roads, enhance the rail network, promote private investment in infrastructure development are expected to boost tourists inflows into the country - Serves as an enable to the development of the tourism sector

14

Nati

on

al

P

lan

nin

g

Com

mis

sion

6.0 Current Efforts at Mainstreaming Tourism Sector in the Successor Plan (2016-2020)• Under the environment pillar, effort will be made to promote sustainable

use of natural resources in the country- Include preservation of tourism sites

• Government is also committed to improving tourists perception of Nigeria as a safe and secured society by prioritising national security in the successor Plan

• The issue of anti-corruption, accountable, transparent and participatory gover-nance are also being considered in the transformation agenda

• Adoption of Zero-Based plus outcome based budgeting approach in the country will ensure that programmes and projects that are tourism oriented are admitted into the plan

- ZBB is a bottom-up approach and this will be enable the actors and stakeholders in the tourism sector to integrate the tourism initiatives into the successor plan and the budget

• The merging of the Budget Office and National Planning will enhance effective im-plementation of the plan and participatory approach to budgeting

15

Nati

on

al

P

lan

nin

g

Com

mis

sion

7.0 What Role for the Stakehold-ers in the Tourism Sector?• Key stakeholders in the tourism sector have roles to play to ensure that the con-

cerns of the sector are mainstreamed into the successor plan and Budget

• There is need for the agencies of government responsible for tourism in the coun-try to identify the key stakeholders in the sector towards updating the Tourism Masterplan which was developed in 2006

• There is also need for the stakeholders to develop operational plan for the imple-mentation of the Masterplan

• Tourism sector is an area where the public and government need to be sensitise on the importance of the tourism sector

• The development of the tourism sector will require a bottom up approach this means that the local communities, States Government and relevant government agencies, economic sectors, regulators and private sector need to be actively involved and carried along

16

Nati

on

al

P

lan

nin

g

Com

mis

sion

17