So, 2021 is upon us. Despite the widespread misery COVID-19 visited on the tourism industry in 2020 and which is spilling over into the New Year with renewed concerns, there is cause for the industry to be optimistic and hopeful about 2021.
A number of anti-coronavirus vaccines have been developed and massive vaccination campaigns are under way in many parts of the world to provide immunisation and pave the way for a recovery. Although these vaccination campaigns are taking place mostly in the developed world for now, it is only a matter of time until African and other developing countries follow suit. According to a recent briefing by the South African Minister of Health, a vaccination campaign could be launched in South Africa as early as February in a prioritised and phased manner.
Mass vaccinations are welcome news for the travel and tourism industry which has been and continues to be the most impacted sector of the world economy. According to UNWTO data, the virus could set the global tourism industry back 20 years, put 120 million jobs at risk and exceed over USD 1trillion in losses to global GDP. In 2019, some 72 million tourists visited Africa and accounted for USD 40bn in revenue. While the impact of the virus on the tourism sector in Africa in 2020 is yet to be fully assessed, it is expected to be deep, with millions of jobs lost and many businesses, small, medium and micro enterprises (SMMEs) in particular, forced to close.
The announcements of vaccination campaigns give hope that, despite the resurging and mutating virus, 2021 will be the year the tourism industry starts firmly on a path to recovery and the building of a better, more resilient, industry. An industry that, having learned once again just how risky it can be to depend heavily on overseas source markets, has had time to introspect to find ways of promoting and growing domestic and regional tourism as core markets with the depth, scale and product diversity to sustain the industry.
African Continental Free Trade Agreement
The other reason to be optimistic about the New Year is the African Continental Free Trade Agreement (AfCFTA) and the vast opportunities it stands to create for the African tourism industry in a post-COVID global environment.
Indeed, the momentous occasion of the operational launch of AfCFTA on January 1 is cause for optimism and hope about the future of the continent. It is remarkable that, despite the unprecedented pandemic, which many feared would jeopardise the operational launch of AfCFTA by causing a lengthy delay, the parties showed determination and pushed on to successfully conclude first phase negotiations of this historic continental agreement.
Negotiations of the first phase of AfCFTA concerned themselves with the development of protocols for trade in goods, trade in services, and rules and regulations on the settlement of trade disputes. It is exciting that the tourism sector – alongside other sectors such as transportation, communications, and financial services – has been included in the first phase of negotiations on trade in services. This is clear indication that African leaders view tourism as a strategic sector that is capable of creating jobs and lifting communities out of poverty.
The AfCFTA protocols for trade in services will give the tourism sector the legal framework and tools that will allow for its development as a fully integrated and highly competitive single market across the continent. Creating a single African tourism market that is governed by strictly enforced rules and regulations will enhance the sector’s ability to attract the large-scale investments and skills it sorely needs in order to achieve its full potential in a post-COVID global environment.
To be sure, AfCFTA is not the first attempt at regional economic integration as far as the tourism sector is concerned. The Regional Tourism Organization of Southern Africa (RETOSA) was established in 1996 by the 14 countries that form the Southern African Development Community (SADC) to promote and market the region as a single tourism destination. However, RETOSA was forced to close down in 2018, 22 years after it was formed, due to financial issues resulting from a lack of commitment by SADC member states to provide funding.
Similarly, in the East African Community (EAC), the East African Tourism Platform (EATP) is the regional tourism organisation mandated to promote the region as a vibrant and diverse single tourism destination. However, although the EAC comprises six member states (Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda), only Kenya, Rwanda and Uganda have joined the East Africa Single Tourist Visa programme, which was established to drive international tourist arrivals in the region. A major tourism destination such as Tanzania, for example, had been, until recently, reluctant to join the visa programme. Burundi and South-Sudan have yet to join. This reluctance, which is a major hindrance to full tourism economic integration, can be explained by differences of opinion among EAC member states with regard to how the visa regime should be implemented, including how visa fees should be collected and shared.
The two examples above show that the continent has been down the road of integrated tourism markets before, with rather limited success. Cynics may point to these experiences and ask how things will be different this time around. What gives us hope and reason to believe that economic integration under AfCFTA will be a successful proposition for tourism is that there is a high degree of political will and commitment to the idea of a continental free trade area at all levels.
At the national level, 54 of the 55 African countries have signed up to the concept. Out of these signatories, 34 have already ratified the agreement to date and are busy finalising trade offers and putting in place the administrative and logistical mechanisms needed to trade under AfCFTA.
At the regional level, there will be policy alignment between AfCFTA and all eight African Union recognised Regional Economic Communities (RECs), namely AMU, COMESA, EAC, ECCAS, ECOWAS, IGAD, SADC and SEN-SAD. These regional organisations, some of which have achieved significant levels of economic integration – ECOWAS for example - will constitute the building blocks for implementing AfCFTA.
At the continental level, an active institutional building process is under way to equip AfCFTA with the organisational frameworks and tools required to facilitate and regulate an integrated trade area of this size and magnitude. The AfCFTA Secretariat has already been established and is headquartered in Accra, Ghana. Various technical committees and sub-committees will be created to help the Secretariat drive implementation.
‘We must keep faith’
So, as we welcome 2021 with a heavy dose of anxiety courtesy of a virus that continues to ravage lives and livelihoods here and in our tourism source markets, we must keep faith that better days are around the corner now that anti-COVID vaccines have been developed and mass vaccination campaigns are under way.
AfCFTA holds the greatest potential for tourism in Africa. As the world’s largest single market with 1,2 billion consumers, 350 million of whom are considered middle class, AfCFTA has the potential to transform the tourism sector and catapult it to the forefront of socioeconomic development in Africa.
By removing trade barriers and allowing the free movement of people, AfCFTA stands to create an African tourist target market of 350 million consumers, equivalent to the size of the African middle class today. This target market is projected to grow to 600 million consumers by 2030.
Now that the building blocks of AfCFTA are falling into place, the African single marketplace of goods and services is starting to shape up. Free movement of goods, services and people means that most of the bottle-necks that used to make it near impossible for Africans to trade and visit each other hassle free, will progressively disappear.
The challenge now is for African tourism entrepreneurs, including SMMEs, to start exploring and considering ways of servicing this gigantic intra-African market. A good place to start is by developing innovative and highly diversified products and services that can be strategically packaged to target different consumer segments, both domestic and cross-border, in this gigantic intra-African market.
Trade facilitation and business development organisations will need to provide advice and the technical assistance tourism SMMEs, and any other SMME for that matter, will require in order to take advantage of the cross-border business opportunities AfCFTA has to offer.