We have all heard of the falling and unstable prices of crude oil.
We are all witnessing the political horse-trading of accusations and blames between the in-coming and out-going leaders on the failure of our economy.
The burden of huge government financial obligation ever increasing against the backdrop of dwindling oil revenues, debts and backlogs of unpaid salaries all continue to make government fulfillment of its obligations a mirage.
Hiatus of unstable oil price
The government must have realised that with the fall in oil prices for a country which depends on oil for over 90 per cent of its revenue, accompanied by a national debt of N5 trillion, it already knows the situation on the ground.
Last week, the basket price of oil supplied by the Organisation of Petroleum Exporting Countries (OPEC) was $60.91 per barrel (pb). The price has fluctuated to as low as $49 pb in the past two months.
Due to the falling world oil prices, the former administration through the Finance Minister, Ngozi Okonjo-Iweala, cut down its oil price forecast on which the 2015 budget is benchmarked to $65 pb from $78.
In spite of further decrease, she assured that “price intelligence indicates that prices might average between $65 and $70 pb in 2015.”
And following the above, austerity measures have been suggested even as the government plans to focus on the non-oil sectors of the economy.
Federal allocation to states for April by the Federation Account Allocation Committee (FRAAC) hit a five-year low, a further challenge to the new administration.
April allocation was only $388 million, which is 11 per cent lower than the previous month, and 50 per cent lower than the figure for April last year.
The situation presents a golden opportunity for the government led by Muhammadu Buhari to look into other areas.
Tourism, world’s fastest growing sector
Before the government gets busy with several proposals on how to grow the economy, it is worthwhile to give tourism a serious consideration. The huge earning from tourism globally offers motivation.
The United Nations World Tourism Organisation (UNWTO) confirms that tourism is one of the fastest growing economic sectors in the world.
In 2013, international tourism generated $1.4 trillion in export earnings. Total tourism receipts in Africa for the year was estimated at $34 billion.
A World Bank report shows that Africa’s tourism industry could create 3.8 million jobs.
Nigeria’s three strong pillars
It is estimated that tourism contributed 3 per cent to Nigeria’s Gross Domestic Product (GDP) in 2012 and 2.8 per cent of total employment.
According to the travel and tourism competitiveness index (TTCI) 2013, Nigeria performed relatively well on three important pillars of the TTCI – natural resource pillar, cultural resource pillar, and environmental sustainability.
Nigeria has what it takes to succeed if it makes efforts to prepare the tourism sector to generate more earnings and create more jobs. Tourism at present generates about N80 billion yearly. In 2008, it generated the highest revenue of $688 million.
The new government must demonstrate its will to stimulate the potential of this sector by establishing an aggressive tourism promotion and development agency. This tourism development proposition is well in line with the Hospitality Outlook2015 for Africa published by PricewaterHouseCooper.
Nikki Forster, Leader of Hospitality for the South African firm, said Nigeria could take the top spot in Africa’s hospitality industry development with a projected 10 per cent annual revenue gain for the next five years.
The report allotted this spot to Nigeria while recognising that hotel occupancy fell 20 per cent due to Ebola outbreak and terrorist attacks in the country.
This hospitality growth projection for the next five years falls within the tenure of this administration.
Economic benefits of tourism
Sonny Odogwu, founder of the Grand Hotel Convention Centre and Resort, said hospitality is part of tourism and “hospitality is a very wide field, and attracts a wide range of investments.
“We can relate the subject to all aspects of human endeavour; business and economy, politics and governance, social, religious and cultural activities, leisure, et cetera.
“Making investment in hospitality, therefore, could relate directly to hotels, restaurants, entertainment of various types, theatrical shows, shopping malls, public relations, parks, beaches, et cetera.”
Reflecting on the national economic benefits of tourism, Odogwu said: “If the benefits inherent therein are adequately harnessed, tourism could become a strong alternative to oil as a revenue earner.
“In a well organised tourist country, the force in the sector alone can constitute more than 50 per cent of the entire national labour force. Tourism is one of the cardinal stones for achieving national development … and it also serves as a veritable tool for achieving Foreign Direct Investment (FDI).
“According to Nigeria’s Tourism Master Plan by the Olusegun Obasanjo administration, while the incidence of domestic leisure travel may be low, the sheer size of Nigeria’s population necessitates a significant contribution to the demand for tourism services.”
Foreign airlines, tourism operators
Mobolaji Ogunwumi, Country Manager Nigeria for ASKY Airlines, stressed that “tourism has become the bedrock of several economies with potential growing at an unbelievable rate.
An example is the United Arab Emirates’ (UAE) Gross Domestic Product which is said to reach up to 8.5 per cent in 2014.
In the last decade the Nigerian aviation industry has witnessed an influx of foreign airlines. These airlines recognise the travel potential of the Nigerian public and have not ceased to tap into the ever growing Nigerian economy.
“To tap into the tourism potential in this country, partnership should be encouraged between foreign airlines, tour operators and tourism promoters within and outside Nigeria. This will go a long way to display and promote Nigeria’s rich tourist destinations.
“Foreign airlines should showcase Nigeria as a desired tourist destination in their respective countries.
“It is to the airlines’ advantage when there is increased traffic into Nigeria, just as we currently witness an exodus of Nigerians to Europe, America and the Middle East all in search of tourist attractions at the expense of the beautiful places in Nigeria.
“These foreign airlines, in conjunction with tour operators, should put together attractive tour packages targeted at encouraging foreigners to visit domestic tourist locations in Nigeria.
“Places such as Obudu Mountain Resort, Ikogosi Waterfalls, the Hills of Idanre, Matsirga Waterfalls, Cross River Park, and Erin Ijesha Waterfalls are all places that will excite a foreign tourist.”