Suffocating Tourism Ironic for a Nation with No Forex!

Talking about how blessed Ethiopia is with natural, historical, and cultural assets has almost become cliched. It wouldn’t be newsworthy if someone pointed out how this lovely nation of ours hasn’t been able to effectively capitalize on these riches. Before 2019, Ethiopia’s tourist sector had experienced consistent growth, but not always to the full extent of its potential.

Ethiopia received more than 800,000 visitors in a single year in 2019. Its number has significantly climbed since it peaked at under 136,000 in 2000. Before 2019, the tourist industry made up around 5 Pct of the GDP of the nation. Also, the sector has contributed to the reduction of the nation’s rising unemployment rate and helped pull tens of thousands out of poverty.

The COVID-19 pandemic, one of the biggest disasters facing the world as of the end of 2019, puts the sector in survival mode. It wouldn’t be an exaggeration to claim that the tourism industry was seriously impacted by the pandemic’s worst side effects. Unprecedented incidents occurred all across the world, forcing hotels to close, turning others into temporary health centres, and forcing tour operators to switch careers.

Even when it was time to address these problems, the Ethiopian tourism industry suffered another big setback. Since 2013, Ethiopia has witnessed political unrest. The majority of this turmoil eventually led to a full-fledged war in the nation’s north.

The nation’s economy as a whole and the tourism industry, in particular, have been harmed by this conflict. Because of the war’s direct attacks on tourist attractions, travellers were obliged to avoid Ethiopia, much less take a chance on going there. The tourism industry is suffering so much due to the protracted unrest that it doesn’t seem conceivable for it ever to recover.

The North’s dilemma has been addressed after a lot of hard work, which is great news for Ethiopia’s economy. The tourism sector, however, might not be overjoyed to hear such good news for some time. The formerly optimistic industry will now have to contend with a new tax law that removes it from the list of businesses that will be taken into account for VAT advantages.

The new legislation, if enacted and put into action, may impede any potential growth that the tourism industry would have as a result of COVID-19 and the numerous unrests the nation has been experiencing. The tourist sector is one of the sectors that governments must focus on in any support program, according to actual experiences in other nations like Kenya. Rather than flooding the market with high tariffs, other states profit from the commerce and tourism the sector can attract.

It is ironic that in a nation that is struggling with a lack of foreign currency, no support is given to a sector that can help resolve an issue that has persisted for decades. More support to the tourism sector, and not bombarding it with hefty taxes will help the nation ease its forex and unemployment burdens.

11th Year • April 2023 • No. 116 EBR