A range of factors should support further growth in the sector

A wave of new high-end hotels, supported by a tourism development plan introduced last year, is spearheading Ghana’s efforts to attract a broader range of visitors to the country. Although dwarfed by the country’s primary and secondary drivers – including hydrocarbons, mining and agriculture – Ghana’s travel and tourism sector forms a key part of the government’s bid to shift its focus away from a reliance on commodity exports and encourage growth in labour-intensive service sectors. The national drive to boost tourism growth will look at developing niche markets, such as cultural and ecotourism, while also targeting an increase in the number of business travellers.

Promising Prospects

Ghana’s tourism industry certainly offers plenty of potential, although it is starting from a modest base. In its “Economic Impact 2014” report, the World Tourism & Travel Council (WTTC) estimated that the industry’s direct contribution to Ghana’s economy could rise to 9.7% of GDP in 2014. The sector should notch up annual growth of at least 4.5% in the 10-year period to 2024, the report added.

The government’s 15-year National Tourism Development Plan (NTDP), introduced in 2013, will act as a roadmap for new industry growth. Efforts to create a more diversified tourism sector for the country will include a drive to attract new investment, with a particular focus on filling infrastructure gaps through public-private partnerships (PPPs). The WTTC report said that capital investment in Ghana’s travel and tourism industry should increase by 5.5% in 2014, rising by a further 2.8% over the 10-year period to 2024.

In June 2014, Ghana’s minister of tourism, culture and creative arts, Elizabeth Ofosu-Adjare, said that the government expected international visitor numbers to reach 4.3m annually by 2027, up from 1.26m in 2012. She added that the government anticipated the industry’s annual contribution to the economy would reach $8.3bn over the same period.

Business Boost

Ghana is keen to build on its business tourism segment, which remained strong last year, despite an easing of overall economic growth. The country has seen a significant surge in business visitors following the discovery of oil in 2007, which prompted a jump in headline growth and inbound capital.

A wave of new four- and five-star hotels has also brought a welcome increase in capacity to Accra. Hotels in the city were able to charge rates well in excess of $250 per night in 2013, with average occupancy rates hitting 80%, according to the World Economic Forum 2013 Travel and Tourism Competitiveness Index. New hotels are also planned for Takoradi, which is rapidly emerging as the locus of Ghana’s oil industry.

Diversification Is The Key

The government is also looking to market its historical, cultural and natural attractions to a wider audience – particularly those sites outside of Accra – to not only expand tourism activity but also to encourage business travellers to extend their stays. Arts and crafts venues, such as the National Cultural Centre in Kumasi, as well as cultural attractions, such as the prehistoric city of Begro, provide the country with potential attractions, although there is still plenty of scope for improved marketing and content.

While Ghana – as with many other African economies – has sought to foster demand in new source markets outside of traditional regions like the EU and US, the government is also working on boosting domestic tourism, led by a national campaign, titled “Explore Ghana”. Officials hope that the initiative will raise the profile of key sites, while helping nationals to learn more about their culture and history.

Ghana is facing some broader macroeconomic complications at the moment, including concerns over its fiscal deficit and downgrades from international ratings agencies, but if the country’s long-term plan for the development tourism is implemented properly, the sector will help put the country on a firm footing by bringing in capital, diversifying revenues and stimulating job creation. Despite the interest, attracting investment for essential infrastructure and facilities will be pivotal in helping the industry meet its full potential.