Tourism investments on decline—report
Capital investment by industries directly involved in travel and tourism has been on the decline despite efforts to incentivise developments in the sector, Ministry of Finance and Economic Affairs figures show.
Capital investment involves the acquisition of physical assets by a company for use in furthering its long-term business goals and objectives.
The data shows that real annual growth in spending on capital investment by all industries directly involved in travel and tourism has decreased from 13.8 percent to in 2015 to negative 11.1 percent in 2021.
In monetary forms, capital investments have fallen from a peak of K36 billion in 2015 to K33 billion in 2021.
However, the decline is happening at a time investors in the tourism sector have several incentives including zero-rated import duty, import excise, value-added tax (VAT) on imports and VAT exemption on locally purchased goods.
In its analysis of capital investment in travel and tourism, the ministry said there is need to incentivise new entrants into tourism businesses and promote existing tourism entrepreneurs.
Reads the analysis in part: “In keeping with this, government has been following the public private partnership [PPPs] investment mode in protected areas which has resulted in a revival of performance of the wildlife sub-sector.
“Government is also implementing the ecotourism and Protected Area Management Strategy for Malawi to promote PPP investments in its protected areas for improved revenue generation and community livelihoods.”
The ministry said it was banking on the 20-year National Tourism Investment Masterplan to guide the systematic tourism investment in the country by, among other things, identifying priority tourism investment projects across the country.
The plan’s project specifically seeks to identify national priority projects for implementation by government and the private sector and develop competitive incentive structures.
Malawi Tourism Council board chairperson Justin Dzinkambani urged the government to provide necessary enablers for industry operators such as road network infrastructure to enhance access to business facilities.
“Government needs to assist in creating a business environment that would enable the private sector to develop faster.
“We also need a legal framework that is seamless and friendly to help tourism sector growth.”
Tourism commentator and Orbis Destination Management Company managing director Innocent Kaliati yesterday proposed a holistic review of the waivers aimed at incentivising players in the tourism sector and consider extending the incentives to tourism sub-sectors such as tour operators.
Minister of Tourism Vera Kamtukule is on record as having said government is working on improving tax incentives such as duty-free importation of construction materials for accommodation facilities.
The Malawi Government recognises tourism as a priority sector to boost economic growth as part of the agriculture, tourism and mining (ATM) strategy
