Malawi tourism sector’s contribution to employment has declined from 7.7 percent before the Covid-19 pandemic to 2.2 percent, published African Development Bank (AfDB) data shows.
Data from the recently published 2021 African Statistic Yearbook shows that before the decline, the sector’s contribution to employment had stabilised at 6.7 percent between 2016 and 2018, rising from 6.6 percent in 2015 and 6.2 percent in 2014.
In an interview, Minister of Tourism, Culture and Wildlife Michael Usi said government is banking on the Tourism Master Plan for more jobs and reduce unemployment in line with Malawi 2063, the country’s long-term development strategy.
He said: “The investment master plan is a critical toolkit to help guide investors in the tourism industry, and in the process create the much-needed jobs for Malawians.
Usi, however, observed that the sector has started recovering from the negative impact of the Covid-19 pandemic, which caused heavy losses to the sector and cost jobs.
“The pandemic has also made local tourism businesses more innovative with many diversifying their product and service offers.
“ There are strong growth prospects for the industry as it leverages on gains it made in the last half of 2021,” he said.
World Travel and Tourism Council data shows that the sector’s contribution to the gross domestic product rose to 5.8 percent in 2021, generating about K580 billion and creating an additional 15 600 jobs within the year to 513 200.
During the same period the previous year, the sector’s contribution to the economy stood at 5.7 percent and generated K555.1 billion, while prior to the pandemic, its contribution stood at 7.3 percent and generated K703.7 billion ($622.2 million) with 586 500 jobs.
The growth was mainly driven by domestic spending, which grew by 11.8 percent at a time international spending declined by 57.3 percent.
In the 2021 Malawi Government Annual Economic Report, government conceded that lack of zoned land for tourism investment and limited investment incentives are some of the factors that have been restricting Malawi from turning into a leading tourism and investment destination.
To promote investments in the sector, which is touted as Malawi’s third foreign exchange earner after tobacco and tea and considered a catalyst for economic and social development, Treasury introduced a number of incentives.
They include free import duty, free import excise and free value added tax on the importation of a number of goods.
Furthermore, hotels, lodges and inns with 50 rooms and above can also benefit from duty exemptions available on furniture and furnishings and two new passenger carrying motor vehicles.