The Big Leap: Will Tourism Advance Africa’s Socio-Economic Narrative?

For the past decade, the African continent has managed to attract an impressive amount of international investment to vastly different business sectors. Up till 2019, the region has shown truly enviable growth rates, which did not go unnoticed by capital holders all over the world. What role, if any, has tourism played in this upward trend toward prosperity?

Turns out, the industry’s importance varied depending on the location, but the overall impact was largely both positive and significant. For instance, Cape Verde’s tourism has shown improved performance, sustaining its economy on hospitality efforts. The sector is even more crucial for Mauritius – 24% of its GDP is produced by it. In 2019, Ghana launched a viral campaign, The Year of Return, becoming a melting pot for long-migrated descendants wishing to reconnect with their ancestral roots. The campaign was surely a success together with the Trans-Atlantic trade appeal, following a 5.5% contribution from the tourism industry to the country’s GDP in 2018.


Before the pandemic, multiple data sources placed Africa second worldwide in terms of the tourism growth rate (5.6%) after the Asia Pacific and against a much more modest 3.9% global average. Now, given a rather depressive statistic on the number of international visits to the continent following the covid-19-related restrictions, local players are wondering whether domestic tourism could make up for at least some of that loss and how the Africa Continental Free Trade Area (AFTCA) could accelerate progress for regional tourism.


With a potential market size of over 1.2 billion people and a GDP of $2.5 trillion across all 55 member states of the African Union, it is hard to remain skeptical about the region’s potential to generate sufficient demand to elevate the depressed numbers. Together with generally improving infrastructure and the expected positive impact from AFTCA in terms of the facilitation of intra-continental migration, many experts think looking inward is one of the winning scenarios for the continent on its way to mitigating the pandemic-related damage.


More specifically, the freer movement of both people and goods is expected to enable trade and create more valuable local opportunities. In Nigeria, Heirs Holdings, a family-owned investment company, is diversifying its approach to leverage multiple high-potential scenarios across Africa. An example would be its strategic investment in the hospitality industry, which is currently witnessing the surge of new market entrants and product offerings set to modernize and disrupt the sector. The digitally-savvy younger generation has fueled the wind of change in the culture of lifestyle and hospitality, driving the adoption of experiential packages and tech-inspired cutting-edge solutions. Another impressive example is Aura, a recently launched digital platform redefining hospitality in Nigeria, turning a guest’s mobile device into a one-stop shop for booking accommodation, restaurants, and experiences.


Overall, the AFCTA agreement is expected to boost up to 50% intra-African trade between now and 2030, a span of less than a decade! Should such a forecast come true, both local small and medium-sized enterprises will have to get into the bandwagon of adopting the newest technologies and becoming more focused on servicing domestic demand. This, in turn, could have an enormous positive effect on the socio-economic position of the emerging middle class in the region and looks like the tourism industry is set to play an important role in this process. Hopefully, the ongoing covid crisis will not stand in the way.

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