DOMESTIC TOURISM IN RWANDA. UNTACKLED POTENTIAL

Abstract

As a continuously growing industry worldwide, tourism has often demonstrated its role as a vital tool in the advancement of economies through direct domestic and foreign exchange earnings and through the employment and investment opportunities it can generate. African countries, mainly in sub-Saharan Africa, often over-reliant on one or two sectors for economic development, have recognized the potential of the tourism industry to diversify local economies and contribute to poverty alleviation, economic regeneration and stability, affording many Africans the opportunity to participate in and benefit from tourism. This paper provides an overview of domestic tourism in Rwanda, highlighting its significance, attractions, and initiatives undertaken by the government to promote this sector. By understanding the potential and benefits of domestic tourism, Rwanda aims to stimulate economic growth, enhance community livelihoods, and foster a sense of national pride among its citizens. The participation of local populations in Africa’s tourism industries, however, is often limited to employment opportunities. Travel by local tourists is often overlooked by members of the tourism industry, and is often considered a luxury by many in the local population. The role of domestic tourism and its importance for the creation of a sustainable tourism industry has been widely acknowledged, but limited writings on the subject exist and few tourism policies include domestic tourism, neglecting its potential. The emergence of a new African middle-class, equipped with more of a disposable income and influenced by Western lifestyles, has proven that such potential does in fact exist. Those living in Africa as well as members of the Diaspora have shown more of an interest in leisure travel and represent a new tourism market. Globally, the impact of domestic tourism has been shown to have had a great impact on the tourism economies of several countries, demonstrating that African countries can only serve to benefit from participating in domestic tourism. This research report provides a case study of Rwanda, an African country emerging from 1994 Genocide against Tutsi war and devastation, aiming to rebuild itself economically, socially and politically. The country has chosen tourism as one of its main economic drivers for poverty reduction and economic development. While the industry is succeeding, an over-reliance on international visitors in such a volatile region threatens the sustainability of the industry. The development of a domestic tourism industry, as has been demonstrated in other countries, offers the opportunity to generate a more diverse and economically sustainable domestic tourism industry. This research focuses on the potential impact of such a domestic tourism industry on Rwanda’s tourism economy and as a result, on the country’s economy as a whole. Tourism is a major source of Rwanda’s foreign exchange earnings and tends to generate a higher proportion of formal sector jobs than other sectors and could make a substantial contribution to growth. Within tourism, strengthening the provision of nature-based tourism, which accounts for 80 percent of leisure and conference visitors in Rwanda would also help protect biodiversity and advance Rwanda’s efforts to adapt to climate change. Nature-based tourism faces significant challenges, including potential limits on expansion of revenues from one of the primary international attractions - gorilla trekking, degradation of the natural assets that underpin the sector, risks presented by infectious diseases, habitat change and overexploitation, and the impact of climate change on tourism demand. Key measures to promote nature-based tourism will need to include expanding the network of protected areas and improving management of the natural assets within and outside protected areas and diversifying the nature-based tourism’s offering while complementing efforts to diversify tourism activities. Efforts are required to enhance revenue sharing mechanisms to increase incentives for local communities to conserve natural assets and unlock new opportunities and community-led enterprises that generate revenue from tourism and sustainable management of natural resources, including forests. This is essential to address poverty, to mitigate poaching threats, other illegal activities, and reduce unsustainable exploitation of resources. It is also imperative to secure private sector participation in financing and operation of facilities by introducing innovative financing methods to secure the necessary investment, strengthening capacity and management of tourism facilities and services, and removing subsidies that contribute to environmental degradation. Despite the significant challenges posed by the pandemic, these efforts have enabled the economy to maintain stability and set the stage for continued growth. In 2022, Rwanda’s GDP grew by an impressive 8.2%, with the services sector accounting for 46% of the growth and the industry sector contributing 21%. To sustain this growth trajectory, key priority sectors such as manufacturing, agriculture, and construction need to be boosted through the Manufacture and Build to Recover Program. This program has mobilized investments of USD$1.75 billion and created 35,000 jobs since its inception in 2020. These sectors are crucial enablers of value addition, job creation, and enhanced production, essential for recapturing the domestic market and diversifying exports. Tourism, saw a rebound to nearly pre-pandemic levels in 2022, generating USD$455 million. Continued investment and support are necessary to build on this impressive performance, which has significant ramifications for the service sector, contributing to almost half of the GDP. The government’s unwavering focus on key priority sectors and sustained investment in tourism will be critical to sustaining and accelerating economic growth. With ongoing efforts and strategic planning, Rwanda is well-positioned for a prosperous economic future. Rwanda Development Board remains committed to supporting investors and businesses (domestic and foreign) who have chosen to be part of Rwanda’s journey towards sustained and accelerated growth.

Keywords: Domestic Tourism, Rwanda, Sustainable Economic Growth

CITATION: Rwigema, P. C. (2024). Domestic tourism in Rwanda. Untackled potential. The Strategic Journal of Business & Change Management, 11 (1), 101 – 147. http://dx.doi.org/10.61426/sjbcm.v11i1.2841