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Nigeria’s tourism competitiveness in West Africa

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2.3. Tourism in Nigeria

2.3.4. Nigeria’s tourism competitiveness in West Africa

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Table 4. International tourists’ arrivals per thousand populations in Nigeria and some other West African countries

Years Benin

Burkina Faso

The

Gambia Ghana Mali Niger Nigeria

Sierra

Leone Togo

1999 24 14 75 19 9 4 6 3 14

2000 12 10 76 20 8 4 6 3 14

2001 14 11 61 20 9 4 7 4 11

2002 13 10 42 22 9 5 7 5 11

2003 10 12 58 24 9 3 7 6 10

2004 24 12 51 25 10 4 7 8 11

2005 23 16 61 27 10 4 7 9 14

2006 22 18 71 20 12 5 7 8 14

2007 22 18 80 22 13 4 8 6 15

2008 22 20 89 22 13 4 8 6 14

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The regulatory framework is measured by index of: policy rules and regulations;

environmental sustainability; safety and security; health and hygiene; and prioritisation of Travel and Tourism. The business environment and infrastructure competitiveness is measured by: air transport infrastructure; ground transport infrastructure; tourism infrastructure; ICT infrastructure; and price competitiveness in the Travel and Tourism industry. The human, cultural, and natural competitiveness is measured by index of: human resources; affinity for travel and tourism; natural resources and cultural resources. The tourism competitiveness ranking of Nigeria compared to some West African countries is illustrated in Table 5.

Out of a total of 133 countries considered in TTCI computation in 2009, Nigeria ranked 128th. This is a weak competitiveness, and out of the eight West African countries included in the calculation, Nigeria ranked ahead of only Cote d‟Ivoire in the 130th position. The Gambia led with its 87th position followed by Senegal, Ghana, Mali, Benin, and Burkina Faso in order of global competitiveness. The same order of competitiveness holds for regional ranking within Africa and Middle East. Under the regulatory pillar, Nigeria ranked last by taking 132nd position due to lack of competitiveness in safety/security and health/hygiene where Nigeria ranked 133rd and 129th respectively. However, Nigeria has better ranking under policy rules, environmental sustainability and tourism priority under which Nigeria ranked 113rd, 61st and 122nd respectively. With the exception of Cote d‟Ivoire, West African countries are competitive in terms of environmental sustainability. The regulatory ranking revealed that, in West Africa, Nigeria has policy environment conducive to developing the travel and tourism sector, that Nigeria‟s natural environment provide an attractive location, and that tourism is a sector of primary concern to Nigerian government. Notably, there is need to improve the provision of pipe borne water, sanitation and health services.

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Table 5. Tourism competitiveness ranking of Nigeria and some other West African countries

Countries Senegal Ghana Mali Benin Nigeria

Côte

d’Ivoire Gambia

Burkina Faso

Regional ranking 12 13 18 19 25 26 8 24

Global ranking 101 110 119 120 128 130 87 126

Regulatory pillars

Policy 103 84 116 124 113 115 85 110

Environmental 67 48 70 38 61 102 52 71

Safety/ Security 43 69 77 68 133 124 27 83

Health/ Hygiene 120 117 124 125 129 119 107 122

T&T Priority 70 108 76 115 122 132 25 110

Index Rank 101 105 114 117 132 131 65 118

Business environment and infrastructure pillars

Air transport 82 101 118 121 95 88 85 124

Ground transport 93 96 100 104 118 71 58 82

Services 94 105 119 116 121 133 124 110

ICT 103 114 116 118 108 113 100 128

Price 115 36 89 74 69 120 14 87

Index Rank 108 102 126 121 116 123 90 122

Human, cultural and natural pillars

Human Resources 105 114 125 111 113 126 102 129

Affinity for T&T 87 56 54 98 124 116 13 101

Natural Resources 33 57 88 60 51 32 101 71

Cultural Resources 90 105 91 118 103 130 107 131

Index Rank 82 104 120 116 113 118 98 131

Source: TICAD, 2009

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In terms of the business environment and infrastructure, Nigeria is ranked 116th; this however is on a good side compared to countries like Benin, Burkina Faso, Cote d‟Ivoire, and Mali which are ranked 121st, 122nd, 123rd and 126th respectively. The Gambia, Ghana and Senegal have more competitive business environment ranking of 90th, 102nd and 108th position.

However, Nigeria is more price competitive than Senegal with the rank of 69th against 115th. In terms of Information and Communication Technology (ICT), Nigeria is more competitive than Ghana with the ranking of 108th and 114th respectively. And in terms of support services, Nigeria is more competitive than Gambia with 121st and 124th ranking respectively.

Nigeria competitiveness is strong under the human, cultural and natural resources competitiveness. Nigeria ranked 113rd following Senegal, The Gambia and Ghana which ranked 82nd, 98th and 104th respectively. In terms of cultural resources competitiveness, Nigeria is ranked 103rd position after Senegal and Mali in the 90th and 91st position respectively. With the exception of Gambia, all the other seven West African countries included have strong natural resources competitiveness. The passion for travel and tourism is relatively poor in Nigeria. The level of human resources competitiveness is similar in all West Africa countries examined. It is however pertinent to consider some elements of competitiveness index explicitly. This is the focus of the discussion that follows.

Air transport: Considering the air ways, the number of registered airline departure in Nigeria compared to other West African countries is depicted in Table 6. The registered airline departure from Nigeria increased from 9,400 in 1970 to 39,100 in 1980 and then decreased to 37,500 in 1985. It continued to decline at a faster rate from 17,400 in 1990 to 6,600 in 1990. It increased again to 12,761 in 2000, decline to 10,227 in 2006 and increased to 16,045 in 2006. As at 2008, the figure was 18,005.

Nigeria dominated the air transport market in West Africa during the period covered as showed in Table 6. On the average, Nigeria is followed by Cape Verde. Air departure in Cape Verde increased from 13,010 in 2000 to 19,905 in 2005. There is a slight decline in 2006 with 19,862 departures which increased to 21,086 and 12,236 in 2007 and 2008 respectively.

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Table 6. Air transport, registered departures in Nigeria and other West African countries

Country

Burkina Faso

Cape

Verde Ghana Mauritania Niger Nigeria Senegal

Sierra Leone 1970

1,600 na 5,000 5,600 2,900 9,400 4,100 na

1975

1,400 na 5,900 4,200 2,700 19,200 4,200 1,900

1980

2,300 1,600 5,600 4,900 3,100 39,100 5,800 3,200 1985

2,400 8,100 5,800 4,100 1,100 37,500 6,200 3,100 1990

2,200 6,700 12,600 3,600 500 17,400 3,500 500

1995

3,100 7,100 3,000 4,600 1,300 6,600 4,500 200

2000

3,368 13,010 4,873 3,761 1,518 12,761 2,415 202 2005

1,471 19,905 na 1,720 na 10,227 6,441 164

2006

1,512 19,862 na 1,725 na 16,045 Na 171

2007

1,614 21,086 na 1,833 na 16,936 Na na

2008

1,413 12,236 na 1,159 na 18,005 Na na

Source: African Development Indicators, 2011

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Price: Price competitiveness is an important element of comparison in any international business. For tourism, specific price index should be estimated. However, with the assumption that this price would vary directly with the general price level in the economy given the diverse nature of tourism expenditure, general measure of price can serve as a proxy.

Consumer price index (CPI) reflects changes in the cost to the average consumer of acquiring basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The Laspeyres formula is generally used. Apart from Ghana with index of 143 the rate of price increase in Nigeria is higher than that of other countries (Table 2.7). This is vital for a visitor that plans a revisit who must adjust his/her budget upwards. The Nigeria‟s GDP deflator (293) is only lower than that of Ghana and Guinea with the values of 360 and 300 respectively. All other West African countries have a lower value. The GDP implicit deflator is the ratio of GDP in current local currency to GDP in constant local currency. Inflation as measured by the CPI reflects the annual percentage change in the cost to the average consumer (tourist and non-tourist) of acquiring a basket of goods and services that may be fixed or changed at specified intervals.

Inflation in Nigeria (11.58 per cent) is lower than that of Guinea, Sierra Leone and Ghana with 18.38 per cent, 17.47 per cent and 16.52 per cent respectively. Other countries with data have lower inflation compared to Nigeria. When measured by GDP deflator, inflation in Nigeria (14.4 per cent) is higher than any other West African countries with the exemption of Guinea and Ghana with inflation rates of 38.87 per cent and 18.02 per cent respectively in 2008. Inflation as measured by the annual growth rate of the GDP implicit deflator shows the rate of price change in the economy as a whole. Expenditure of international visitors would necessarily require changing currency. The official exchange rate refers to the exchange rate determined by national authorities or to the rate determined in the legally sanctioned exchange market. It is calculated as an annual average based on monthly averages of local currency units relative to the US dollar.

The Nigerian official exchange rate of 118 in 2007 gave Nigeria a strong competitive edge over many other West African countries apart from Ghana and Liberia. Even the exchange rate of 150 at the time of writing was still competitive. This partially explains the source of the price competitiveness observed in Table 7.

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Table 7. Nigeria tourism price competitiveness relative to other West African countries

Country Name

Consumer price index (base year 2005) 2008

GDP deflator, period average

(LCU index 2000= 100)

2007

Inflation, consumer price index (annual per cent change)

2008

inflation, GDP deflator (annual per cent)

2008

Official exchange rate (LCU per US$, end period) 2007

Benin 113.4843 123.39 7.95 9.42 572.10

Burkina Faso 112.9804 118.89 10.66 5.06 481.04

Cape Verde na 126.80 6.78 5.44 120.00

Cote d'Ivoire 110.9909 124.91 6.31 8.12 483.71

Gambia, The 112.3256 213.31 4.46 5.95 na

Ghana 143.1118 359.52 16.52 18.02 0.97

Guinea 118.3841 300.12 18.38 38.87 4181.73

Guinea

Bissau na 130.41 10.46 9.51 449.94

Liberia na 209.89 Na 12.75 62.50

Mali 112.4214 129.28 9.17 13.58 626.90

Mauritania na 198.25 7.35 na 265.60

Niger 111.4103 118.52 11.31 7.61 481.60

Nigeria 127.2717 293.31 11.58 14.40 118.00

Senegal 114.327 120.61 5.77 7.33 445.59

Sierra Leone na 171.48 17.47 11.67 2977.60

Togo 112.1684 107.43 8.68 4.41 na

Source: African Development Indicators, 2011

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Internet and communication technology: One necessary aspect of tourists‟ expenditure is communication either through telecommunication or internet. The estimated call and internet prices in Nigeria and other West African countries with data are illustrated in Table 8. The average rate of mobile calls in Nigeria is $0.6141 per three minutes either during the off-peak or peak periods. This is highly competitive as the rate is lower only in four countries during the off-peak, namely, Mauritania ($0.3991), Ghana ($0.422), Senegal ($0.459) and Togo ($0.5737). And during the peak period, only Mauritania ($0.4989), Ghana ($0.4544) and Senegal ($0.5737) have lower prices. With the recent development in the Nigeria telecommunication sectors, this competitiveness will be sustained for many years to come.

The three-minute call rate measures the tariff of a call from a mobile subscriber to another.

The fixed telephone line is becoming less relevant in Nigeria and this explains the reason Nigeria has weak competitiveness in fixed telephone. The Nigeria mobile call competitiveness is reinforced by her cheap mobile connection charge, the cheapest in the region. The same trend of competitiveness is observed for the internet price. Price basket for internet is based on the cheapest available tariff for accessing the internet 20 hours a month (10 hours peak and 10 hours off-peak). Only four countries have cheaper internet rate than Nigeria ($25.82). These are Senegal ($10.68), Guinea ($17.78), The Gambia ($17.78) and Benin ($20.92).

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Table 8. Nigeria’s competitiveness of telephone and internet prices

Country Name

Mobile cellular- price of 3-minute local

call (off-peak rate -

US$) 2006

Mobile cellular-price of 3-minute local

call (peak rate - US$)

2006

Mobile cellular connection

charge (current US$) 2006

Price basket for

Internet (current US$ per month)

2006

Telephone average cost of call to US

(US$ per three minutes)

2007

Benin 0.9562 0.9562 9.5622 20.92 0.0313

Burkina Faso 0.8702 1.0308 114.75 91.41 0.2087

Cape Verde 0.9102 1.2174 46.018 40.72 na

Cote d'Ivoire 1.1283 2.2567 19.124 67.71 0.3756

Ghana 0.422 0.4544 7.0331 22.63 0.1603

Mali 0.8453 0.851 57.373 52.88 0.2217

Mauritania 0.3991 0.4989 11.086 102.43 0.1565

Niger 0.6885 0.918 Na 50.29 0.1431

Nigeria 0.6141 0.6141 3.8865 25.82 0.2066

Senegal 0.459 0.5737 40.161 10.68 na

Sierra Leone 0.8913 1.0331 Na 45.11 0.1878

Togo 0.5737 0.7172 17.212 na na

Source: African Development Indicators, 2011

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Health risk: Health risk is one of the factors that militate against international demand for tourism (Giacomelli, 2006a; Naudé and Saayman, 2004). The earlier analysis of TTCI competitiveness ranking revealed that Nigeria is not competitive in terms of health/hygiene.

This is confirmed by some indicators of tuberculosis and HIV/AIDS in Table 9. In 2008, Nigeria had about 303 incidences of tuberculosis per 100,000 people. This is on the high side together with Sierra Leone, Mauritania, Mali and Cote d‟Ivoire which witnessed 608, 324, 322 and 410 incidences per 100,000 people. Only 20.43 per cent of the tuberculosis cases were detected under Directly Observed Treatments (DOTs) in Nigeria. Incidence of tuberculosis is the estimated number of new pulmonary, smear positive, and extra-pulmonary tuberculosis cases. DOTs detection rate is the percentage of estimated new infectious tuberculosis cases detected under the DOTs, short course case detection and treatment strategy. HIV on the other hand is one of the widely spread diseases in developed, underdeveloped and developing nations. On average, Nigeria has not less than 3.1 per cent of population within the age bracket of 14 and 49 years living with this dreadful disease (HIV).

The range of this estimate is from 3.8 per cent to 2.3 per cent annually. It must be noted that apart from Nigeria, Cote d‟Ivoire and Togo are two other countries in West Africa with high rate of HIV infection.

As would be expected, Nigeria had the highest number of people living with HIV in 2007 as the total number of People Living with HIV/AIDS (PLWHA) ranges from 2 to 3.2 million with an average of 3 million. The country with the lowest number of PLWHA is The Gambia with only 8,200 people on average.

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Table 9. Health risk in Nigeria and other West African countries

Country

Incidence of TB (per

100,000 people) 2008

TB cases detected under DOTS (per cent)

2006

HIV prevalence rate, adult 15-49 years

(per cent;

high estimate)

2007

HIV prevalence

rate, adult 15-49 years

(per cent;

low estimate)

2007

People living with HIV/AIDS,

total (high estimate)

2007

People living with HIV/AIDS,

total (low estimate)

2007

Benin 91.76467 86.03 1.4 1.1 73000 58000

Burkina Faso 220.3111 18.77 1.9 1.4 160000 110000

Cape Verde 149.1671 36.96 Na na Na na

Cote d'Ivoire 409.6029 38.49 4.5 3.2 550000 400000

Gambia 263.4386 65.42 1.3 0.4 13000 3700

Ghana 201.7617 38.20 2.2 1.7 290000 230000

Guinea 302.2223 54.65 2.2 1.3 110000 73000

Guinea-Bissau 224.1545 67.58 2.6 1.3 23000 11000

Liberia 282.5432 69.26 2 1.4 41000 29000

Mali 321.7027 23.23 1.8 1.2 120000 88000

Mauritania 323.8815 35.67 1.5 0.5 26000 8300

Niger 177.752 51.01 1.1 0.6 85000 44000

Nigeria 302.6706 20.43 3.8 2.3 3200000 2000000

Senegal 276.8528 48.78 1.4 0.7 96000 47000

Sierra Leone 608.2654 34.66 2.4 1.3 76000 42000

Togo 437.589 18.73 4.1 2.7 150000 110000

Source: African Development Indicators, 2011

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CHAPTER THREE LITERATURE REVIEW

This chapter concentrates on the review of literature in terms of the conceptual issue, theoretical review, methodological review, as well as empirical review, relevant to the focus of this thesis.