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Assessing the damage to tourism sectors in Africa

Tourism sectors across Africa, like much of the rest of the world, are at a standstill and any recovery is likely to be slow going. Even if travel restrictions are lifted international tourists are unlikely to return this year, and a big hit to incomes will also put domestic tourism on hold. Overall, we expect the direct hit to knock 2-4% from GDP across the region this year.
Olivia Cross Research Assistant
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Africa Economics Update

CBN finally steps up to curb inflation

The Central Bank of Nigeria delivered a surprise 150bp interest rate hike, to 13.00%, today amid mounting inflation and balance of payments concerns. We expect rates to be raised by another 100bp, to 14.00%, in July but further tightening seems unlikely especially as the 2023 elections come into view.

24 May 2022

Africa Data Response

Nigeria GDP (Q1)

Nigeria’s GDP growth slowed to 3.1% y/y in Q1 as robust growth in the non-oil sector was more than offset by a slump in the oil sector. Looser fiscal policy ahead of elections in early 2023 will provide some support to activity going forward, but continued weakness in oil production and disruptions caused by draconian FX policies underpin our below-consensus forecast for growth of 2.3% over 2022 as a whole.

23 May 2022

Africa Economics Weekly

Markets and monetary policy, mounting pressure on naira

Recent investor risk-off sentiment has pushed up sovereign dollar bond yields across Sub-Saharan Africa, fuelling debt risks further, and has put currencies under pressure. Central banks appear to be taking note, with some policymakers turning tightening cycles up a notch. In Nigeria, the recent weakness of the currency on the black market was attributed to election-related spending, but the bigger issue is that downward pressure on the naira stems from the central bank’s unorthodox FX policies.

20 May 2022

More from Olivia Cross

Latin America Economics Update

What Mexico’s current account means for the peso

We expect that Mexico’s current account deficit will narrow, and could even turn to a small surplus, over the rest of the year as a strong goods surplus outweighs weaker remittance inflows. That should help the currency to strengthen over the rest of the year – our end-2020 forecast is 21.5/$ (from 22.3/$ now).

13 August 2020

Emerging Europe Economics Update

Assessing the fallout from the tourist slump

Borders are slowly re-opening across Emerging Europe, but international tourists are unlikely to return to the region in significant numbers for the key summer season. Romania and Russia are the least vulnerable and efforts to promote domestic tourism should soften the blow in Central Europe. But the loss of tourism will weigh on the recovery in Turkey and provide a significant hit to GDP in Croatia and the Baltic States.

7 July 2020
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