Tourism is a powerful vehicle for economic development and job creation throughout the world. In 2016, Travel & Tourism directly contributed US$2.3 trillion and 109 million jobs worldwide. Taking its wider indirect and induced impacts into account, the sector contributed US$7.6 trillion to the global economy and supported 292 million jobs in 2016. This was equal to 10.2 percent of the world’s GDP, and approximately 1 in 10 of all jobs.
The World Travel & Tourism Council estimates that 3.8 million jobs (including 2.4 million indirect jobs) could be created by the tourism industry in Sub Saharan Africa over the next 10 years.
Tourism’s main comparative advantage over other sectors is that visitor expenditures have a “flow-through” or catalytic effect across the economy in terms of production and employment creation. During the construction phase of tourist accommodation and services, tourism creates jobs in that sector. If the country is sufficiently developed, the investment can generate demand locally for furniture and furnishings, and even for capital equipment.
Tourism in Ghana has become a major socio-economic activity with potential of contributing significantly to the total economic growth of the country given the vast tourism resources Ghana is endowed with. The sector remains the fourth highest foreign exchange earner after the gold, cocoa and oil. The government of Ghana has shown strong commitment to the tourism sector’s development to obtain the most recent and reliable trends in domestic and international tourism.
In 2016, according to the World Economic Forum’s “Travel and Tourism competitiveness report 2017 (TTCR) “the sector’s contribution to GDP was GHs4.9bn (US$1.2bn). In 2017, the World Travel & Tourism Council predicts an increase from GHs4.9bn (US$1.2bn) to GHC5.25bn (US$1.3bn). Ghana recorded US$818.8m international inbound receipts according to the TTCR in 2016, positioning Ghana higher above other African countries like Kenya, with US$723m and Namibia with US$ 378m.
It’s another year full of great potential and expectant growth in the investment sphere of Ghana. In our quest to accomplish major strides in Ghana’s tourism investment drive, the Ministry of Tourism, Arts and Culture is working together with the Ghana Investment Promotion Centre (GIPC) to reintroduce the Ghana Investment Promotion Centre (Promotion of Tourism) Instrument, 2005 (L.I. 1817)
The Act had generous investment incentives including import duty exemptions, tax holidays and exemption from the payment of VAT and other related charges. Establishments and tourism investment projects such as accommodation facilities, catering establishment, travel and tourism projects, conference and convention establishments, entertainment establishments and other strategic or major investment projects were the categories of projects that could benefits from the incentives and provisions of the Act.
HIGHLIGHTS OF THE INCENTIVES UNDER THE GHANA INVESTMENT PROMOTION CENTRE (PROMOTION OF TOURISM) INSTRUMENT, 2005 (L.I.1817)
| # | PROJECT CATEGOTY | INCENTIVE PACKAGE |
| 1 | Accommodation Facilities | ·Customs import duty exemption
·Exemption on Value Added Tax and other related charges on capital equipment, machinery, appliances, furniture and fittings in the pre-approved quantities to be used in establishing the project ·Exemption from the payment of corporate taxes ranging from 4 to 10years depending on the kind of facility and its location |
| 2 | ·Catering Establishment
·Travel & Tourism Establishment ·Conference & Convention Establishments ·Entertainment Establishments |
·Customs import duty exemption
·Exemption on Value Added Tax and other related charges on capital equipment, machinery, appliances, furniture and fittings in the pre-approved quantities to be used in establishing the project ·Exemptions on import duty, VAT and other related charges for components, spare parts and knocked-down parts to be used as replacements for equipment, machinery etc ·Exemption from the payment of corporate taxes ranging from 3 to 5years depending on the location and the type of facility ·Benefit from other relevant incentives contained in the GIPC ACT 478 |
| 3 | Strategic or Major Investment | ·The incentives given are as negotiated by the GIPC Board and approved by the presidency |
Companies like Best Western Hotel, Holiday-Inn just to mention a few benefited from the provisions of the Act. It is expected that the re-introduction of the act will still have the scope highlighted above and more as industry players have been looking forward to such a policy to help drive massive developments of the industry in Ghana.
Source: GIPC Corporate Affairs with additional files from the Ministry of Tourism, Arts and Culture