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Ghanaian tourism grows with increased visitors and new funding strategies

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With significant potential to drive economic growth and job creation, the tourism sector is increasingly an area of focus for investment in Ghana. While the Bank of Ghana lists the sector as the fourth-highest foreign currency earner behind gold, cocoa and remittances, Ghana still has some way to go to become a destination of choice on the continent. In 2017 the sector contributed GHS12.58bn ($2.7bn), or 6.2%, to national GDP. A total of 1.3m international tourists visited the country that same year, representing a 6% increase compared to 2016. In terms of employment, the World Travel and Tourism Council reported that the sector supported 682,000 jobs, or 5.3% of total national employment, in 2017.

Priority Sector

The government regards tourism as one of the economic pillars for growth, job creation and diplomacy. In his 2018 speech addressing the nation, President Nana Akufo-Addo promised to support Ghana’s tourism sector with infrastructure investments. The 2019 budget demonstrated a commitment to achieving this goal by allocating GHS75m ($16.2m) to the Ministry of Tourism, Arts and Culture (MoTAC). President Akufo-Addo also highlighted the need to support capacity-building efforts to help the population learn skills relevant to the tourism and hospitality industry.

In April 2017 Catherine Afeku was appointed minister for tourism, arts and culture. She announced three priority areas for the ministry during her tenure: completing the Marine Drive Tourism Investment Project; stimulating the development of the creative arts industry; and hospitality training.

Marine Drive

The Marine Drive Tourism Investment Project is being carried out through a public-private partnership between the MoTAC, the Ghana Tourism Authority (GTA), and the Ghana Tourism Development Company. The project involves the development of some 97.5 ha of coastline in the Greater Accra Region, stretching from the Osu Castle to the Accra Arts Centre. The Marine Drive project has been over 60 years in the making, having been originally envisaged in 1963 by Ghana’s first president, Kwame Nkrumah.

Work on the project began in December 2017 and is expected to cost a total of around $1.5bn, though an anticipated completion date has not yet been set. When completed, it will be a mixed-use precinct with facilities including conference and exhibition centres, hotels, commercial offices, and a new complex for the MoTAC. It will also include a number of leisure and entertainment amenities, including a casino, as well as sporting facilities such as a beach soccer field and a golf course.

There is a strong environmental incentive to develop and fortify the area, given that it is located along a stretch of coastline that has been experiencing storm surges, which have caused significant soil erosion. To stop further erosion of the land, the construction will include measures to protect the shoreline. This is relevant for multiple areas, such as the popular Osu neighbourhood.

Arts & Hospitality

The government’s commitment to stimulating the development of the creative arts industry will be met in part through the construction of Akwaaba Hotels, a new hospitality chain geared towards leisure tourists. These hotels will be delivered as part of a public-private partnership and will feature designs that integrate Ghanaian handicrafts and artworks.

In terms of trazzining, the government will focus on building a pool of skilled people to take up jobs in the hospitality and tourism industry. This priority was first outlined in the ruling New Patriotic Party’s manifesto at the 2016 election. The administration has committed to furthering tourism sector education by developing five satellite hospitality training campuses across Ghana. The only government-funded hospitality training school, the Hotel Hospitality and Catering Training Institute, reopened in July 2018 following extensive upgrades and renovation work. The institute now offers practical training rooms, a career development office and stronger links to local industry leaders in order to enable faster job placements for graduates.

Regulation & Taxation

The GTA is the regulatory body for Ghana’s tourism sector. As such, the GTA is responsible for executing government policy in relation to tourism, including directing marketing and promotion. It also conducts research and collects data on the sector, and supports human resource development within the hospitality industry. While most national tourist sites, including national parks and cultural sites, are managed by the Forestry Commission of Ghana and local communities, the government has begun considering legislative changes that would put all national tourist sites under the management of the GTA.

A tourism development levy was introduced in Ghana in 2012, requiring all registered tourism operators to pay a tax equal to 1% of the price paid by customers for each service. The proceeds from the levy are deposited into the Tourism Development Fund, a vehicle administered by the GTA for reinvestment in the country’s tourism sector. In the six-year period between the levy’s introduction in early 2012 and December 2017, the GTA collected more than GHS39m ($8.4m) in revenue, GHS18m ($3.9m) of which has been used to repay bank loans for previous construction projects. The Tourism Development Fund has also financed ongoing projects, including the renovation in 2017 of safety and access facilities at Kintampo Waterfalls.

Marketing & Promotion

In late 2017 Akwasi Agyeman, the CEO of the GTA, announced a target of welcoming 1.5m tourist arrivals to the country for 2018. Agyeman also indicated a shift by the GTA towards more targeted and varied promotional campaigns, which would be customised to appeal to audiences in different countries.

In 2018 the MoTAC and the GTA announced several promotional activities. While these are primarily aimed at raising Ghana’s international profile as a destination, the country is also seeking to promote domestic tourism. In early 2018 the MoTAC secured a television broadcast licence from the country’s National Communications Authority. This will enable the ministry to launch a local television channel that will be focused on showcasing the country’s historical, cultural and natural sites, as well as promoting Ghanaian products. However, the channel’s programming remains under development, and an official launch date has not yet been set.

In late 2017 the GTA also selected 30 high-profile Ghanaians to serve as tourism ambassadors for the country. Two of these ambassadors – musician Daddy Lumba and actor Agya Koo – launched their own mobile media platforms in early 2018. Both of these platforms have a partial aim of promoting Ghana as a tourism destination.

In 2018 the GTA also began a formal promotion campaign in Nigeria, which is the largest economy in Africa and the third-highest source of visitors to Ghana. During the campaign launch in Lagos, GTA officials met with local tour operators and travel agents to promote Ghana’s potential as a beach and holiday destination.

To tap into new markets the GTA is also forming partnerships with niche interest and hobby groups in Europe. A partnership with the Royal Society for the Protection of Birds, Europe’s largest environmental protection membership group, was launched in 2018 to promote Ghana’s birdwatching attractions, which are among the most popular in West Africa.

The GTA has also been looking to attract more US tourists, who accounted for 12% – the highest percentage – of overseas visitors to Ghana between 2012 and 2017. This is largely due to the increasing popularity of heritage tours, with Ghana being a destination for US citizens of African descent wishing to connect with the culture of the continent. “Some 22% of tourism to Ghana is from North America, and we want to become the preferred West African destination for this demographic,” the GTA’s Agyeman told OBG. “Senegal is our main competitor, but Ghana being English speaking is a fundamental advantage.”

To gain a better understanding of the heritage market, the GTA has begun formalising agreements with US travel companies organising these tours. In December 2017 the GTA signed a memorandum of understanding with the Adinkra Group, a US-based travel and tourism company that designs and delivers cultural trips to Africa for a predominantly African-American customer base.

The first tour through this partnership, the Back2Africa Heritage Tour, took place in early 2018, bringing US travellers to Accra and other areas of the country for exposure to Ghanaian food, music and art. The GTA and the Adinkra Group also partnered on the release of a Back2Africa documentary, which follows a Washington DC-based go-go band as they tour Ghana on a journey to “connect with their ancestral roots through music.”

Hotels

With a pipeline of new construction projects announced by both private hotel developers and the government, hotel room capacity in Ghana is set to increase significantly in the coming years. Much of the new hotel supply currently under construction will be located in the airport district of Accra, a part of the city that is rapidly expanding given its strategic location for travellers.

The multinational Kempinski Group expanded its footprint in Africa with the opening of the Kempinski Gold Coast, a 269-room five-star hotel in the centre of Accra, in 2016. In May 2018 Marriott International opened the Accra Marriott Hotel, which is located near Kotoka International Airport. The four-star facility has 208 rooms, three restaurants, meeting space and a business centre.

Additional accommodation capacity is being provided with the entry of the Ascott Limited, an international serviced residence owner-operator headquartered in Singapore. Its Accra locations are the company’s first on the African continent. The first of these is a 40-unit property called Kwarleyz Residence, which opened its doors in September 2018 in the airport district. The second location, a 220-unit property called Ascott 1 Oxford Street Accra, is set to open in 2019.

Grant Funding

In early 2018 the World Bank provided a $50m grant to the MoTAC. This has been used in part to finance empowerment and capacity-building trainings for women and youth, with a particular emphasis on creating small enterprises in the creative arts industry.

The World Bank funding has also gone toward the construction of Akwaaba Hotels, a new chain of affordable leisure hotels targeting domestic tourists. In January 2018 Afeku unveiled high-level plans for the development of the hotels in an interview with local news media, stating that they are being built to make tourist accommodation more accessible to Ghanaians. “We realised that hotel accommodation in the country is too expensive and is a deterrent to tourists,” she said in the interview. Afeku also stated that the MoTAC had already trademarked the Akwaaba Hotels brand, and added that construction of the hotels was expected to be financed through a public-private partnership model.

Transport Network

The Ministry of Roads and Highways in Ghana has the primary responsibility of building, upgrading and maintaining roads in the country, and developing a better road network is an integral part of building a vibrant tourism sector. Therefore, the MoTAC has been working to coordinate activities with the Ministry of Roads and Highways to ensure there is good access to the nation’s key sites. While the Ministry of Roads and Highways is responsible for the majority of expenditure on Ghana’s roads, funds earned from the GTA tourism development levy are also being used to carry out road expansions and upgrades.

Airports

In January 2018 the Ghana Civil Aviation Authority (GCAA) announced a plan to upgrade the airstrips in the country in an effort to improve infrastructure for air travel, thereby providing alternative access routes to some of the most notable tourist attractions. The GCAA indicated that it is planning to build new airstrips at locations including Axim, a coastal town in the south; Bolgatanga, a town in the north located on the border with Burkina Faso; and Cape Coast, the capital of the Central Region and home of the Cape Coast Castle, which is known for its role in the transatlantic slave trade.

Ghana has five airports located in the major cities of Accra, Kumasi, Ho, Tamale and Takoradi. In September 2018 a third terminal was opened at Accra’s Kokota International Airport. Completed at a cost of $250m, the terminal has the capacity to manage 1250 passengers per hour and up to 5m passengers per year. Initially, the terminal has six boarding gates and seven links.

Upgrading Kumasi

With a population of 1.5m, the southern city of Kumasi is the second-largest city in Ghana and the capital of the Ashanti Region. Because of its geographic location further inland from the national capital Accra, and within access of neighbouring Côte d’Ivoire, Kumasi is a key transit city for regional travellers, including cross-border and intercity traders. For this reason, it is home to an additional floating population of up to 500,000 people annually. The city also has a rich cultural heritage and hosts five major cultural festivals annually.

The Ashanti region more broadly is a key area for cocoa and gold production. To capitalise on the city’s location and rich history, the GTA in January 2018 announced its intention to upgrade infrastructure and facilities in Kumasi, with the aim of making it a more appealing tourism destination. Agyeman indicated that the government would provide investment opportunities and incentives for investors in Kumasi, though specific information on those plans has yet to be released. The regional government of Ashanti is advocating for a number of private development projects, including 32 ha of land provided by Otumfuo Osei Tutu II, the monarch of the Ashanti Region, for the development of luxury residences.

Outlook

The government is committed to measures that will stimulate economic growth and job creation, and enhancing the reputation of the country’s tourism industry can help achieve these goals. Significant funding has therefore been committed to developing the sector through investments in infrastructure and skills development.

With hotel capacity set to increase and an increasingly prominent profile in international circles as a safe and investment-friendly destination, Ghana’s tourism sector looks on track to continue growth. For sustained development, however, Ghana must address some key infrastructure bottlenecks. Chief among these is the road network outside of the Greater Accra Region, which must be developed and expanded to improve access to other parts of the country. With a number of key developments under way, the timely and on-budget completion of these projects will be necessary to ensure that the country sees expected returns on its investments.

Source: Oxford Business Group (OBG)

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The primary function of GhanaNewsOnline.com.gh is to gather, process and distribute news about Ghana and Africa to the World. To serve as a News Agency with the mandate to present complete, in-depth objective and impartial information, news, and features rooted in investigative journalism.

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