State Policies Hampering Tourism Development

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State Policies Hampering Tourism Development

BLANTYRE, Malawi (PANA) - Although the number of tourists visiting Malawi is predicted to rise from 280,000 to half a million by 2005, several policy issues conspire to hamper the development of the sector in the country.

A report by consultants hired to look into problems facing the tourism industry says chances for the industry to have a significant impact on the country's economy are slim because a number of factors conspire against its development.

The tourism, parks and wildlife ministry commissioned a task force comprising several related government departments, including customs and income tax to study ways of diversifying the industry.

The task force further contracted Millennium Consultants, a Blantyre-based consultancy firm, to study how certain policies affect the industry.

Millennium Consultants said in its report to the ministry of finance, a copy of which PANA obtained, that the government is not doing enough to boost tourism in the country.

It said the introduction of a 20-percent surtax on top of the 10 percent tax has made the country's hotels more expensive in the region.

Although the government reduced surtax during the 1997/98 financial year to 10 percent and recommended that imported equipment for the industry should be charged lower duty, the report said the move was defeated when the government introduced taxation on beverages, like wine, and proposed another 10-20 percent service charge.

The introduction of these taxes, the report notes, led to a 30-percent price hike in hotel service of which 4 percent goes to hotel staff levy, 5 percent to the Tourism Training Institute and 5 percent for marketing.

A senior official familiar with the development of the report said these factors render the Malawi tourism industry incapable of competing on both the regional and international levels because it heavily depends on imported materials and food stuff.

''How do you expect to compete with Zimbabwe or South Africa while we are importing chickens from them which we can produce locally?,'' he wondered.

The official said the price of imported food stuffs are five times higher than the original price when they reach Malawi because of the duty and other taxes imposed on them.

To get around the problem, he added, the agricultural sector should be encouraged to produce enough good quality products to support the country's hospitality industry so that a substantial amount of forex can be saved.

He noted that the tourism industry cannot stand on its own since it needs support from a cross-section of other sectors.

''Our infrastructure is very poor and it needs to be developed. Poor roads and telecommunication system discourage tourists from re-visiting the country,'' he stressed.

He said that the government should examine properly the tourism ministry budget proposal before cutting it, thus discouraging the ministry to carry out its mission effectively.

According to Francis Mbilizi, the tourism secretary, more tourists are expected to visit Malawi in the wake of the devaluation of the kwacha, which has made the country a cheap destination.(43 kwacha = 1 US dollar).

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