Although the Bank of Namibia estimates that tourism contracted in 2015 by 4.6 percent, primarily due to fears of Ebola on the African continent, international tourism to Namibia appears set to rebound due to depreciation of the Namibian dollar against the US dollar. The Federation of Namibian Tourism Associations (Fenata) reports that tour packages in January 2016 were 25 to 30 percent cheaper than in January 2015. At the same time, the Hospitality Association of Namibia says it has observed an increase in forward bookings.
This, says Development Bank of Namibia (DBN) Senior Communication Manager Jerome Mutumba, signals that the time is ripe for further investment in tourism infrastructure and operations.
Mutumba points to the findings on Namibian tourism by the World Travel and Tourism Council. He says in 2014 the council found that tourism accounted for approximately 24 000 direct jobs and contributed to a further 78 000 indirect jobs. He said the council expects Namibian tourism to grow by 8.8 percent annually until 2025, reaching a direct contribution of 5.2 percent to GDP in 2025, with an indirect contribution of 21.6 percent in the same year.
In light of this, he says, institutional support for tourism is of great importance, and DBN’s focus on provision of finance to the tourism industry, as one of the key focal sectors for NDP4, will play a vital role in developing the tourism sector.
Talking about DBN’s track record in tourism, Mutumba observes that the bank has developed strong capabilities in the sector, which include provision of finance for large accommodation establishments such as The Delight in Swakopmund, as well as lodges. In addition to this, he notes that the bank has also provided finance for tour operators and restaurants.
He says that in addition to finance for construction of new establishments or new capacity, the bank can also provide finance for assets such as vehicles and lodge infrastructure, and augment requirements with operating capital.
On the topic of availability of finance, Mutumba says that the bank is aware of difficulties faced with the high and low season, and that the bank tailors finance to seasonality. He says that the bank requires a clear business plan, as well as forecasts that show the viability of finance.
In terms of opportunities, Mutumba says that in addition to the wealth of opportunities in the private sector, the bank believes that there are definite opportunities to grow tourism in conservancies. These can range from finance for PPPs with communities, to lines of credit and guarantees for communities.
In this regard, he says that the bank has observed that PPPs in conservancies lead to a host of benefits that extend far beyond employment. Associated developments, he says, include better health and education, as well as income-generating opportunities from small retail outlets, community guiding and other micro-enterprises.
Tourism is a mainstay of Namibia’s economy, Mutumba says, adding that it has still to reach its full potential. The bank, he says, extends a hospitable welcome to the Namibian tourism industry.