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Emeka Anokwuru
From June, 2020, when the Coronavirus scourge must have abated, the African Continental Free Trade Agreement (AfCFTA) will become operational, making the continent the world’s largest free trade area involving 55 countries with a population of 1.27 billion people, and a combined GDP of $2.6 trillion. The development is expected to increase trade among African countries that is currently put at a lowly 16 per cent.
A major positive fallout of the development will be a rise in the demand for hospitality services throughout the continent as people travel across national borders to seek business and economic opportunities that Africa’s new status will throw up. The opportunities will be sought by people representing themselves, organizations and countries, thus having huge impact and demand for the hospitality sub-sector of the tourism industry.
Even before the agreement takes effect, hotel’s operators on the continent have embarked on expansion programmes to position them for the expected boom. International and indigenous hotel brands are making efforts to register their presence in every part of the continent, especially in countries where forecasts reveal huge potential for growth of the industry.
In 2017, PricewaterhouseCoopers (PwC) made a forecast of the hospitality industry becoming a key driver of Africa’s economic growth during the period between that year and 2022, and beyond. The firm said the expected growth would result from increase in domestic and international travels within the continent. Apart from forecasting the contribution of the hospitality sub-sector to Africa’s economic growth, PwC said South Africa, Kenya, Mauritius, Tanzania and Nigeria would lead that growth. It said Nigeria would become the fastest growing tourism market on the continent over a five year period up to 2022, with a 12 per cent compound annual increase.
The forecast did not factor in AfCFTA, which received a boost with Nigeria’s signing of the agreement only last year after a long wait that caused uncertainties, which made its takeoff appear shaky. Now, with the certainty of its commencement at the scheduled time, AfCFTA is going to significantly boost the travels by air, land and sea according to the PwC forecast.
The good thing about the impact the world’s largest free trade area will have on the hospitality sub-sector is the fact that there will be opportunities for everybody – from the five-star international and indigenous brands down to local hotels within the two-to-four-star bracket.
“The AfCTA will probably be the best thing to happen to Africa when it comes into operation”, says Damian Iyoho, a Lagos-based development economist quite knowledgeable about Africa’s hospitality industry. “One sector in which opportunities will emerge from the development is the hospitality industry. The continent is going to receive more visitors on business and tourism. Within the continent itself, there will be increase in travels by Africans seeking greater opportunities outside their own countries. And these people will need to stay in hotels”.
He said it was apparently in recognition of the hospitality potential of Africa in the coming years that major international hotel brands have embarked on expansion programmes on the continent, while others have announced plans to do so.
