Brighter 2010 for Kenyan Tourism

The tourism industry stakeholders are optimistic that 2010 may be the best year for the business and Kenyan airlines are gearing up for the challenge.

 In 2007, Kenya recorded some 1.8 million visitors bringing in nearly $1 billion from the tourism industry, but political events in the country which were aggravated by the emerging global financial and economic crisis, led to a slump in tourist arrivals in 2008.

In 2009, with support from Kenya Airways, the Kenya Tourist Board made efforts to rejuvenate the industry by involving 250 travel agents, tour operators, and media representatives to improve the image of the country as a tourist destination.

The results paid off and the industry went close to hitting the 2007 figures. The more conservative sections of the industry still believe that by 2012 the two million visitor threshold will be crossed, while the more optimistic operators hope that this can be achieved in 2011.

With the world economy coming out of recession now almost everywhere, it is thought that realistic to see a new arrival record established in 2010, although the revenue growth may lag behind for a while as the market still depends on a range of special offers to match the marketing and sales efforts of other long-haul destinations.

This in particular applies for beach holidays, while the safari sector - offering a generally unique product with little competition beyond the Eastern African region - might see a return to the per capita revenues from before the crisis.

A joint marketing effort is underway through the East African Community, aimed to promote the five East African countries as one destination with many attractions, may also help the effort, but pending side issues like a common tourist visa permitting the entry to all of the EAC member states must first be resolved before this initiative can truly bear fruit.

Single EAC Currency still has a long way

The East African countries are now taking steps towards integrating the financial sector but have still got reforms to make.

Once single integration is completed, EAC will be the second largest single market in Africa boasting of over 120 million consumers. This market will also require having the EAC interbank and credit markets, the money markets, the equity market, the foreign exchange market, the bond market and the derivatives market.
This means that the East African Countries would have their domestic financial markets but then also have the international financial markets.

"The market in East Africa is one that financial markets will thrive on in order to have a free flowing integrated financial sector," says Paddy Turyamwijuka, the Deputy Director Financial Markets at Bank of Uganda.

He was addressing accountants at the 15th Institute of certified Public Accountants (ICPAU) annual seminar in Entebbe, near Kampala. Taryamwijuka also adds that the EAC has supportive protocols that work and are aimed towards the establishment of financial markets integration.

The Monetary Union Protocol which would lead to one EAC currency and the establishment of East African Central Bank (EACB) is expected to promote the final integration of East Africa.

A single currency would ease travel of citizens and goods, eliminating exchange rate problems, providing price transparency, creating a single financial market, price stability and low interest rates, and providing a currency used internationally and protected against shocks by the large amount of internal trade within the east Africa.

Currently the Monetary Affairs Committee (MAC) of EAC has been established and is mandated to provide the oversight and execute the matters related to financial markets. However for this to yield results the various EAC countries must be able to harmonise their financial sectors.

"Reforms will be required of them in the financial markets sector so that atleast they are at the same level or playing field," Turyamwijuka adds.

"Rwanda has made most reforms more than any other already existing member state of the EAC and the World Bank has ranked the country high in the financial markets reforms," he adds.

Rwanda however is also yet to have a fully operation Securities Exchange as companies still trade over the counter.

Kenya which is the home of the largest economy in the EAC and the largest and most active stock exchange, is ahead in terms of financial markets reform compared to the rest of the countries in the region. It also has a vibrant financial sector.

"Tanzania is not a fully liberalised economy and its financial sector in particular still has some impediments to foreign investors and other monetary activities," he adds.