THE ROLE OF TOURISM IN ECONOMIC GROWTH, THE CASE OF ETHIOPIA

Abstract

Recently, tourism has gained significant strides as a poverty reduction strategy for low income nations, including Ethiopia. However, despite its huge potential the travel and tourism market has yet to develop to a point where it can make a significant contribution to Ethiopia‟s economic growth. Therefore, the objective of this study is to examine the trend and contribution of tourism sector to the Ethiopian economic growth. In order to assess the challenges the sector faces and assists policy makers and planners to understand the same to design appropriate policies. The study has employed descriptive research design, and used secondary data that were collected from the Ministry of Culture and Tourism, National bank of Ethiopia, Ministry of trade, and other sources records and Data. The finding or results shows tourist prefer Ethiopia for enjoyment trip, and also the economic activities performed by the Ethiopian government to attract foreign direct investment (FDI) is encouraging visitors for business visits. On the other hand, even though Ethiopia is rich in historic, cultural and landscape it is one of the least visited country in the world, and the contribution of the sector to the GDP is very insignificant compared to other sectors in the economy. Also the employment rate in this sector is very low. The main challenge the tourism sector is facing until now among many things are shortage of promotion, lack of infrastructure, and quality of accommodation, which is almost the same as other finding on previous studies carried out. As per the result the researcher has recommended policy measures likes having continues public investment in improving infrastructure, investment in physical and human capital, and also suggested ways in improving the promotional activity.