• Business 7

New visa move ‘misguided’

• 3 Months Ago - 2024-05-29 00:00:00

Cabinet’s decision to introduce visa entry requirements for countries that have not reciprocated its visa exemption gestures could drive tourists away to destinations which provide easy, hassle-free access for foreigners and could hamper job creation in the sector, experts have warned.
“It is troubling that Cabinet decided to introduce restrictions on one of the few sectors that still offers active employment to desperate Namibians. It is short-sighted and fails to consider the consequences for the Namibian economy,” the Economic Policy Research Association (EPRA) said.
Reacting to last week’s statement by the home affairs ministry, EPRA over the weekend issued a statement, titled “Sacrificing Namibian tourism on the altar of reciprocity? A misguided move with severe consequences”.
“Namibia's economy relies heavily on its (currently) thriving tourism sector, which is a major employer, foreign exchange earner and contributor to what little economic growth there is. The imposition of tourist visa requirements on many countries can have a severe negative impact on this vital sector, as it may deter potential visitors from the affected countries and could lead to a significant decrease in tourist arrivals,” EPRA said.

‘Tourist barrier’
Cirrus Capital on Monday issued a report warning that the introduction of visa entry requirements will act as “a barrier to tourists and may disincentivise travel to Namibia, possibly leading them to opt for other countries without visa requirements”.
Following the home affairs statement, EPRA conducted a snap survey amongst 500 Namibian businesses which showed that 91% believe the proposed visa restrictions will harm the tourism industry.
Some 87% of respondents said the proposed visa restrictions will harm the economy in general, while 80% believe that the proposed visa requirements will increase unemployment.
EPRA has called on government to reconsider its decision and engage in constructive dialogue with non-visa reciprocating countries to resolve the underlying issues.

Reciprocity
According to the official statement, Cabinet had “granted authorisation to the ministry of home affairs to introduce an entry visa requirement to countries that have not reciprocated the favourable treatment granted to their nationals when visiting Namibia.”
It added that government has now “deemed it necessary to implement a visa requirement to ensure parity and fairness in diplomatic interactions.”
To this, EPRA reacted: “While Cabinet will no doubt claim that this move is aimed at encouraging reciprocity, and perhaps also earn some (albeit fairly insignificant) additional income for Namibia, it fails to acknowledge the underlying reasons behind the lack of visa reciprocity by some other countries.”
Namibian nationals used to enjoy visa-free travel to both Canada and the United Kingdom, EPRA cited as examples.
However, in July last year, the UK government announced that Namibians would now require a visa to visit, citing a significant increase in asylum applications from Namibian nationals, especially since 2016.

Immigration violation
Canada had already revoked visa-free travel for Namibian nationals in September 2012.
The Canadian government cited several reasons, including security risks associated with the use of different passports, human trafficking (particularly of minors), as well as the use of fraudulent documents.
The most pressing concern, however, was the high number of asylum claims from Namibians, who had the highest rate of immigration violations among African countries, at 81% in 2011. Additionally, 71% of Namibian travelers to Canada sought asylum in 2011.
“It is not clear what Namibia has done to alleviate these concerns,” EPRA said.
“Reciprocity is a complicated process that involves many factors. It is not simply a matter of introducing visa restrictions, and other countries in response lifting theirs. It can lead to a negative economic impact, without bringing about visa reciprocity,” the think tank added.
ERPA said it had issued several reports on government policies which have, since 2016, caused “substantial reduction in investment, hampered private sector growth and resulted in increased unemployment”.
“Instead of addressing these obstacles, which contribute to Namibia being unattractive for foreigners and Namibians alike, Namibia continues to introduce more obstacles,” EPRA said.

Countries affected
Namibia currently has visa exemptions for approximately 55 countries, only 18 of which have reciprocal arrangements with Namibia, EPRA pointed out.
“This means 37 countries could be directly impacted by this decision. It includes countries who make up the bulk of foreign tourists who regularly visit Namibia and spend their hard-earned cash here,” the association said.
Cirrus noted that countries such as Germany, France, the United States and the UK will be affected by the new visa entry requirements.
“Since January 2015, over 70% of tourists have come from affected countries. The affected countries have also increased their contribution to the total number of tourists visiting Namibia,” the analysts added.
Unaffected countries mainly consist of African nations, with South African tourists making up over 60% of visitors from these nations, Cirrus said.
“However, as a percentage of total tourists, South Africans have, over time, made up less of the total tourist arrivals as relatively high inflation in recent years has tightened their travel budgets more so than for those in affected countries,” they pointed out.
“The increased proportion of overseas tourists in the past few years means we are increasingly reliant on easy, hassle-free access for foreigners,” Cirrus said.
EPRA shares their sentiment.
“Many of the targeted countries have been key source markets for our tourism sector, and this move will only serve to alienate them and drive them to other (more visa-friendly) destinations. Some of our regional partners, like Botswana and South Africa, will have fewer visa restrictions. By introducing unnecessary obstacles, Namibia makes itself less attractive, not only on global level, but also regionally,” EPRA said.

Employment
In February this year, government released its latest Tourism Satellite Account (TSA) Report, which showed that the sector generated 57 571 direct jobs in 2022, representing almost 8% of total employment in Namibia. All tourism-related industries contributed about 14.4% of total employment in the country.
Quoting the report, Cirrus said accommodation services for visitors constituted nearly 50% of total tourism employment, with the food and beverage serving industry contributing 30.4%.
“However, several other subsectors support tourism, such as transport, car rentals, travel agencies, and some sports and recreational facilities specifically intended for tourism,” Cirrus added.
According to the analysts, there were 17 082 establishments in these industries, which accounted for 27.8% of all establishments in Namibia. By status of employment, 49.1% of jobs were employees, while the remainder were all self-employed.
“Beyond these figures, indirect employment is also created as the sector has one of the largest multipliers given its linkages to and reliance on other domestic sectors,” Cirrus said.
Using the 2018 Namibian Labour Force Survey - the latest one available - Cirrus pointed out that the accommodation and food services sector is the most female-dominant sector in the country. It is also the second largest female employer in Namibia.
“Tourism helps reduce the high female unemployment rate stemming from rapid entry into the labour force to ‘normal’ levels,” the analysts said.

Economic contribution
The TSA estimates that tourists spent about N$14.8 billion in 2022 - 63.2% of which was spent on accommodation, shopping, road transport, as well as food and beverages.
In terms of activity, game drives accounted for the highest expenditure, at N$756.8 million in total. The average expenditure per tourist was N$2 602. This is assumed to be largely in the North, for example in Etosha National Park, Cirrus said.
According to the analysts, tourism industries added N$14.3 billion to the total gross value added (GVA) of N$206.2 billion in 2022. “This is a total contribution of 6.9% and 7.5% of all GVA by all industries (excluding tax),” Cirrus said.
Investment in tourism, as measured by gross fixed capital formation (GFCF), totalled N$401.8 million in 2022. Of this, N$144.8 million was for fixed assets related to accommodation for visitors, while N$86.7 million pertained to passenger transport equipment for tourism purposes.
According to Cirrus, a further N$29.1 million of GFCF went to other non-residential buildings and structures for the purpose of tourism. Another N$8.2 million was spent on machinery and equipment specialised for tourism.
“However, the impact of tourism goes beyond the direct contribution to the gross domestic product (GDP). In addition to providing hard currency, its linkages boost other sectors such as wholesale and retail, and transportation services,” Cirrus said.

Policy impact
Home affairs’ new visa entry requirements are expected to negatively impact tourism volumes, “which in turn negatively impacts employment creation and demand for goods and services”, Cirrus warned.
“Should the ministry of home affairs ensure the process of obtaining a visa is efficient and hassle-free, the negative impact on tourism numbers could be reduced,” they added.
Urging government to engage in constructive dialogue with non-visa reciprocating countries to resolve the underlying issues, ERPA said: “By working together to address concerns and fostering a more cooperative approach, Namibia can protect its vital tourism sector and maintain its strong ties with key source markets.”
“EPRA therefore strongly urges government to adopt a pro-business, best practice, evidence-based approach when it comes to policy formulation and implementation, rather than recycling half-truths and disinformation for political expediency - which can only lead to economic ruin,” it said.