Tourism Regional Multiplier Effects in Tanzania: Analysis of Singita Grumeti Reserves Tourism in the Mara Region

Abstract

<p>The main focus of this study was to establish the economic impacts of a single tourism business operated in a rural area on a regional economy in Africa. This paper presents a case study of the regional multiplier effects of Singita Grumeti Reserves’ (SGR) tourism investment in the Mara region, Tanzania. The recursive Keynesian multiplier approach was used to identify significant economic multiplier effects larger than any other multiplier effects we could find published for relevant, comparable studies (Type 1 average 1.57 from 2008-2013, range 1.24 – 1.81). This result was contrary to economic theory that predicts the multiplier effect in this case should be low given the small area of investment in comparison to the much larger regional economy. In addition, these results represent underestimates, as the multiplier effects established in this study did not factor in substantial positive environmental and socio economic impacts accrued from SGR’s non-profit partner organization, the Grumeti Fund. Consequently, our study findings present compelling evidence that SGR tourism investments, when combined with the Grumeti Fund’s conservation and community development activities, demonstrate a pro-poor economic approach of substantial benefit to the Tanzanian economy. This was possible because the investment made by one private company is relatively substantial in comparison to the limited government services provided to the Mara Region, where nearly half of the 1.7 million people in this region remain in the poverty trap. These results provide compelling evidence that this type of high-value low-volume tourism investment can also contribute to sustainable and equitable socioeconomic development when paired with conservation and community development efforts. This assessment also demonstrates the value of ecosystem services derived from conserving Tanzania’s rich and globally significant natural heritage for the benefit of both people and nature. As there is more tourism potential in Tanzania, Tanzanian government authorities at all levels should consider encouraging and supporting similar tourism investments (i.e., high-value low-volume tourism model). This support could be tailored to providing incentives such as tax rate reduction or exemptions to encourage this specific type of tourism investment. Private investment is particularly important in rural and underserved regions in Tanzania– like the Mara Region – where there have been limited economic investments despite substantial opportunities for economic growth. </p>

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