Wildlife Tour - Livingstone [ Biz/ed Virtual Developing Country ]

The Virtual Developing Country is a case study of Zambia. This trip is the Wildlife Tour and it looks at the role of tourism in Zambia.

Livingstone

Tourism in Zambia

Next issue - Tourism in Livingstone >>

Tourism is the third highest earner of foreign exchange earner in Zambia after copper and agricultural products. Tourists come to Zambia predominantly see the famous Victoria Falls, Lake Kariba and the wildlife of its National Parks and Game Management Areas.

1995 1996 1997
Number of tourists visited 163,000 263,986 340,896
Receipts (US$m) 46.7 59.8 75.5

Tourism is less developed than in other Southern and Eastern African countries. Compared with Kenya, Tanzania and South Africa the number of tourists and earnings from tourism are substantially lower.

Foreign tourism represents an export to the Zambian economy and consequently an injection into the Zambian circular flow of income. As such it will have a multiplier effect as the tourists incomes are spent on the hotels, restaurants and tourist facilities. Construction of new tourist infrastructure such as roads and hotels will also have a similar effect on Zambia's national income. However a certain amount of the tourist spending will generate flows of foreign exchange out of Zambia. Foreign tour operators and hotel chains will repatriate profits outside the country. This property income appears as a negative entry to the balance of payments.

Tourism in Zambia
Victoria Falls

The tourist market is perhaps more stable compared to copper and agricultural commodities where the prices on the world markets are particularly inclined to fluctuate. However during times of recession in the countries from where the tourists originate the Zambian tourist industry might be hit badly. The income elasticity of demand for holidays in Zambia is likely to be high, as holidays would be considered luxury items. A decrease in incomes in the tourists' countries of origin would lead to a proportionately larger decrease in the quantity demanded of holidays in Zambia. Zambia's tourist industry would not fare well in a global recession. Particularly when its tourist infrastructure is less well advanced that its competitors.

Next issue - Tourism in Livingstone >>


Related Glossary Items:
Multiplier
Recession
Balance of Payments
Injections
Circular Flow of Income

Related Issues:
The Economic Costs of Tourism
Building Kariba Dam
External Costs of Building Kariba Dam
External Benefits of Building Kariba Dam

Related Theories:
The Multiplier Principle
Measuring the Circular Flow of Income
Income Elasticity of Demand