International Tourists Arrivals in Africa: Do Issues of Good Governance Matter?

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Ennin, Isaac Bentum-
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African Economic Research consortium
Political stability, good governance, and an enabling business environment provide the foundation for tourism growth. Promotion of good governance in Africa, it is believed, has the potential to enhance the image and attractiveness of the continent to international tourists and thereby increase international tourists’ arrivals. However, the issue of good governance and its effect on the demand for tourism in Africa has not been very much explored. This study, therefore, investigates the effect of governance institutions on international tourists’ arrivals in Africa. Annual data from 1996 to 2014 on a panel of 41 destination countries in Africa has been used for the analysis. Two estimation techniques, a fixed-effects panel estimator with contemporaneous effects only, and a dynamic generalized method of moments estimator, are utilized to test the effect of various measures of good governance on international tourists’ arrivals. Both models show strong evidence that good governance matters as far as international tourists’ arrivals and share of Africa in global arrivals are concerned. Good governance institutions promote international tourism in Africa. If African countries are able to attain at least the average score of 36.66 percentile, it will result in a very significant improvement in international tourists’ arrivals and Africa’s share in global arrivals.