Is tourism a key sector in Tanzania? Input-output analysis of income, output, employment and tax revenue

Abstract

In most developing countries endowed with significant tourist attractions, tourism has emerged as a new impetus for economic growth, given its ability to generate foreign exchange and employment. This study uses input-output analysis to estimate the economic impact of tourism and assess whether it is a key sector for the Tanzanian economy. The findings show that tourism has a significant impact on output, which is due to its strong inter-sector and linkage effects. The income impact of tourism is insignificant, presumably due to low value added in production. However, tourism is identified as a key sector in the economy, which attests its potential to enhance economic growth.