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A NECESSARY TOOL FOR ECONOMIC GROWTH AND DEVELOPMENT
(A CASE STUDY OF RIVERS STATE)
The late 1970s saw the birth of tourism and the government of Rivers State have tried to develop the sector by carrying out festivals such as festac 77, carnival 88, rivifest 93, 94 and 95. A scramble for the benefits of tourism had begun. This study examines the significance of the tourism industry on the economic growth of Rivers State. The analyzing data were obtained from statistical bulletins such as the Rivers State budgets from 1995-2004 and the ministry of culture and tourism budgets also for 1995-2004. Although the research found the impact of tourism in the overall growth of the state to be insignificant; it did not mean that the sector was inefficient rather that it was underdeveloped. Hence some recommendations were made to improve the tourism industry.
TABLE OF CONTENTS
Title Page i
Table of Contents v
CHAPTER ONE: INTRODUCTION
1.0 Introduction-background of the study 1
1.1 Statement of the problem 2
1.2 Objective of the study 4
1.3 Significance of the study 4
1.4 Scope and limitations of the study 5
1.5 Research hypothesis 5
1.6 Method of study and data analysis 6
CHAPTER TWO: LITERATURE REVIEW
2.0 Introductions 7
2.1 Growths in tourism development in rivers state 8
2.2 How tourism can contribute to economic growth 10
2.3 Factors responsible for the demand of tourism 15
2.4 Benefits and challenges of tourism 17
2.5 Negative economic impacts of tourism 19
2.6 Conclusion 20
3.0 Introduction 21
3.1 Sources of data and data collection 22
3.2 Model specification 22
3.3 Formular presentation 23
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 Introduction 25
4.1 Data presentation 25
4.2 Result presentation of the model 26
4.3 Re-statement of hypothesis 26
4.4 Analysis and interpretation of results 26
4.5 Test of significance of the parameter estimates 27
4.5.1 Student first test of the null hypothesis 28
4.5.2 The fishers ratio 28
5.0 Summary 29
5.1 Conclusion 30
5.2 Recommendation 32
Appendix A = Growth rates for rivers state revenue 34
Appendix B = Growth rates for tourism revenue 35
Appendix C = Summary of tourism growth rate 36
Appendix D = Summary of state revenue growth rate 37
Appendix E= Summary of revenues for rives state and the
Tourism sector 38
Appendix F = Table of values for simple regression at 95% confidence 39
TOURISM: A NECESSARY TOOL FOR ECONOMIC GROWTH AND DEVELOPMENT (RIVERS STATE AS A CASE STUDY)
The major interest of an economy is in the diversification of the various sectors of its economy and the efficient production of goods and services that would lead to higher macroeconomic output.
Tourism may be thought of as the relationships and phenomena arising out of the journeys and temporary stays of people traveling primarily for leisure or recreational purposes (Pearce D., 1988).
It can also be defined as a services-based industry comprising of tangible and intangible components. The tangible elements including transport, foods and beverages, tours, souvenirs and accommodation, while the intangible elements involve education, culture, adventure or simple escape and relaxation (Veal A.,J 1991).
Because of its interdependence with other sectors of the economy, it is difficult to analyze and plan for tourism. The lack of reliable statistical data hampers identification of the mechanisms by which tourism generates growth, as well as its potential for development. Yet, in those instances were analysis has been carried out and research has preceded planning, tourism’s priority in competing for scare investment funds has been established in this cases, long-term programs for tourism development have been designed.
Today the tourism sector has proven that the development of its sector would contribute to the three high-priority goals of developing countries, the generation of revenue (income), employment and foreign exchange earnings. In this respect, the tourism sector can play an important role as catalysts in economic growth and development.
Rivers State is not the only state suffering from Nigeria’s neglect of this sector, its poor standards and even worse reputation. While the official Nigeria tourism development corporation (NTDC) describes it as richly endowed with ecological and cultural resources. Nigeria is a dwarf in tourism arrivals, when excluding those having to visit Abuja during one of the ever more frequent conferences held in the capital.
“it will be recalled that the slow pace of development of tourism in rivers state has attributed to the absence of infrastructures and loans facilities to prospective tourism.
Practitioners”, the minister of tourism Chief Ogbeowu told members of the federation of tourism Association of Nigeria (Afro news 12/26/2006).
A major difficulty in defining the boundaries of the tourism sector is to ascertain what investment costs should be ascribed to the development of tourism as it entails the collection of goods and service that are provided specifically to visitors and would not have been provided otherwise.
1.1 STATEMENT OF THE PROBLEM
This study attempts to examine the role of tourism development and its existing and future contribution to revenue generation in Rivers State.
Rivers State is a coastal state located in southern Nigeria; it is bounded by the Atlantic Ocean in the South and East. Rivers State has a lot of historical sights because it played a major role during the slave trade era and as such, it is a major attraction for tourists. It also boasts of large variety of aquatic life, savannah’s for harboring wild life such as hyena’s, elephants, snakes, hippopotamuses etc. located around the Eastern Region of Rivers State are abundant beaches off the coast of Bonny Island, Opobo and Okrika. However, the neglect by past governments in the area tourism has also led to the premature deaths of the tourism sites developed by the first military regime of the state.
Today, developing countries located in Africa, Latin American and Asia are all relying on this sector and past statistical data from these countries have shown a huge progress in this sector as it contributes a huge percentage of their countries revenues, not only that, it also generates employment and has a multiplier effect that cuts through other sectors of the economy. This research is been carried out to show that development of this sector would go a long way in contributing to economic growth and development through revenue generation.
1.2 OBJECTIVE OF THE STUDY
The main objective of this study is to determine the impact of tourism growth on the growth of Rivers State.
ii. To show that tourism can go a long way in solving some of the macroeconomic problems in Rivers State such GDP growth, income distribution, employment and balance of payments.
iii. To determine the factors affecting its growth and how it can be stimulated. In view of tourism’s increasing role in economic development, the factors affecting its performance will be analyzed. An understanding of these factors is crucial to determining the ways in which national and international institutions, NGOs, and other socioeconomic groups can play the most value adding role.
Iv To determine the revenue that will accrue from tourism development in Rivers State.
1.3 SIGNIFICANCE OF THE STUDY
The significance of this study varies because the tourism sector is inter-woven with other sectors of this economy, therefore its significance would be felt in the impact that the industry has on other sectors.
Given the complexity of tourism consumption, its economic impact is felt widely in other production sectors, contributing in each case towards achieving the aims of accelerated development. (ILO, GENEVA, 2001).
Tourism’s major significance is in the area of assisting in solving macroeconomic problems, such as unemployment, balance of payment, disequilibrium, income distribution and GDP growth, the study will show that tourism can and will go a long way in creating a positive impact in the economy.
This study is also directed at proving to all sectors involved in tourism that its neglect would cost the state a great deal of loss in the area of overall development as tourism has been proven to have a ripple effect on the economy, this study will also show that investments in tourism are cheaper and that it would not cost the private and public sectors a large amount of capital.
Finally, tourism is a gift from God and nature and it is worthy to note those countries that were rated as underdeveloped or not having major mineral resources have grown to achieving development status via tourism and my advice is for the Rivers State Government to follow suit.
1.4 SCOPE AND LIMITATIONS OF THE STUDY
The scope of this study covers Rivers State and the towns and rural areas surrounding it that have the potential for tourism. These towns include, Bonny Island, Isaka town, Okrika Island, Dawse Island and Port Harcourt.
A major limitation is the insufficient and inaccurate data collected from state tourism board, the ministry of culture and tourism and the ministry of budget and planning.
This research was also limited by the inaccessible data from tour agencies, hotels, and the internet.
The distance between tourist attractions also hampered the collection of necessary data.
1.5 RESEARCH HYPOTHESIS
H01: There is no significant relationship between tourism growth rate and Rivers State revenue growth rate.
H02: There is a significant relationship between tourism growth rate and Rivers State revenue growth rate.
1.6 METHOD OF STUDY AND DATA ANALYSIS
a. The instrument and type of data are strictly secondary as the Rivers State annual budgets from 1994-2004 were used and the annual budgets of the Rivers State tourism board for the same years were also used.
b. The method of analysis for this research is that of simple regression and the ordinary least square method (OLS) will be applied.