Tourism, telecoms defy downward trend

By Luke Anami and Macharia Kamau

Tourism and telecommunications sectors defied the general downward trend to post positive growth during the year, according to the World Bank economic update.

The report attributes toursim recovery to an aggressive marketing, increased domestic tourism and discounting of prices.

"Tourist arrivals to Kenya by air and sea are expected to reach 930,000 by the end of this year, a 40 per cent increase compared to last year," the report says.

"Kenya’s middle level group, which has an expanding appetite for travel as do travellers from other African countries offers the promise of increased arrivals."

According to the report, a positive performance of the sector of four per cent in Africa, which grew against global trends, is partly responsible for the growth.

Telephone usage

"Tourism revenues have thus only increased by 28 per cent, after a decline last year," the report says.

In the telecommunications industry, the report noted increased usage of mobile telephony and the connection of the country to the rest of the world through the undersea fibre optic cables were among the factors that saw the sector sustain an upward growth.

"Telecommunication is becoming not only an important growth sector on its own but has started to create positive spill over effects to other sectors," says the report.

The sector is further expected to play an important role in the overall economy given the increasing interest by businesses to undertake transactions online.

The report says faster internet connectivity through fibre optic cables, which now connect East Africa to the rest of the world, will increase efficiency in the broader economy and has boosted the service export industry like call centres.

The report singles out money transfer services operated by mobile phone operators as among the technological platforms that have had profound effect on the economy and nature of doing business in the country.

"Perhaps the most significant multiplier is in the financial sector through the introduction of ‘mobile money’ with an estimated customer base of 7 million subscribers," said the World Bank.

The country has witnessed 28 per cent growth in Internet connectivity since 2008 and while mobile telephony grew by 35 per cent.

By mid 2009, 17.3 million Kenyans owned a mobile phone, which according to the World Bank translates to a penetration rate of 77 percent among people aged 15 years and above.

Internet users grew to3.6 million as of June this year from 2.9 million in June 2008.