December 28, 2021

Tourism Sector Choking in $96m Debt

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A wooden model of Rwanda’s famous mountain gorillas

Companies and individuals in the tourism sector have not only lost business as a result of the COVID-19 pandemic, but also struggling with debt.

A World Bank recovery plan for the sector shows that operators at different levels are unable to repay loans amounting to $96m.

It also estimated that 90% of tour operators, 99% of travel agencies, 67% for professional conference organisers and 82% of workers are currently laid off.

A survey conducted by Rwanda Chamber Tourism of the Private Sector Federation in April 2020 shows that by the end of March more than 3,800 workers lost their jobs in the tourism industry affecting hundreds of hotel staff and their families, which amounts to more than 10,000 people.

That was when the first national lockdown was implemented, followed by an entire year of a near-collapse of the sector. There are no visitors from outside, and local travel was at its infancy even before the pandemic.

The World Bank review shows that over 100 of cooperatives and small and medium-sized enterprises (SMEs) involved in different activities have also been affected by the lockdown. This includes women cooperatives, teenage mothers, widows and orphans whose daily livelihoods were depending on tourism sector.

In February, the World Bank noted that Government initiated a “swift and robust response” to the pandemic, with the adoption of the Economic Recovery Plan (ERP) estimated at US$900 million over the two fiscal years 2019/20 and 2020/21.

The recovery plan aims to scale up social safety net programs for the most vulnerable, build key infrastructures, and support strategic enterprises, including small- and medium-size enterprises.

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