Journal of International Development J. Int. Dev. 15, 335–351 (2003) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/jid.990 THE ECONOMIC POTENTIAL OF TOURISM IN TANZANIA JOSAPHAT KWEKA, 1 OLIVER MORRISSEY 2 * and ADAM BLAKE 3 1 Economic and Social Research Foundation, Dar-es-Salaam, Tanzania 2 CREDIT, School of Economics, University of Nottingham, Nottingham, UK 3 Christel DeHaan Tourism and Travel Research Institute, Nottingham University Business School, Nottingham, UK Abstract: For sub-Saharan African countries with few evident opportunities to diversify export earnings away from primary commodities, tourism has emerged as an option to contribute to economic growth. This study uses input–output analysis to estimate the economic impact of tourism and assesses its potential contribution for the Tanzanian economy. The results show that tourism has a significant impact on output and incomes, especially taking into account the strong inter-sector linkage effects, although this has not been translated into corresponding employment gains. The tourism sector also contributes to tax revenue and foreign exchange earnings. Overall, tourism is shown to make a significant economic contribution. Copyright # 2003 John Wiley & Sons, Ltd. 1 INTRODUCTION It has long been argued that sub-Saharan African (SSA) countries need to diversify their sources of export earnings away from over-reliance on primary commodities. Very few SSA countries have been successful in exporting manufactures, and this sector offers limited potential for most SSA countries. Given their natural and wildlife resources, tourism is a sector with growth potential; the foreign exchange earnings and increased demand for local goods associated with foreign tourists can contribute to economic growth. In Tanzania, tourism has become a major sector in the economy during the 1990s. Economic policies and government efforts to support tourism have been emphasized for several reasons. First, Tanzania is endowed with various natural resources that form a mainstay of tourist attractions; almost a third of the land area is allocated to natural parks. Second, tourism offers a diversified source of foreign exchange earnings for an economy traditionally dependent on a few agricultural exports. Third, tourism generates many other economic benefits, including incomes, employment and tax revenue, both within the Copyright # 2003 John Wiley & Sons, Ltd. *Correspondence to: O. Morrissey, School of Economics, University of Nottingham,University Park, Nottingham, Nottinghamshire NG7 2RD, UK. E-mail: oliver.morrissey@nottingham.ac.uk