Community-Based Cultural Tourism
Community-Based Cultural Tourism
Business Model Description
Develop joint venture tourism infrastructure, such as lodges, through agreements with communal conservancies.
Expected Impact
Provide communities in conservancies with sustainable income opportunities, and preserve their natural habitat, through cultural tourism joint ventures.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Namibia: Khomas Region
- Namibia: Hardap Region
- Namibia: Kunene Region
- Namibia: Otjozondjupa Region
Sector Classification
Services
Development need
Namibia faces significant challenges in achieving SDG 1 on No Poverty, with a worrisome decreasing progress being observed (III). This is ascribed to the country's slow economic growth, which has negatively impacted on industrial and investment growth in 2016 and 2017 (I).
Policy priority
Through the National Planning Commission (NPC), the Government acknowledged the role the services sector can play in terms of economic transformation and employment creation in Namibia. The sector accounts for 35% of GDP and 60% of employment in the country (I, II).
Gender inequalities and marginalization issues
72% of the services sector's workforce is female and only 18% is male, signalling a major opportunity for female-led income generation in Namibia (8). Thanks to the sector's labour intensity, an increase in the final demand for services is expected to generate profound multipliers on output, GDP and income (IX).
Investment opportunities introduction
The African Continental Free Trade Area (AfCFTA) identifies five services as priorities, including tourism (VII). This offers major opportunities for Namibia's international standing.
Hospitality and Recreation
Development need
While Namibia has been in economic distress since 2016, the COVID-19 pandemic has amplified an already difficult operating environment, which resulted in an expected economic contraction of 7.8% for 2020. Tourism, hotel and accommodation, and aviation were among the most severely affected parts of the economy (X).
Policy priority
With the aim of attracting investors to communal areas in Namibia, the Harambee Prosperity Plan II seeks to review currently challanging investment conditions and harmonise relevant pieces of legislation in an effort to attract foreign and local investment into some of the most impoverished areas in Namibia, which will result in greater productivity of the communal land (X).
Hotels and Lodging
Pipeline Opportunity
Community-Based Cultural Tourism
Develop joint venture tourism infrastructure, such as lodges, through agreements with communal conservancies.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
Namibians spent a total of USD 450 million on trips within the country in 2015, according to the official domestic tourism expenditure survey (15). The international market is growing as well with Namibia increasingly becoming a tourist destination for nature lovers.
Indicative Return
20% - 25%
Benchmark projects, like the Little Etosha Lodge and the Tjiri Lodge, achieved IRRs of 24.2% and 21.35%, respectively (7, 8).
Investment Timeframe
Medium Term (5–10 years)
No empirical data is available from Namibia; a medium term investment timeframe expected based on regional and continental experiences.
Market Risks & Scale Obstacles
Market - Highly Regulated
Impact Case
Sustainable Development Need
On the World Economic Forum's Travel and Tourism Survey, measuring factors and policies that enable the sustainable development of the travel and tourism sectors, Namibia has traditionally scored poorly with 1.1 out of 7 points (2), recently improving its index to a low 3.3 (9).
Gender & Marginalisation
Social and economic development in Namibia's rural communities lags behind, and cultural tourism is seen as a suitable entry point into greater tourism activities that empower the local population (1).
Expected Development Outcome
Enhanced rural development and increased economic growth from tourist activities (3).
Additional national and international tourists without adding pressure on existing destinations in fragile environments (2).
Improved livelihoods in target regions through direct contractual cash payments to conservancies, salaries for employees, staff training and related benefits, such as payments of cash and in-kind contributions (equipment, donated services, etc.) to village development committees.
Gender & Marginalisation
Primary SDGs addressed
8.3.1 Proportion of informal employment in total employment, by sector and sex
8.5.1 Average hourly earnings of employees, by sex, age, occupation and persons with disabilities
11.4.1 Total per capita expenditure on the preservation, protection and conservation of all cultural and natural heritage, by source of funding (public, private), type of heritage (cultural, natural) and level of government (national, regional, and local/
15.a.1 (a) Official development assistance on conservation and sustainable use of biodiversity; and (b) revenue generated and finance mobilized from biodiversity-relevant economic instruments
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Indirectly impacted stakeholders
Planet
Outcome Risks
Successful projects may attract the interest of "predatory" investors, who would seek to take away benefits from local communities to maximise investment returns.
If not managed sustainably, cultural tourism projects may reach scales that negatively impact on the environment, wildlife and the integrity of the communities.
Impact Risks
Challanging travel routes to sites of community-based projects may limit uptake especially from international tourist.
Uptake at scale from the domestic market requires varied price levels for the tourism projects.
Impact Classification
What
The outcome is likely to be positive, important and intended because cultural tourism develops economic opportunities for conservancies and their inhabitants in harmony with nature.
Risk
While community-based tourism is a proven model, it is highly vulnerable to macro-economic cyclical shocks and must balance scale with long-term sustainability.
Impact Thesis
Provide communities in conservancies with sustainable income opportunities, and preserve their natural habitat, through cultural tourism joint ventures.
Enabling Environment
Policy Environment
Namibian National Policy on Tourism, 2008: Provides a framework for the mobilisation of tourism resources to realise the long term national goals defined in Vision 2030 (4).
Policy on the Promotion of Community Based Tourism, 1995: Encourages the formal tourism sector to cooperate and work with the informal sector towards national development objectives of improved equity, poverty alleviation and sustainable growth (3).
Harambee Prosperity Plan II, 2021: With the aim of attracting investors to Communal Areas, Activity 4 of the economic advancement's goal 2 seeks to review currently challanging investment conditions and harmonise relevant pieces of legislation (X).
Financial Environment
Financial incentives: The Environmental Investment Fund (EIF) is Green Climate Fund GCF) fund to support individuals, projects and communities that ensure the sustainable use of natural resources, including community tourism (13).
Fiscal incentives: A waiver of concession fees payable by conservancies to the state as per the Head Concession Agreement if ownership of the tourism structure being developed fully resides in conservancy (4).
Other incentives: Suggested Incentives as per the National Tourism Investment Profile and Promotion Strategy 2016-2026 include a two-year tax exemption of tourism developers who have a local Namibian equity partnership of 25% minimum (14).
Regulatory Environment
Namibia Tourism Board Act, 2000: Provides for the registration and grading of accommodation establishments, the declaration of any sector of the tourism industry as a regulated sector, and the registration of businesses falling within a regulated sector (10).
Namibia Nature Conservation Amendment Act, 2017: Consolidates and amends the laws relating to the conservation of nature, the establishment of game parks and nature reserves, and the control of problem animals (11).
Ministry of Environment and Tourism (MET): Promotes biodiversity conservation in the environment through the sustainable utilization of natural resources and tourism development for the maximum social and economic benefit of citizens (5).
Namibia Tourism Board (NTB): Namibia Government agency responsible for bringing together both the private and public sector in implementing the national policy on tourism (12).
National Community-Based Natural Resource Management Program (CBNRM): Promotes the sustainable use of natural resources, in a manner that empowers local communities to share the responsibilities and benefits of such projects (6).
Marketplace Participants
Private Sector
Businesses and touristic sites such as Himba in the Kunene Region, Ju'/hoansi San in the Otjozondjupa Region (1), Grootberg Mountain Lodge and Moclair B&B in the Khomas Region and the Mencia's Oms B&B and Exclusive Conference Centre and Guesthouse in the Hardap Region (2).
Government
Ministry of Environment and Tourism (MET), Namibia Tourism Board (NTB), local municipalities and village development committees.
Public-Private Partnership
The Sunref Programme provides green credit lines and technical assistance through the Agency Française de Dédevelopment (AFD) for businesses with partner banks like FNB, Nedbank and Bank Windhoek, including for sustainable tourism projects (15).
Target Locations
Namibia: Khomas Region
Namibia: Hardap Region
Namibia: Kunene Region
Namibia: Otjozondjupa Region
References
- (I) Republic of Namibia, National Planning Commission, 2018 Namibia as a service hub, The role of logistics and financial services in economic transformation, https://www.npc.gov.na/republic-of-namibia-and-european-union-signs-the-national-indicative-programme-2015-2020/?wpfb_dl=331. II) Bank of Namibia, 2020, Economic Outlook August 2020 https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/08/08373957-783f-4c69-ab33-8184eddeb91c.pdf. III) SDG Center for Africa and Sustainable Development Solutions Network, 2019, Africa SDG Index and Dashboards Report 2019, Kigali and New York: SDG Center for Africa and Sustainable Development Solutions Network, https://sdgcafrica.org/wp-content/uploads/2019/06/SDGS_INDEX_REPORT_2019WEB.pdf. IV) Republic of Namibia, National Planning Commission, 2018, Implementation of Sustainable Development Goals, Voluntary National Review, https://sustainabledevelopment.un.org/content/documents/19880New_Version_Full_Voluntary_National_Review_2018_single_1_Report.pdf. V) Republic of Namibia, National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294. VI) Republic of Namibia, Office of the President. 2016, Harambee Prosperity Plan 2016/17 - 2019/20 Progress Report, Goals and Outcomes, https://op.gov.na/documents/84084/572904/HPP+Report+2019/66c2eef8-3b23-45be-bc2c-5e728699057e. VII) International Trade Centre, 2018, A business guide to the African Continental Free Trade Area Agreement. ITC, Geneva, https://www.intracen.org/uploadedFiles/intracenorg/Content/Publications/AfCFTA%20Business%20Guide_final_Low-res.pdf. VIII) Responsible Travel in Namibia, Responsible Travel, https://www.responsibletravel.com/holidays/namibia/travel-guide/namibia-responsible-tourism-issues. IX) Ministry of Environment and Tourism. 2020, Community Based Projects, https://www.met.gov.na/about-met/tourism-and-gaming/276. X) Harambee Prosperity Plan II, 2021-2025, 2021, Republic of Namibia, https://www.met.gov.na/files/downloads/f0b_Harambee%20Prosperity%20Plan%20II.pdf.
- (1) Ministry of Environment and Tourism, September 2016, National sustainable tourism growth and investment promotion: executive summary, https://www.met.gov.na/files/downloads/9f1_Executive%20Summary%20NSTGDS%20and%20NTIPPS.pdf.
- (2) Institute for Public Policy Research. Schade, K. 9 March 2017, Opportunities for a green tourism sector, https://ippr.org.na/publication/opportunities-green-tourism-sector.
- (3) Ministry of Environment and Tourism, 2020, Community Based Tourism, https://www.met.gov.na/services/community-based-tourism/258.
- (4) Ministry of Environment and Tourism, 2008, National Policy on Tourism for Namibia, https://www.met.gov.na/files/files/National%20Policy%20on%20Tourism%20for%20Namibia.pdf.
- (5) Ministry of Environment and Tourism: About Us, https://www.met.gov.na/about-met/about-us/74.
- (6) Ministry of Environment and Tourism, 2013, National Policy on Community Based Natural Resource Management, https://www.met.gov.na/files/files/CBNRM_20Policy%20Approved.pdf.
- (7) Feasibility study on China Travel Agency conducted by promoter; not publicly available.
- (8) Feasibility study on Tjiri Lodge conducted by promoter; not publicly available.
- (9) WEF Travel and Tourism Competitiveness Index 2019, http://www3.weforum.org/docs/WEF_TTCR_2019.pdf.
- (10) Namibia Tourism Board Act, 2000, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=214.
- (11) Namibia Nature Conservation Amendment Act, 2017, Republic of Namibia, https://gazettes.africa/gazettes/na-government-gazette-dated-2017-06-28-no-6344.
- (12) Namibia Tourism Board, https://namibiatourism.com.na.
- (13) Environmental Investment Fund, GCF, https://www.greenclimate.fund/ae/eif.
- (14) National Tourism Investment Profile & Promotion Strategy 2016-2026, https://www.met.gov.na/files/files/Tourism_Investment_Strategy_NTIPPS.pdf.
- (15) Environmental Investment Fund, Sunref Namibia Programme, https://www.eif.org.na/project/sunref-namibia-programme.
- (16) Ministry of Environment and Tourism, Namibia Domestic Tourism Expenditure Survey 2015, https://namibiatourism.com.na/uploads/file_uploads/Namibia%20Domestic%20Tourism%20Expenditure%20Survey%202015.pdf.