Ethiopia has taken a significant step in tourism data analysis by introducing the Tourism Satellite Account (TSA), a framework for quantifying the sector's contribution to GDP, investment, and employment.

In reaction to several decades of a varied approach to measuring the impact of tourism on economies, TSA has been proposed to provide consistent and comprehensive measurements with countries’ own systems of national accounts. The Account helps to monitor the development of the sector in the national economy, measuring both monetary and non-monetary aspects.

The TSA project was an initiative that began over a year ago under the Ministry of Tourism (MoT), alongside a technical committee from the central bank, the Ministry of Planning and Development, Ethiopian Immigration Citizenship Services, and Ethiopian Airlines, while technical backing was provided by the United Nations Economic Commission for Africa (UNECA).

Officials anticipate that the tool will not only pinpoint the direct economic benefits of tourism but also trace its broader economic ripple effects throughout related sectors.

Last week, a high-level inauguration was held at Adwa Victory Memorial Museum with the presence of MoT Minister Nasise Chali where TSA was marked as a milestone. "It will impact and revolutionise how we see the contribution of the sector to the economy," she said, while emphasizing that it will bridge data gaps and boost foreign exchange and investment.

The framework considered incoming, domestic, and outgoing tourism in calculating economic growth. The year 2019 has been taken as a benchmark—a peak period for the tourism sector.

The study has identified a total of 811,000 international and 433,000 domestic tourists registering close to 141 million dollars in 2019. Total gross fixed capital formation was estimated at 949 billion Br with collective consumption of tourism locally assessed at around 3.5 billion Br in 2019. The contribution of tourism to collective consumption was 0.9pc.

According to Tewodros Derbew, delivery unit lead coordinator at MoT and TSA committee member, the country's pioneering TSA will determine tourism's direct and indirect impacts on the economy, facilitate the identification of growth opportunities and challenges, and support evidence-based policy formulation and strategic planning.

He points to a lack of a robust statistical framework to accurately measure and analyse the sector’s economic contributions to growth adding that previously, a proxy used from immigration authorities failed to capture the sector’s economic impact.

"This framework refutes all the previous studies made on the country's tourism contribution," he stated, noting that previous studies have been based on unreliable indicators that have not capsulated the real data.

The principles of national income accounting promulgated in 1993 by the United Nations and other multi-lateral organizations made provisions for satellite accounts. Ethiopia’s first foray, which took a year, consists of analysing in detail all the aspects of demand and the supply of services associated with tourism.

Tewodros stated TSA will determine tourism's direct and indirect impacts on the economy, facilitate the identification of growth opportunities and challenges, and support evidence-based policy formulation and strategic planning.”

"This will serve as a constant framework through the years," he said.

Through the TSA, the ministry has identified tourism's contribution to the country's overall GDP to be 2.7pc, while it has contributed 3.88pc of the nation’s employment.