Tourism and Its Impact on Economic Development

Raphael Nii-Ashitey Trebi, Yuejun Li


The relevant nature of tourism has been clearly found in this study. Tourism is recognized as the developmental factor for an economy. The study therefore chose to conduct the effect of tourism on economic development in Ghana. The study sought to analyze the relationship between tourism and infrastructural development in Ghana. It also examined the relationship between crime rate and tourism in Ghana and analyze the trend of tourism and economic growth in Ghana. The study also focused on examining the effect of tourism on the economic growth of Ghana and finally, analyzed the effectiveness of policy on tourism in Ghana. The study adopted quantitative approach through the use of secondary data from 1990 to 2019. Research analysis used for this study was the instrumental variable and correlation. The outcome of the study suggested that infrastructure development of the economy shows a positive relationship with tourism. It was also estimated in the study that when crime is high tourism tends to be low and vice versa. On the part of the estimation, natural resource was the variable used as the instrumental variable. The outcome from controlled variables such as international trade and exchange rate was found to be positively related to economic growth and development in Ghana. Also, instrumental variable estimation showed that tourism had a positive effect on the economic growth of Ghana. The outcome of the study revealed how the sector had reduced the unemployment rate in Ghana through the provision of both direct and indirect job for its people. The sector however is now coupled with challenges such policy issues and COVID 19 as revealed by players in the sector indicates the overreliance on government. Per the outcome of the study, it was recommended that long term policy should be put in place to ensure that successive government follow to prevent the distortion of the progress of the sector. It is recommended that infrastructure development and tourism should be investigated extensively by focusing on the effect of tourism on economic growth in Ghana.

Keywords: Tourism, Economic Development

DOI: 10.7176/JTHS/60-03

Publication date: March 31st 2022


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