Being one of the major foreign currency earners for the country, the hotel and tourism industry has been hit hard by the effects of the COVID-19 pandemic. Taking the long-run impact into consideration, the government has included it among the sectors chosen to access loans from the 15 billion birr injected to banks to stimulate the economy.
The National Bank of Ethiopian (NBE) transferred directives for all state-owned and private banks to release loans to businesses so that they withstand the effects of COVID-19.
Ethiopian Tour Operators Association General Manager Kiros Mehari tells The Ethiopian Herald that since the start of COVID-19, tour operators have Been highly affected as most countries have put restrictions on the movement of people. As part of the world, Ethiopia tourism sectors in general and tour operators, in particular, have been seriously affected.
“What makes the situation worse is the peak season for Ethiopian tourism is approaching. It is a time when tourism generates a large amount of hard currency. However, tourists who were planning to visit Ethiopia next December have cancelled their trips due to the pandemic. Hence, tour operators and agencies will lose a significant amount of income.”
Apart from paying office rent, tour operators are expected to pay a salary for their staff and repeatedly shared their concern with the association about how they are going to deal with their expenses, he said.
People in tourist destination areas whose income is totally dependent on tourism have also become severely affected. “We have been collecting data to know how much tour operators have lost due to the pandemic,” Kiros said.
If it takes four to five months to contain the pandemic, it will be hard for the tourism sector to quickly recover from its effects. As the damage may stay here for long, it needs the synergy of all stakeholders to rescue the sector, as to Kiros.
“So far, we have not been informed of companies that reduced the number of employees. But if the government does not take immediate measure to support them, they will be forced to terminate the contracts of their employees,” he said. “Some have requested the government to rent their cars as they are out of service now. At least this will help them to gain some income.”
“Two months ago, we have heard that the government would inject 15 billion Birr fund to banks so that they provide loans to hard-hit sectors by the pandemic. But when we present our request to the banks, their response is that ‘they have not received any directives from the National Bank of Ethiopia (NBE).”
NBE claims that it transferred directives for all state-owned and private banks to release the loans.
In a letter sent to both private and government banks, NBE Deputy Governor Fekadu Degefe asked banks to take measures to ease the severe impact of the COVID 19 pandemic on the hotel and tourism sector.
As to the letter, as part of a six month recovery period scheme, the government has decided for the tourism and hotel sectors to access the fund to support their operational budget with an annual interest rate of not more than five per cent effective as of May 10, 2020.
Out of the total loan to be provided for the sector, some 11 per cent will be allocated to tour operators.
The Ethiopian Herald May 21/2020BY GIRMACHEW GASHAW
