The Nexus of Tourism and Economic Growth in Botswana During the Period of 1995 – 2019

Abstract

This study examined the casual linkages between tourism and economic growth in the Republic of Botswana from 1995 to 2019. This was inspired by the highly claimed potential of tourism on GDP, against a background where literature cautions that causal linkage relationships are not always direct and obvious, but rather country specific and most likely to change over time. Co-integration and Granger causality were used to assess the causal nexus between the variables. The findings supported a unidirectional causal relationship between GDP and tourism (GDP → TOR) as well as a long-run co-integration between tourism and economic growth. The study findings imply that the country’s rich natural resources may be insufficient to propel tourism growth and drive GDP in the absence of a supportive economic environment. Therefore, the study suggests that efforts to support policy and investments should concentrate more on overall economic development than at tourism per se. This would create an environment conducive for attracting and retaining visitors to the country, and thus boost tourism.