Lesson Notes By Weeks and Term v3 - Senior Secondary 1
Financial Benefits
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Financial Benefits
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Subject: Tourism
Class: Senior Secondary 1
Term: 3rd Term
Week: 7
Theme: Benefits Of Tourism To A Nation
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This topic explores the significant financial advantages that tourism brings to individuals, communities, and the nation as a whole. Understanding these benefits is crucial for appreciating tourism's role in economic development and for informing policy decisions aimed at harnessing its potential in Nigeria. It connects directly to the economic well-being of Nigerian citizens, from local artisans and small business owners to the national treasury.
Performance Objectives: At the end of this lesson, students should be able to: Identify various ways tourism generates income and wealth within an economy. Explain how tourism contributes to job creation in different sectors.
This section details the primary financial benefits of tourism, providing comprehensive explanations and relevant Nigerian examples. 2.
1. Definition of Financial Benefits in Tourism: Financial benefits in tourism refer to the monetary gains and economic advantages derived from tourist activities within a destination. These benefits accrue to various stakeholders, including individuals, businesses, communities, and the government, through direct and indirect spending by tourists. 2.
2. Major Areas of Financial Benefits: a.
Foreign Exchange Earnings: Explanation: When international tourists visit Nigeria, they exchange their foreign currencies (e.g., US Dollars, British Pounds, Euros) for the local currency (Naira) to pay for goods and services. This inflow of foreign currency increases a nation's foreign exchange reserves.
Significance: A strong foreign exchange reserve strengthens the national currency (Naira), improves a country's balance of payments, and provides the government with the capacity to import essential goods, machinery, and technology that are not produced locally. It reduces dependency on other sources of foreign currency like oil exports. Nigerian
Example: A tourist from the USA visits Lagos, stays in a hotel, buys souvenirs at Lekki Arts and Crafts Market, and pays for a guided tour to Badagry. All these transactions involve converting USD to Naira, contributing to Nigeria's foreign exchange earnings. b.
Job Creation: Explanation: Tourism is a labour-intensive industry, creating a wide range of employment opportunities across various skill levels. These jobs can be direct or indirect.
Direct Employment: Jobs directly related to tourist services. Examples include hotel managers, chefs, waiters, tour guides, drivers, receptionists, travel agents, airline staff, park rangers, and souvenir shop attendants.
Indirect Employment: Jobs created in sectors that support the tourism industry. Examples include farmers supplying food to hotels, construction workers building resorts, craftspeople making souvenirs, laundry service providers, security personnel, and suppliers of hotel amenities.
Significance: Job creation reduces unemployment rates, improves living standards, and empowers individuals and households financially. It provides opportunities for both skilled and unskilled labour, fostering economic inclusion. Nigerian
Example: The development of a resort in Calabar creates direct jobs for locals as hotel staff, cleaners, and entertainers. Indirectly, it stimulates demand for local farm produce, construction materials, and transport services, creating jobs for farmers, contractors, and transporters. c.
Government Revenue (Taxes and Levies): Explanation: Governments derive significant revenue from tourism through various taxes and levies imposed on tourist-related activities and businesses.
Value Added Tax (VAT): Charged on goods and services purchased by tourists (e.g., hotel stays, restaurant meals).
Hotel Taxes/Levies: Specific taxes on hotel accommodation.
Airport Taxes/Departure Taxes: Fees paid by passengers for using airport facilities.
Visa Fees: Payments for entry permits for international visitors.
Income Tax/Corporate Tax: Taxes paid by tourism businesses and their employees on their earnings.
Licensing Fees: Fees for operating tourism-related businesses (e.g., tour operators, hotels).
Significance: This revenue provides funds for government to invest in public services such as infrastructure development (roads, airports, electricity), education, healthcare, and social welfare programs, benefiting the entire population. Nigerian
Example: Tourists paying VAT on their accommodation in Abuja, airport departure taxes at Murtala Muhammed International Airport, and entrance fees to national parks like Kainji National Park directly contribute to the Federal and State governments' treasuries. d.
Infrastructure Development: Explanation: The growth of tourism often necessitates and spurs the development and improvement of essential infrastructure. Governments and private investors are incentivized to build and upgrade facilities to attract and accommodate tourists.
Examples of Infrastructure: Improved roads, airports, seaports, public transportation systems, water supply, sanitation, telecommunications, electricity grids, and healthcare facilities.
Significance: While primarily serving tourists, these infrastructural developments also benefit local residents, improving their quality of life, facilitating local trade, and attracting other forms of investment. Nigerian
Example: The development of new tourist sites in remote areas might lead to the construction of better access roads, expansion of electricity supply, and improved internet connectivity, which also serve the needs of the surrounding communities. The upgrade of Akanu Ibiam International Airport in Enugu partly caters to increased tourist traffic. e. Support for Local Businesses and Small and Medium-sized Enterprises (SMEs): Explanation: Tourists' spending directly boosts local economies by creating also benefit local residents, improving their quality of life, facilitating local trade, and attracting other forms of investment. Nigerian
Example: The development of new tourist sites in remote areas might lead to the construction of better access roads, expansion of electricity supply, and improved internet connectivity, which also serve the needs of the surrounding communities. The upgrade of Akanu Ibiam International Airport in Enugu partly caters to increased tourist traffic. e. Support for Local Businesses and Small and Medium-sized Enterprises (SMEs): Explanation: Tourists' spending directly boosts local economies by creating demand for products and services offered by local businesses.
Examples: Local restaurants, craft shops, souvenir vendors, local guides, transport operators (taxi, tricycles), entertainment providers, farmers (selling produce to hotels), fishermen, and local artisans.
Significance: This stimulates economic activity at the grassroots level, empowers local entrepreneurs, reduces capital flight, and helps distribute wealth within the community. Nigerian
Example: A tourist visiting Erin-Ijesha Waterfalls purchases local snacks, drinks, and handmade souvenirs from vendors around the site, directly supporting their small businesses and families. Local tour operators providing transport to these sites also benefit significantly. f.
Increased Income for Individuals: Explanation: Beyond formal employment, tourism creates opportunities for individuals to earn income through various informal and entrepreneurial activities.
Examples: Selling goods (fruits, crafts), offering informal guiding services, renting out rooms or homes (short-term rentals), performing cultural dances, and providing specialized services to tourists.
Significance: This provides additional income streams for families, particularly in rural or semi-urban areas with tourist attractions, enhancing their economic resilience. Nigerian
Example: A local woman in Badagry offering traditional meals to tourists or a cultural troupe performing for visitors at a festival like Calabar Carnival directly earns income from tourist patronage. g.
Investment Opportunities: Explanation: The potential for financial returns in a thriving tourism sector attracts both domestic and foreign investment.
Examples: Investment in new hotels, resorts, theme parks, travel agencies, transportation fleets, restaurants, and development of new tourist attractions.
Significance: Investment brings capital, technology, and expertise, leading to further growth, job creation, and modernization of the tourism infrastructure and services. Nigerian
Example: A foreign hospitality chain investing in building a luxury hotel in Abuja or a Nigerian entrepreneur establishing a new eco-tourism lodge in a national park represents direct investment stimulated by the prospect of tourism returns. h.
Regional Development and Rural Upliftment: Explanation: Tourism can catalyze development in regions that might otherwise be economically marginalized, especially rural areas rich in natural beauty or cultural heritage.
Significance: It helps to diversify the local economy, create opportunities outside of traditional sectors (like agriculture), reduce rural-urban migration by providing local jobs, and improve living conditions in underdeveloped areas. Nigerian
Example: The establishment of community-based tourism initiatives around natural sites like Ngwo Pine Forest in Enugu State can bring economic benefits and development to the surrounding villages, preventing their decline. --- Teacher Activities: Introduction (10 minutes): Teacher initiates a discussion by asking students: "Imagine a group of foreign tourists visits your community or a popular Nigerian tourist site. How do you think their presence puts money into the local economy?" Teacher encourages brainstorming and records student responses on the board. Teacher introduces the topic "Financial Benefits of Tourism" and explains its importance to Nigeria's economy. Concept Explanation and Elaboration (30 minutes): Teacher systematically explains each major financial benefit (Foreign Exchange, Job Creation, Government Revenue, Infrastructure Development, Support for Local Businesses/SMEs, Increased Income for Individuals, Investment Opportunities, Regional Development) using the detailed explanations and Nigerian examples provided in Section
2. Teacher uses visual aids (pictures of Nigerian tourist sites, hotels, local markets, airports) to illustrate the points. Teacher ensures clear understanding of technical terms like "foreign exchange" and "SMEs." Group Activity (20 minutes): Teacher divides students into small groups (4-5 students per group). Teacher assigns each group a specific Nigerian tourist attraction (e.g., Yankari National Park, Olumo Rock, Calabar Carnival, Idanre Hills). Teacher instructs each group to identify and list at least three specific financial benefits that tourism to their assigned attraction would bring to the local community and the state. Teacher moves around to monitor group discussions and provide guidance. Group Presentation and Discussion (15 minutes): Teacher invites each group to present their findings to the class. Teacher facilitates a whole-class discussion, comparing and contrasting the benefits identified by different groups, and reinforcing the key concepts.
Wrap-up and Summary (5 minutes): Teacher summarizes the main financial benefits of tourism, reiterating their importance for Nigeria's economic growth and development. Teacher addresses any lingering questions.
Student Activities: Participate in the initial brainstorming session and share ideas on how tourism generates money. Listen attentively to the teacher's explanations of key financial benefits, taking notes as required. Engage in group discussions, contributing ideas and working collaboratively to identify financial benefits for their assigned Nigerian tourist attraction. Present their group's findings to the class. Participate in the whole-class discussion, asking questions and offering insights. --- The teacher should guide students through these questions after the main content delivery, providing explanations for each step.
Question 1: A foreign tourist pays N200,000 for a week's stay at a resort in Obudu Cattle Ranch. Explain one direct financial benefit this transaction brings to Nigeria.
Solution 1: Financial Benefit: Foreign Exchange Earnings.
Explanation: When the foreign tourist pays N200,000, they would have converted their foreign currency (e.g., US Dollars) into Naira. This directly brings foreign currency into Nigeria, increasing the nation's foreign exchange reserves. This foreign currency is vital for funding imports and strengthening the value of the Naira.
Question 2: Identify and explain two types of jobs created in the tourism sector, distinguishing between direct and indirect employment, using an example from a Nigerian context.
Solution 2: Direct Employment: A tour guide at Olumo Rock in Abeokuta, Ogun State, directly interacts with tourists, providing information and ensuring their safety. Their job exists solely due to the presence of tourists.
Indirect Employment: A farmer supplying fresh produce (e.g., yam, vegetables) to hotels and restaurants in Abuja that cater to tourists. While not directly interacting with tourists, their livelihood depends on the demand created by the tourism sector for food services.
Question 3: How does the Nigerian government financially benefit when international tourists visit the country and spend money? Give a specific example.
Solution 3: Government Benefit: Increased Government Revenue (Taxes and Levies).
Explanation: When international tourists spend money, a portion of that spending goes to the government in the form of various taxes and levies.
Example: When a tourist stays in a hotel in Lagos, they typically pay Value Added Tax (VAT) and potentially a hotel levy on their accommodation bill. These taxes are collected by the hotel and remitted to the state and federal governments, providing funds for public services and infrastructure development. Similarly, visa fees paid by international tourists contribute directly to government revenue. ---
Community Development: Students can relate financial benefits to tangible improvements in their own communities. For instance, revenue from a local festival that attracts tourists might be used to renovate a community hall, provide scholarships, or improve local markets. A teacher could ask students to research a local cultural festival (e.g., Argungu Fishing Festival, Eyo Festival) and discuss how it generates income for the local community and state government.
Entrepreneurship and Local Economy: The lesson highlights potential business opportunities for young Nigerians. Students can identify gaps in local tourism services (e.g., lack of quality local souvenirs, organized tours for specific attractions, authentic food experiences) and consider how they could establish a small business to tap into these opportunities, thereby contributing to the local economy and creating employment for themselves and others.
National Economic Diversification: Teachers can link tourism's financial benefits to Nigeria's broader economic goals of diversifying away from over-reliance on oil. Understanding how tourism generates foreign exchange and creates jobs helps students appreciate its strategic importance in building a more resilient and balanced national economy. This can be integrated by discussing the government's efforts to promote tourism as part of economic diversification plans. ---