International Tourism and Fiscal Revenue Earnings in Nigeria

Abstract

The impact of international tourism on the revenue generation of developing countries has largely been shown to be positive. This is in contrast with the popular view that engaging in tourism is a luxury. This study is designed to investigate the contribution of international tourism in Nigeria to the country’s fiscal earnings during the period 1995 2010. Ordinary least square (OLS) method of regression analysis is used to examine the impact of international tourism on Nigeria’s fiscal earnings. Data were sourced from the World Bank data bank, 2011. This is a validated and reliable source of statistical data involving macroeconomic variables. The results indicate a positive but insignificant relationship between international tourism and fiscal earnings. Accordingly, the null hypothesis was not rejected at a 5 percent confidence level. Fiscal earnings in Nigeria increased with increase in international tourism. It was concluded that international tourism increases fiscal revenue earnings but such earnings are sub-optimized. We therefore recommend among others that there should be deliberate policy actions towards increased funding of the tourism sector through annual budgetary allocations.

Key words: International tourism, tourism receipts, tourism expenditures, fiscal earning, economic growth, inbound and outbound, revenue generation