DIGITAL ECONOMY AND TOURISM GROWTH IN SUB-SAHARAN AFRICA

Tourism in Sub-Saharan African nations holds significant potential to drive economic growth. However, unstable economic growth, inadequate infrastructure, environmental degradation, and exchange rate volatility hinder the trajectory of tourism growth. Moreover, the digital economy’s role in transforming tourism dynamics is an emerging destination in the SSA. Therefore, to gain a focused understanding of how these macroeconomic factors, i.e., economic growth (EG), infrastructure (INF), environment (ENV), digital economy (DGE), and exchange rate (ER) affect tourism in the top 5 tourist SSA nations is vital for crafting sustainable and inclusive growth tourism strategies. We employed the novel Method of Moments Quantile Regression (MMQR) to estimate heterogeneous effects at short-, medium-, and long-run quantiles for the period from 1995 to 2023. Additionally, we utilized the Dumitrescu and Hurlin panel causality test to assess causality. The MMQR estimates evidenced that economic growth and the digital economy have a favorable impact on tourism at all quantiles. The favorable effect across short-, medium-, and long-term quantiles can be attributed to higher disposable incomes and better access to digital platforms that facilitate travel planning, information dissemination, and service delivery. However, the rise in environmental degradation and higher exchange rates has a detrimental effect on the tourism industry. Environmental degradation reduces the aesthetic and ecological value of tourist destinations. Higher exchange rates make travel more expensive, reduce purchasing power, and discourage international travel. The practical implications include prioritizing economic development, allocating resources to digital transformation, and adopting thoughtful tactics for environmental sustainability. Policymakers should consider the complexities of exchange rate swings, which may create inflationary pressures from currency depreciation.