Inclusive Growth in Tourism-led Growth Hypothesis: Evidence from Nigeria

Abstract

This study investigates the direction of causality between tourism and inclusive growth in Nigeria using quarterly data between 1995Q1 and 2018Q4. The study uses four indicators of tourism; tourist arrivals, tourism receipts and expenditures, and a tourism activity index, generated with the Principal Component Analysis, from the first three indicators. The study employs the Toda-Yamamoto granger causality test. The results validate the tourism-led inclusive growth hypothesis using tourist arrivals and tourism activity index, while the neutrality hypothesis of no causality is accepted for inclusive growth and each of tourism receipts and expenditures. The findings have implications for policymakers in Nigeria. These include promoting tourism, by means of appropriate measures, in the economy in order to create jobs and reduce income inequality and poverty; putting in place measures to reduce corruption to avoid mismanagement of tourist receipts; and making sure that there is a necessary due process towards tourism expenditures.