OPPORTUNITIES AND CHALLENGES IN ETHIOPIA’S ECOTOURISM SECTOR: A COMPREHENSIVE ANALYSIS

Abstract

Tourism stands as a pivotal industry globally, recognized for its potential to drive long-term economic development and alleviate poverty. This paper examines the multifaceted impacts of tourism on economic growth, particularly focusing on its contribution to GDP, employment, and foreign exchange earnings. Drawing upon a synthesis of existing literature, we highlight the substantial role tourism plays in the global economy, ranking as the fourth-largest export category worldwide. Through empirical evidence and theoretical analysis, this study underscores the positive correlation between tourism growth and economic advancement, emphasizing its significance as an alternative avenue for fostering development, especially in comparison to traditional sectors like industrialization. Notably, tourism's capacity to generate employment opportunities and stimulate GDP growth emerges as a key driver of economic prosperity, supported by empirical findings from various scholars. Furthermore, we explore the intricate relationship between tourism and foreign exchange earnings, elucidating how these two factors synergistically propel economic expansion. Our findings reveal that tourism's contribution to GDP stands at 9.5% globally, with a significant share in both developed and developing countries' exports, underscoring its pivotal role in driving economic resilience and sustainability. By shedding light on these dynamics, this paper aims to provide policymakers, researchers, and industry stakeholders with insights into harnessing tourism's potential as a catalyst for inclusive economic growth and poverty reduction.