Abstract

Malawi has very few but highly attractive tourist centers and with the concerted efforts of government, tourism is becoming an essential part of the country’s economy. The World Travel and Tourism Council (WTTC) in 2017 envisaged a growth of 4.9% per annum for period of 10 years for the Malawian tourism industry. In view of this, the study focuses on empirical investigation of the contribution of the fairly developing tourism sector to economic growth in Malawi. The popular time series data for the period spanning from 1985 to 2015 was analyzed with econometric STATA package. The findings reveal a no causality and negative long-run relationship between tourism development and economic growth. Meaning that neither the Tourism-Led Economic Growth (TLEG) hypothesis nor the Economic-Driven Tourism Growth (EDTG) hypothesis is confirmed for Malawi. This study provides sound policy recommendations on increasing investment in infrastructure and tourist centers for the sake of boosting tourism activities in the country though there is insufficient data leading to econometric omission such as economic freedom index and tourism related investment which were potential variables.

Keywords: Tourism development, Economic growth, Human Development Index (HDI), TOAR, STATA, World Travel and Tourism Council (WTTC)