Program Summary

The development objective of this activity is to deepen knowledge and increase awareness of the economic impact of terrestrial/forested protected areas on local and regional economies through nature-based tourism (NBT) that is anchored around these protected areas. The activity will make the case for public investments to improve biodiversity outcomes and support economic development. Finally, it will identify policies, regulations, and mechanisms that are needed to strengthen regional economic impacts, increase private sector investments in and around protected areas (PAs), and to capture the value provided by these ecosystem services to fund protected area management.

Approach

The study was divided into three phases.

Phase 1: Prepare for the study, develop the methodology, and get country buy-in. The World Bank Group (WBG) team collaborated with the University of California, Davis, to develop a general equilibrium approach to predict impacts of NBT, including the spillovers it creates, within local economies as well as its effects on trade between local economies and the rest of the country. The method, known as the local economy-wide impact evaluation – LEWIE, was presented in the virtual concept review meeting of the ASA and peer reviewers were satisfied with the methodology and study plan. The team simultaneously liaised with the World Bank team and the government counterparts in Zambia, specifically the Department of National Parks and Wildlife (DNPW), to get their buy-in for the study, to ensure that the methodology was robust, and to identify a project site(s) that would be representative of the WBG project site in the Eastern Province.

Key outputs:

•            Guidance note on the LEWIE methodology

Phase 2: Implementation of the study: Training, stakeholder engagement and primary data collection. The team carried out a mission in Zambia July 28–September 1, 2019. Primary data collection was a huge undertaking as the team had to get local buy-in from the chiefs and organize the villages and businesses to engage in the survey. The team successfully collected responses across four big survey groups—tourists, tourism businesses, households, and local businesses in markets—enabling the analysis to quantify both the direct and indirect benefits of PAs in local economy. The team was also able to partner with Airlink, the only airline service provider to Lower Zambezi, thus getting a great response for tourist surveys. Details of the survey responses are in the analysis report attached with this template. There was a delay in the obtaining data on government spending on park operations. The team has only recently received this data and will incorporate them in the analysis to estimate the economic return per dollar invested by the government in each protected area.

Key outputs:

•            Study launch with participation from relevant stakeholders in the government, conservation, and tourism sector

Phase 3: Analysis and validation. Spending by national park visitors stimulates trade between communities around the parks and the rest of Zambia. This transmits benefits to other parts of the country. Thus, investments in Zambia’s national parks is a wise one as it can support local economic development while conserving biodiversity.

Key outputs:

•            This case study will be completed along with the larger publication that will be launched at the Convention on Biological Diversity (CBD) Conference of the Parties (COP) in 2020 as a part of the WBG Road to Kunming ASA, to be completed by the end of 2020.

Main findings:

• Visitors to Zambia’s Lower Zambezi National Park spend an average of 47,318 kwacha (US$3,380) for their 3.4-night stay at the park, including transportation to and from the park. Visitors to South Luangwa spend an average of 36,011 kwacha (US$2,572) for 5.8 nights.
• Fourteen percent of households in the communities around Lower Zambezi National Park and 6.4 percent around South Luangwa had wage income from working in tourism-related activities. These activities pay significantly higher wages than other activities.
• Most households around the parks are poor and economically diverse. More than 59 percent have per capita incomes below US$1.90/day. Up to 92 percent grow crops, more than half raise livestock, 10–20 percent fish, 25–30 percent have a business, and up to half have wage employment. Nature tourism, by stimulating local production, has potentially large impacts on these households’ incomes and on poverty.
• Our simulations show that each additional tourist adds 55,403 to 61,925 kwacha (US$3,957–US$4,423) to household real income in the economies surrounding the two parks. Every additional kwacha of tourist spending increases local household incomes by an additional 1.5 kwacha.
• There is a total economic return of 7 kwacha per kwacha the government spends to maintain Lower Zambezi National Park and 27 kwacha per kwacha the government spends on South Luangwa National Park.
• Wildlife causes serious economic losses to crops and livestock in communities around both parks. These losses are significant compared with household incomes but small compared with the total income generated by park visitor spending. However, the households that suffer damage from human-wildlife conflict are not necessarily the ones that benefit from tourism.

Spending by national park visitors stimulates trade between communities around the parks and the rest of Zambia. This transmits benefits to other parts of the country. All these results will help the ongoing WBG ZIFLP in Zambia and the Global Wildlife Program (GWP) Zambia project in strengthening the environment to improve NBT links.

Contribution to development goals:

Thus, this activity makes a significant contribution to the broader development goals:

• It makes the case for protecting PAs as a natural asset that can bring economic value to a local and regional economy by answering questions on the impact of additional tourism on local GDP, production, and employment around a PA; finds the economic return per dollar invested by the government in a PA; and explores the fiscal impacts.
• It helps in understanding the value of investing in nature-based tourism as a mechanism to reduce poverty and improve conservation outcomes by looking at the econometric model and the multiplier effects to find out how the government might increase the local economic benefits and evaluating the restrictions on activities around PAs and how that affects local incomes.
• This study informs policy makers on where they can improve their nature-based tourism offering to generate more value for tourists and for the economy.
• This activity is part of a larger ASA – Assessing the Economic Impact of Protected Areas (Marine and Terrestrial) on Regional Economies (P171044).