Tourism experts and conservationists in Zanzibar have welcomed new measures targeting irresponsible tourism development, particularly efforts to stop foreign investors from using local citizens to register tourism businesses, as part of broader efforts to protect the island’s environment and local interests.
According to tourismupdate, under Zanzibar’s tourism regulations, the operation of tour companies and tour guiding services is reserved exclusively for Zanzibaris. The Investment Act of 2023, among other criteria, sets a minimum investment capital threshold of US$2.5 million for foreign hotel and real estate investors to qualify for registration and approval. Local investors have much lower minimum thresholds of US$100 000.
The Zanzibar Commission for Tourism (ZCT) said in a January 10 notice that it has identified instances of foreign investors using local citizens as proxies to illegally register tourism businesses and projects.
“Any tourism project or business found to have been registered using a proxy while the actual ownership belongs to a foreigner will be closed immediately and strict legal action will be taken against the person who registered such a project. Such an act is considered economic sabotage under the laws of the country,” said ZCT Executive Secretary Arif Abbas Manji.
Manji called on individuals who were involved, including foreign entities and local citizens being used as proxies, to voluntarily come forward by January 20.
“After this date, a special inspection and law enforcement operation will officially commence and legal action will be taken against any individual or institution found to be involved in such unlawful practices.”
Tackling ‘grey zone’ operations
Role players in Zanzibar’s tourism and conservation sector have voiced growing concerns about allegedly poorly regulated development on the archipelago.
“The grey zones around tourism business registration in the archipelago have quietly eroded the destination’s value for almost a decade,” said Stefano Marra, Founder of Heart of Africa Expeditions.
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“Grey zone operations extract intangible capital from destinations without contributing proportionally to local systems. They undermine legitimate operators, destabilise pricing and, most importantly, they erode the place. Zanzibar’s brand value is commodified by operators who have zero long-term skin in the game.”
Marra said the months following the enforcement actions will be “chaotic”.
“Some operators will panic. Some won’t comply. That’s the cost of course correction. But, if you’re already operating with proper governance, proper partnerships and proper documentation, this notice is your competitive moat. Zanzibar just eliminated a category of competitors overnight and the market will consolidate around quality operators,” said Marra.
Volume-led model unsustainable
Marra pointed out that the explosion of tourism development is driven by a volume-led model.
“There has been a huge boom in conversions to a short-term rental model and hotel development has, in many instances, been characterised by poor and environmentally destructive construction and an escalation of cheap mass tourism,” he said.
“If Zanzibar continues the volume-based model, it will degrade further. Shifting towards regulated, high-capital, high-value tourism requires more planning discipline but it offers a path to regeneration rather than continued extraction,” Marra added.
Conservation concerns
Red flags have been raised about the rapid expansion of development from the archipelago’s main tourism island of Unguja (now home to more than 500 hotels) to Pemba Island and small, environmentally sensitive islets.
Ecologist and Conservation Biologist Tim Caro, who has conducted research in Tanzania for 30 years, claims irresponsible development on Unguja (including roads cutting through protected reserves) sets alarming precedents for further planned projects on Pemba and surrounding islets.
He said the Zanzibar Investment Promotion Authority (ZIPA), the government-appointed body tasked with seeking and approving hotel investors, identified 15 offshore islets for hotel investment – many are home to vulnerable plant and animal species.
On Pemba, he singled out the proposed seven-star hotel project as particularly worrying as it will occupy 17% of the island’s Ngezi-Vumawimbi Natural Forest Reserve – the largest remaining path of old growth coastal rainforest in Zanzibar.
“There is no guarantee that the ongoing environmental impact assessments — one set to be conducted by a company that typically focuses on urban projects — will constitute any kind of block to this development. And there is no indication that the legal necessity to degazette the forest reserve will be a hindrance, judging by the brick building and garage full of new trucks parked nearby,” said Caro.
While Zanzibar’s Tourism Minister Mudrick Ramadhan Soraga has expressed a desire for low-density, high-value tourism centred on eco resorts, Caro said some players are jeopardising this vision.
“The development model needs a fundamental rethink – including shifting the tourism tax to profits rather than bed numbers to incentivise high-end hotels over sprawling bungalow cities. It also requires deeper engagement with communities to understand their real needs and the adoption of proven models of successful eco resorts,” said Caro, identifying Chumbe Island Coral Park, in a coral reef sanctuary and forest reserve west of Unguja, as one of the models to replicate.
ZIPA did not respond to Tourism Update’s requests for comment.
