Government is currently conducting a detailed assessment of the 2010 World Cup which should be completed by the end of September, President Jacob Zuma says. According to a report on the iafrica.com site, Zuma told a dinner hosted by the South African Federation of Civil Engineering Constructors at Ellis Park that ’from this review will emerge the lessons that will make us implement our new way of doing things even better in government.’ He said the most visible product of the 2010 FIFA Soccer World Cup is the new infrastructure - roads, stadiums, airports, refurbished hotels and other buildings.
While it is too early for hard data proving the 2010 FIFA World Cup was an economic success, business leaders agree that South Africa scored on several points, notes a Fin24.com report. ’This event demonstrated that Afro-pessimism had been misplaced,’ said Adrian Saville of Cannon Asset Managers while addressing a meeting at the Gordon Institute of Business Science. Gillian Saunders, a director of Grant Thornton Strategic Solutions, estimated that the World Cup had brought in as much as R8bn in foreign revenue. ’It is still too early and there is not yet any hard data,’ she said.
Hosting the World Cup gave the country’s economy a boost of about R9bn, with further growth expected over the next few years as South Africa reaps the rewards of the positive image projected around the globe. The Pretoria News reports that the cash injection of almost R100m is the first estimate to come from Finance Minister Pravin Gordhan and was based on the government’s assessment of the successful hosting of the tournament, spokesman Themba Maseko told a media briefing at the Union Buildings in Pretoria on Wednesday.
It will take three to five years to see the economic benefits of the World Cup, a Human Sciences Research Council academic said on Tuesday. It was however too early to tell how great these benefits would be, Dr Udesh Pillay, said head of research on service delivery at the HSRC. However, he added that the economic benefits had been overstated. ’When compared to the economic benefits that government projected three to four years ago, figures have definitely been overstated.’
South Africa will only directly recoup a fraction of the billions of rand spent on staging the World Cup but should reap long-term economic benefits through the re branding of a nation noted for violent crime. Sport24 reports that businesses in Africa’s biggest economy have reported booming trade, including increased hotel bookings, car rentals and sales of World Cup memorabilia since the start of the soccer spectacular on June 11.
The 2010 World Cup could create up to 50 000 sustainable jobs and for those who secure temporary work the experience gained could be invaluable for getting work in the future. According to Busihness Report, Gillian Saunders, the principal of Grant Thornton Strategic Solutions, said that between 20 000 and 50 000 sustainable jobs could be created in South Africa as result of the World Cup. This is in line with the 50 000 jobs created during the 2006 event in Germany.
The advertising economy in South Africa is set to receive a massive $200m boost this year as brands such as Nike plough millions into targeting World Cup fans, notes a Mail & Guardian report. Nike, which is not an official sponsor of the World Cup, has just unveiled a campaign on Africa’s largest digital advertising screen on a 30-storey building in Johannesburg, which displays messages sent by fans via Facebook and Twitter (#NikeFuture) that will appear alongside digital images of football stars signed to the brand.
The hosting of the World Cup presents an economic turning point for South Africa, says Deloitte Touche Tohmatsu. The Cape Times reports that international communities were not only watching their countries fight for the cup, but were witnessing a South Africa that continued to emerge as a competitive 21st-century economy, the consultancy said in a paper entitled ’2010 World Cup, a turning point for South Africa’.
Tourism organisations blamed the global recession and high airfares for the lower than expected turnout of World Cup tourists. ’We believe that under a different economic climate, demand would have extended to areas outside the host cities and to the wide variety of non-hotel accommodation options available in South Africa,’ said the Federated Hospitality Association of Southern Africa (Fedhasa) and the Southern Africa Tourism Services Association (Satsa) in a joint statement.
One local instititution set to win from the country’s hosting of the 2010 World Cup is the South African Revenue Service (Sars). Fin24 reports that while Sars has granted certain tax concessions on the supply of goods and services relevant to hosting the tournament, foreign soccer players will not be exempt from tax, and measures have been put in place to ensure their taxes are collected.
South Africa, which hosts the 2010World Cup in 50 days, will receive 23% fewer foreign fans for the tournament than originally forecast, though they’re likely to stay longer and spend more, Grant Thornton LLP said. About 373 000 foreigners will attend the world’s most watched sporting event, compared with the 483 000 estimated in 2008, notes a Bloomberg report. The cost of long-haul flights and accommodation has deterred some fans, leading the government to cut its estimate for the number of visitors to between 250 000 and 300 000 from 450 000.
Fifty days before the kick off of the 2010 World Cup global audit and advisory firm Grant Thornton said that the gross economic impact of the event is expected to reach R93bn, with 62% expected to be generated pre-2010, and 38% during the course of the year. According to Business Report, Gillian Saunders, principal of Grant Thornton said foreign tourism will account for 16% of the gross impact. The majority of economic spend comes from the national government’s spend on infrastructure and some operational expenditure.
Government will send 200 Small and Medium Enterprises to the 2010 World Cup in a bid to improve the country’s economy. Speaking at a business seminar at Harvest House International, the Minister of Small and Medium Enterprises, Cde Sithembiso Nyoni, encouraged the people of Bulawayo to fully utilise the opportunity. ’Businesspeople in the city should take up this chance so as to boost their businesses and the country’s economy at large. We are doing all we can to make sure that this is a success,’ said Minister Nyoni.
WC to test stability of Rand currency - 23/03/2010
The rand will probably test its recent highs against major currencies in the weeks running up to the 2010 World Cup and could weaken afterwards, according to Nedbank group chief economist Dennis Dykes. According to Business Report, he said the appreciation ahead of the major sporting event would be due more to ’expectations than actual activity-based currency transactions.’ And the depreciation thereafter would have more to do with ’some growth disappointments in the global economy and, therefore, heightened risk aversion rather than any deterioration in local conditions.’
South Africa could possibly break even on the expenditure of the 2010 World Cup, but only in a best-case scenario, estimates Human Sciences Research Council executive director of the Centre for Service Delivery research programme Dr Udesh Pillay. Engineering News reports that he explains that the country’s expenditure on the event has been R63bn, which is 6,4% of the 2010/11 gross domestic product (GDP). Currently, the only known revenue is R2bn from FIFA and it is estimated that the event’s contribution to the GDP will be 0,5%.
The 2010 World Cup has helped ease the effects of the global economic downturn in the South African transport, communications and media sectors, says information and communication technology (ICT) consultancy BMI-TechKnowledge (BMI-T) enterprise research business manager Lesley-Anne Dos Santos. She said that the economic downturn has had a greater effect on the ICT spend of some industries than on that of others.
While FIFA has promised to give R9bn to global football from the profits of this year’s World Cup, the organisation will pocket over R25bn in total from this year’s showpiece, with little clarity on how much cash South Africa stands to gain from the event. Based on figures from the 2006/07 financial year, the profit from this year’s event promises to be far in excess of what was made during the 2006 World Cup in Germany.
The 2010 World Cup is expected to cause a spike in absenteeism resulting in a hefty R750m price tag for South African employers, but there are things that can be done to combat workers skiving off. According to Toska Kouskos, head of health management solutions at Alexander Forbes Health, one of the inconspicuous costs of the World Cup is the high numbers of people skipping work to watch football.
’What we have seen from other World Cups is that typically one in three workers take a day off during the event,’ Kouskos said in a statement. ’If you add that up, it comes to an estimated loss for the economy of R750m in a four week period over the World Cup.’
South Africa’s economy is expected to grow by 2.3% this year, boosted in part by the 2010 World Cup, after contracting by 1.8% last year, said Finance Minister, Pravin Gordhan. He said earlier forecasts predicted the gross domestic product would grow by 1.5% this year, notes an Insing.com report. The 2010 World Cup, which kicks off in June, has fuelled an overhaul of South Africa’s shoddy infrastructure and helped shore up the economy during last year’s recession, the first in 17 years.
SAs 10 stadiums are ready to host the 2010 Soccer World Cup now the fans need to come to the party, say the organisers. And no expense is being spared to make sure that Africas first World Cup will be a success. The national government will have contributed R11,7bn to the construction of five new stadiums, and the upgrade of five existing stadiums, says Treasury spokeswoman Thoraya Pandy.
The previous finance minister, Trevor Manuel , said in 2007 that R8,4bn had been set aside for stadiums.
There were signs of hope in the South African car sector for modestly better domestic sales in 2010, the National Association of Automobile Manufacturers (Naamsa) said on Friday. It also forecast higher levels of production on the back of continued recovery in demand in export markets. Moreover, the Fifa 2010 World Cup would boost demand in the car rental industry, promote tourism and spending and support further economic recovery, it added. Also reduced cost pressures on the back of the exceptionally strong rand should facilitate stable new vehicle pricing for some time.
The outlook for property for 2010, while still mild, was far better than 2009, auctioneers Alliance Group said Wednesday. In 2010 people will start spending more as the stock market continues to rally and the economic outlook improves, said chief executive Rael Levitt. Keeping the show on the road over the last 18 months of turmoil had been a true test for many developers, brokers and banks . In 2010 the challenge will be to refocus on the long term and what the post-World Cup period will bring. 2010 may well be a tale of two halves, Levitt said, adding that the impact of the World Cup in the first half of the year could not be overestimated.
South Africa’s wine industry expects increased global sales in 2010, although a strong and volatile rand currency threatens its long-term prospects, a senior official said on Wednesday. The sector expects the 2010 soccer World Cup to boost sales hurt by a global economic crisis and weakened economies in key export markets across Europe and in the US, said Su Birch, chief executive officer of Wines of South Africa (Wosa). WOSA represents all of South Africa’s major wine exporters, including Distell and KWV.
Nedbank: Credit demand to rise in 2010 05/01/2010
Credit demand tends to lag improvements in the real economy and will start rising convincingly only in the second half of 2010, Nedbank’s Economics analysts believe.
’However, the low base and some improvement in household demand for credit should mean that nominal growth will resume early in 2010.’ ’The approaching 2010 FIFA World Cup, lower interest rates and more stable employment conditions will help a gradual pickup in credit extended to households. In contrast, companies are unlikely to require much in the way of additional finance,’ the group said in economic comment note.
The Competition Commission’s handling of the fuel industry’s application for exemption from certain provisions of the Competition Act will make for an interesting case study. The industry, through the South African Petroleum Industry Association (Sapia), wants room to enter into agreements and engage in activities that are in contravention of the act. Business Day reports that the oil industry’s application comes shortly after fuel reserves at OR Tambo International Airport dropped to just two days’ worth in August.With the kick off of the 2010 World Cup only months away, SA can ill afford fuel supply security jitters. For the duration of the event, the margin for error for will be minimal.
Next year is likely to see increased government debate and focus on the rand’s value and appropriate level, which may well lead to downward pressure on the local currency, according to a leading economist. According to a Business Report, input from several analysts and economists reveals mixed views of the local currency’s value come the end of 2010, forecast at R7.50-R7.80, R8.00, and R9.00 versus the dollar, with factors including higher inflation, growing risk appetite, the current account deficit and the impending FIFA World Cup set to have a volatile impact on the local currency. Merina Willemse, economist at Efficient Financial Holdings said that despite the rand/dollar exchange rate’s relative strength, it is expected to weaken somewhat throughout 2010.
The 2010 World Cup may sell fewer corporate hospitality tickets than the tournament in Germany three years ago because of the global financial crisis, according to the event’s head of ticketing. However, the failure of international corporations to buy tickets for sport’s most-watched event may provide a cut-price opportunity for South African companies to entertain their guests. Several thousand seats reserved for corporate guests might be released back into the general allocation, said Horst Schmidt. ’We have to consider the development in the financial crisis worldwide,’ said the former general secretary of the German Football Association.
Economic impact of WC under the spotlight 06/12/2009
More than 2.2m additional foreign tourists will visit South Africa between 2008 and 2015, thanks to next year’s 2010 World Cup. FIN24 reports that this is according to Gillian Saunders, a tourism expert at Grant Thornton, which recently announced the latest forecasts about the economic impact of the tournament. If one considers that 2.19m overseas tourists visited the country last year, the World Cup soccer tournament effectively gives the industry an extra year of foreign tourism. She expects the tournament to contribute R55.7bn to South Africa’s GDP, and 415 400 jobs to be created.
The 2010 World Cup is expected to inject R55 billion into the domestic economy, according to the Deputy Minister of Water and Environmental Affairs, Rejoice Mabudafhasi. The deputy minister said the Grant Thorn auditing firm, who had conducted the original economic impact assessment for South Africa hosting the World Cup, had found that not only would the event inject R55 billion into the domestic economy, but also create an estimated 415 000 new jobs.
Organisers of the 2010 World Cup do not expect the world’s economic recession to affect the number of visitors to the tournament. Organising committee chief executive Danny Jordaan told a press briefing on Tuesday that 450 000 foreign tourists are still expected to visit South Africa for the World Cup. ’I expect that the number 450 000 fans for the World Cup should not be adjusted,’ Jordaan said. ’We will remain with that figure for now.’ The tournament’s organisers have sold more than 600 000 tickets out of the 3.1 million available.
