PROJECT 2010 - Preparing South Africa for the 2010 FIFA World Cup™

Project 2010 - A Twenty Ten Media and Marketing Initiative

PREPARING SOUTH AFRICA FOR THE WORLD

Economy

Western Cape fuel tax to be implemented in 2009 - 22/11/2006

The long-mooted fuel tax for the Western Cape aimed at generating additional revenue for the province would only be introduced in the 2009 tax year, finance and tourism MEC Lynne Brown said. Speaking at a media briefing Brown said the province was spending R1.2bn a year from its own funds to repair the crumbling road system and this would be supplemented by funds raised from the fuel levy. According to Business Report, Brown said the province would contribute R112m for the construction of the Green Point stadium to be used during the 2010 World Cup and would also spend R15m on generators and other measures to deal with power outages.

Full story in Business Report

Small business plan blossom ahead of 2010 - 21/11/2006

One in six Gauteng adults, or over a million people, run small businesses and the growing diverse sector accounts for 35% of the province’s employment a survey has found, the FinMark Trust said. According to a Mail & Guardian Online report, the survey, commissioned by the Gauteng Enterprise Propeller and the FinMark Trust, aimed at accurate information and better understanding about the small-business sector. The survey found that 180 000 businesses, almost all registered and employers of an average of five people, were likely to be ’engines of economic growth and employment creation’. BEE awareness was extremely low, only 8% of small business used government-support mechanisms, and only 27% had a plan for engaging the opportunities of the 2010 World Cup.

Full Mail & Guardian Online report

Mbeki in Namibia for economic forum - 21/11/2006

President Thabo Mbeki will be in Namibia for an economic forum. The Star reports that Mbeki and Namibian President Hifikepunye Pohamba will co-chair the 6th session of the SA-Namibia Heads of State Economic Bilateral Forum. Department of Home Affairs spokesperson Ronnie Mamoepa said discussions would include the Trans-Kalahari highway, the Ais-Ais-Richtersveld Transfrontier Park, energy issues, SA Customs Union and Southern African Development Community protocols, and Namibia’s support during the 2010 Fifa World Cup.

Full report in The Star

Major boom on the cards - 20/11/2006

SA’s construction industry will change the face of SA, turning cities into building sites between now and 2014. The Financial Mail reports that after a glaring absence of two decades, infrastructure looms as the next big thing. Its gearing up in coming years will boost the overall pace of fixed investment and will spill over into other sectors and asset classes, says FNB chief economist Cees Bruggemans. Speaking at the annual Bureau for Economic Research conference last week, Group Five CE Mike Lomas said the construction boom was being driven by the R400bn infrastructure spending plan in government’s AsgiSA economic programme ; provision for the 2010 Fifa World Cup; the construction and property industry charters, which commit the industry to enterprise and skills development; and the commodity boom, which has created demand for metals and minerals worldwide.

Tax relief for 2010 - 20/11/2006

When SA football fans basked in the euphoria of us winning the right to host the Fifa World Cup in 2010, little did they know that there was some serious muscle-flexing going on behind the scenes whereby certain tax concessions were granted in order to be awarded the right to host the event. It just goes to show that amongst all the sporting bodies – the FIA (Formula One motor racing), the ICC (cricket), and the IRB (rugby), to name a few – it is the controlling body of the “beautiful game” that has the real clout in world sport. In a MoneyWeb column, Steven Jones writes that ’for no other international sporting event – the Olympic Games included – creates quite the excitement that the football World Cup does. Consider the following – football is probably the most widely played game on the planet. Fifa has more nations as members thereof (204) than the UN (192) does. A cricket or rugby World Cup can boast 10 – 12 teams, of which maybe four or five can truly be classified as world class, whereas a football World Cub can truly claim that the 32 teams that qualified for the finals, after many elimination rounds, are truly the cream of the crop. Getting back to the tax breaks, the concessions for people directly involved with the World Cup are considerable. This concession applies to both the 2009 Fifa Confederation Cup, as well as the 2010 Fifa World Cup, and will apply for the period commencing one week before the event starts, and ending immediately after the closing ceremony of the events concerned.’

SA and Germany trade expected to reach R100bn - 15/11/2006

Trade between SA and Germany is expected to reach 11bn euros, or more than a R100bn by the end of this year, according to Harro Adt, the German ambassador. SABC news reports that Adt was addressing business and media delegates at a media conference in Johannesburg. The ambassador says about 90 000 South Africans benefited from direct employment in the 700 German companies currently operating in SA. Adt says Germany is the largest furnisher to the SA economy and its fourth largest customer. Germany has also pledged to share its knowledge of organising a successful World Cup with SA ahead of 2010.

Full SABC News report

Rasool in Dubai to encourage further Arab investment - 14/11/2006

Western Cape premier Ebrahim Rasool starts a high-powered visit to Dubai today during which he expects to leverage further massive Arab investment for the province and possibly other projects in SA. Business Day reports that Rasool and three members of his provincial Cabinet are visiting Dubai as a precursor to preparing the provincial economic development, environment and public works departments for a development onslaught. Rasool said before departing on a 13-day business mission that will take him to India, Dubai, Saudi Arabia and Turkey, that he would be trying to drum up further Arab investments, as well as assuring Dubai investors that their investment in Cape Town was safe and that the province was on track to meet its commitments for the 2010 Fifa World Cup, by which time the first phase of the V&A should be completed.

Full Business Day report

Finance dismisses Treasury Director-General claims - 12/11/2006

Swaziland ’s acting Finance Principal Secretary Meshack Shongwe has rubbished claims by SA ’s Treasury Director-General Lesetja Kganyago, that the other four members of the SA Customs Union (SACU) were bleeding the SA economy dry. The Observer reports that in the statement, Shongwe said there was no truth in that the SACU money was akin to aid given to Swaziland, Botswana, Lesotho and Namibia. Kganyago was quoted saying that unless the formula for sharing the union ’s revenue was revisited to allow for the disproportionate volume of SA imports compared with the union ’s other members, the infrastructure development ahead of the 2010 World Cup will push their (SA) payments to the union even higher over the next three years, even without an increase in trade in the region.

Full report in The Observer

The solution to KZN’s economic problems - 09/11/2006

KZN might be the land of our ancestors, but what are we doing with it? That was just one of the tough questions posed by Premier S’bu Ndebele at the opening of the Local Economic Development (LED) Conference in Durban. The Witness reports that Ndebele said the conference represents a new era of co-operation and co-ordination between provincial and local government. He challenged all stakeholders to come up with a blueprint for a collective solution to poverty and unemployment. Ndebele said this calls for a completely new approach. Even the smallest patch of land can yield something and, if South Africans do not believe this, then it would be interesting to see what could be achieved if the same land were given to someone from India or China. He invited the mayors of all the municipalities present to tour Cedara Agricultural College and investigate the opportunities science and technology offer for agricultural development.

Too much brawn, not enough brains in SA - 08/11/2006

SA has a unique problem for a developing economy - more muscle than brains. It has more cash than it has quantity and quality of public servants to spend it. That, says National Treasury, is in sharp contrast to economies such as India and China, where education and skill levels among public servants are high. FIN24 reports that government has consistently increased social spending year on year at a higher rate than economic growth. However, good news Budgets aren’t translating into equally impressive expansions in services and efficiency. The Sport and Recreation Department is currently running the highest vacancy rate. Of most concern are those departments crucial to delivering basic services, key to the success of infrastructural projects such as Asgisa and the 2010 Soccer World Cup - including the Departments of Transport, Trade & Industry and Public Works.

Full FIN24 report

US investment in Africa increasing - 08/11/2006

After years of trailing European investors on the continent, American business is now taking a serious look at African investment opportunities. Africast.com reports that US trade with the continent now accounts for approaching 20% of the total, while the European share is falling. After 12 years of democracy, SA - Sub Sahara’s largest economy - wants US investment to help fund its biggest infrastructure boom ever. The country will host the 2010 World Cup, and the soccer tournament means billions of dollars in infrastructure projects which need funding from Wall Street and the rest of the world.

SA under the spotlight in London - 08/11/2006

The SA Trade & Investment Exhibition will showcase SA business to the international audience in London in June next year. MarketingWeb.co.za reports that the two-day event will feature SA, UK and European trade and industry speakers, who will give delegates information about trading in Africa. Auditors Grant Thornton have forecast that the 2010 Soccer World Cup will create 160 000 jobs and that SA’s GDP will increase by R21.4bn.

JSE breaks through 24 000 level - 08/11/2006

The JSE celebrated another milestone, breaking through the 24 000 level as investors continued to find support from rampant resources stocks fed by a weaker rand. Business Day reports that at the same time business confidence seems to have rebounded, buoyed by the booming equity market and an increase in exports, said the SA Chamber of Business (Sacob). ’We have commented before that reasons for a rising PE ratio (investors placing a higher premium on annual earnings) probably include the excellent prospects facing the SA economy leading up to the 2010 Soccer World Cup,’ said Stanlib director of retail investing Paul Hansen.

Full Business Day report

Government and private sector need to work together - 07/11/2006

SA can grow even faster than the 6% targeted if the private sector and government work more closely together, Coca-Cola SA division president David Lyons said. According to a report on the Sunday Times site, Lyons said that the 2010 World Cup presented SA with the opportunity to demonstrate completely that it could match the best in world in preparing for and hosting most prestigious international event in the world. He continued that SA also had a wonderful opportunity to clearly market all its benefits to the international community thereby creating more foreign investment. Coca-Cola SA had already appointed a senior executive to work with both Fifa and the LOC, he said.

Full report on the Sunday Times site

Fuel industry concentrates on keeping festive supplies up - 07/11/2006

While hard-pressed, the SA fuel industry would leave no stone unturned to keep the market supplied over the festive season, Colin McClelland, the director of the SA Petroleum Industry Association, said. According to Business Report, McClelland said that during the third quarter, SA imported more than 1m tons of petrol, diesel and jet fuel from the Middle East and the Far East. There would have been greater problems had the industry not stocked up. Demand had outstripped the ability of the only pipeline to supply Gauteng with fuel, he said. This would remain a problem until the 2010 soccer World Cup.

Full story in Business Report

Complete tax relief for 2010 - 02/11/2006

There will be complete tax relief on imports by Fifa-related organisations in the run-up to the 2010 Soccer World Cup, according to Finance Minister. This is in terms of the the Revenue Laws Amendment Bill introduced to the National Assembly recently. According to a report on the iafrica.com site, Manuel said these organisations could import inventory for sale at designated sites — such as stadiums — with capital goods, consumables and promotional materials ’directly related to the World Cup ... free from import taxes’. ’These temporary amendments to tax legislation should assist Fifa and their partners to host a successful Soccer World Cup,’ he said.

ICC supports 2010 initiatives - 30/010/2006

International Investment Council (ICC) members have expressed confidence that preparations for the 2010 World Cup were on track. The 11th meeting of the IIC was held in Knysna over the weekend and was chaired by President Thabo Mbeki. According to Business Report, the panel of top international business leaders who advise Mbeki on economic issues said they impressed by government’s commitment to the 2010 campaign. They also endorsed the Medium Term Budget Policy Statement which allocated R15bn to the World Cup last week.

Full story in Business Report

Manuel to unveil 2010 ’mini-budget’ - 25/10/2006

SA taxpayers will be given some idea on Wednesday afternoon of the cost of the 2010 Soccer World Cup, Deputy Finance Minister Jabu Moleketi said. According to a report on the iafrica.com site, he was speaking ahead of Finance Minister Trevor Manuel’s unveiling in Parliament of the mini-budget, which revises the government’s three-year spending plan. The mini-budget will take the plan up to 31 March 2010, only months before the opening of the soccer spectacular. ’Tomorrow we’ll begin to know how much has been set aside specifically for 2010,’ Moleketi said. ’So all the resources that will be spent on 2010 in terms of infrastructure, ranging from stadia, supporting infrastructure, roads, as the Minister of Transport has said, and all other infrastructure, will be contained in that budget.’

Soccerex a giant boost to Gauteng’s economy - 24/10/2006

Gauteng has fought off stiff competition from several European and Middle East rivals to win the rights to host the world’s largest soccer exhibition, Soccerex, from 2007 to 2009. Gauteng finance MEC Paul Mashatile said the expected 5000 visitors from around the world would make a substantial injection into the SA economy and the event itself would create numerous job opportunities. Business Day reports that Mashatile said SA had about 7m visitors last year and the tourism industry expected Soccerex to help the figure to grow to 10-million in the years leading up to the 2010 Fifa World Cup.

Full Business Day report

SA soccer scores with Soccerex exhibition - 23/10/2006

Gauteng has pulled off a major coup by securing the rights to host Soccerex for three years leading up to the 2010 World Cup. The Star reports that the exhibition attracts the cream of the world’s football industry, It is regarded as the best forum to network, collaborate and do business with suppliers, manufacturers and key players in the multibillion-rand global football industry. Gauteng MEC for Finance and Economic Affairs Paul Mashatile said Soccerex ’is major exposure for Gauteng as the home of competitive sport. It will put Gauteng nicely on the map. With us hosting the 2010 World Cup, in a sense all eyes are on SA, and once we have events of this nature, it increases the exposure of our country.’

Full report in The Star

All eyes on Manuel’s ’2010 budget’ - 22/10/2006

Finance Minister Trevor Manuel is expected this week to enlarge the 2010 football World Cup budget pie and apportion slices to government departments and host cities. FIN24 report that he presents his mid-year "mini-budget" on Wednesday and he is widely expected to announce an increase in sums budgeted for hosting the sports extravaganza, and provide detail of who will be getting what. Especially closely watched will be the amounts being handed out to the nine host cities for upgrading and building football stadiums, an exercise which football’s world governing body Fifa has projected will cost R8.3bn.

Full FIN24 report

SA unit trust predictions for 2010 - 20/10/2006

Hardly a week goes by without comment on our preparations for the 2010 World Cup. Will our stadiums be ready? Will the new, well-remunerated coach be the answer to Bafana’s woes? But how about trying to predict what the SA unit trust industry will look like by the time the world’s top players descend on our shores? In a column on the iafrica.com site, Nic Andrew writes that ’over the last decade the unit trust industry has grown exponentially, both in absolute and relative terms - and we expect the industry to continue to grow at the expense of the much-maligned life-industry (as well as from segregated private and retirement accounts). Changing demographics (particularly amongst high net worth individuals) is going to catch many industry players off guard. By 2010 nearly 40% of all potential HNW clients will be black. This creates an enormous opportunity for those that position their businesses accordingly.

Read the full iarfrica.com column

Housing remains a major challenge - 20/10/2006

A total of 500 000 houses would have to be built every year to meet the housing department’s own target of eradicating informal settlements by 2014, according to director-general Itumeleng Kotsoane. Currently, the department is rolling out 250 000 housing units a year. The estimated backlog is 2.4m units. ’Bear in mind we are faced with the 2010 (soccer World Cup), all the stadia that are going to be constructed and we are faced with national projects such as Gautrain (and) private sector development across the country,’ Kotsoane told reporters.

Full report in The Star

Housing remains a major challenge - 20/10/2006

Full report in The Star

Private sector called to task - 20/10/2006

A senior government official has questioned the private sector’s readiness to make the most of the opportunities that arose and provide materials needed as SA continues to develop. BuaNews reports that the Head of Policy Co-ordination and Advisory Services within the Presidency Joel Netshitenzhe questioned, amongst others, whether the private sector had what it takes to meet the demand for material in the infrastructure boom expected in the country.’We all know about the infrastructure investment that has been decided upon and the opportunities that derive from this for the private sector. The question that arises is whether the private sector is geared for these opportunities,’ he said.

Full BuaNews report

Tax exemptions for WC included in Bill - 18/10/2006

New provisions providing tax exemptions for the 2010 Fifa World Cup have been included in the draft Revenue Laws Amendment Bill, which gives effect to this year’s national budget proposals. Business Day reports that the new provisions would take retrospective effect from April 1 this year and stipulated that anyone found abusing them would lose them, Parliament’s finance committees was told by SARS officials. After extensive negotiations with Fifa, government signed a memorandum of understanding which included revised tax guarantees. The effect of the tax proposals would be to create a ’tax-free bubble’ which would restrict tax concessions to prescribed areas (stadiums, training sites, the Fifa flagship store) for a limited period before and during the 2010 World Cup.

Full Business Day report

WC focus on unit trust industry - 16/10/2006

Hardly a week goes by without much editorial comment on our preparations for the 2010 World Cup. Will our stadiums be ready? Will the new, well-remunerated coach be the answer to Bafana’s woes? On a slightly less exciting, but no less important note, we try to predict what the SA unit trust industry will look like by the time the world’s top players descend on our shores. Insurance Gateway reports that a strong driver of this growth will be the continued emphasis on consumerism. In a low inflation environment, investors will encounter lower nominal returns and will focus on reducing costs. Undoubtedly, the investment industry will become even more competitive. The asset management environment too will change. Managers will be expected to play a more active role in companies that they invest in. All of the above means that the client should have more choice, cheaper offerings, and greater disclosure. By the time crowds begin the Mexican wave much would have changed for the good in SA’s savings industry yet most of the investment basics will be unaltered.?

Weaker rand and low fuel costs boosts tourism - 16/10/2006

Recent rand weakness and falling aviation fuel costs will increase SA’s attractiveness as a tourist destination, said Investec’s tourism update. Business Day reports that the prospects of SA’s increased popularity among foreign tourists could see the country’s growth of foreign tourist volumes further outstrip global figures this year. Investec said in addition to the rand’s weakness and the lower fuel costs, the country’s international profile was likely to improve ahead of the 2010 Fifa World Cup. The number of foreign tourists to SA last year increased 10.3%, compared with the previous year, while the global figure was 5.5%, down from a 9.9% increase in 2004.

Full Business Day report

Positive credit rating crucial for foreign investment - 09/10/2006

Interest rate hikes, the falling rand, political instability and crime could affect SA’s credit rating - which could be disastrous in the run-up to the 2010 Soccer World Cup. On the other hand, SA’s current A3 credit rating could be improved to an A2 by, among other things, enhancing its image overseas. A better rating would be achievable with intervention from both government and the private sector. According to an allAfrica.com report, a positive credit rating is crucial in attracting foreign investment in the run-up to the world cup.

Full allAfrica.com report

Local industries encouraged to cash in on 2010 - 06/10/2006

Standard manufacturer CBC Fasteners believes that the fasteners industry is relatively buoyant because of the growth in the SA economy from the construction and automotive industries. However, the company is concerned that the country’s largest steelmaker, Mittal Steel, is finding it particularly difficult to satisfy the surging demand for steel across its production range, which has led to rationing by Mittal. Engineering News reports that the potential for growth in the fasteners industry lies in the expansion projects that will contribute to the growth of our economy, which will lead to more job opportunities. ’Local fastener manufacturers must not ignore the opportunities that the 2010 soccer World Cup presents to support the construction industry. ’We also have to develop new engineering possibilities that will encourage the development of small and medium-sized enterprises,’warns CBC financial director Israel Bender.

Full Engineering News report