World Cup – the ultimate winner is South Africa
By Adrian Clayton, Alphen Asset Management.
I don’t know about you, but I have become a self proclaimed soccer expert. Never short of a view on the strikers, quick to criticize coaches on substitutions and boasting deep insights into defensive patterns, in the past four weeks I have often found myself hotly debating football with equally enthusiastic and learned scholars of this great game. The fact that I have never before this World Cup watched an entire football match and can with confidence say that the same applies to my expert mates is a tiny dollop of detail that we generally prefer to keep to ourselves!
But jest aside, this World Cup and the incredible performance from South Africa as host nation has been an eye opener to all of us at home and crucially to the rest of the world. I never intended to attend a game but was fortunate to be offered a ticket by a colleague to watch Holland versus Cameroon at the Cape Town Stadium.
At the expense of sounding utterly ‘mushy'; not in my wildest dreams did I believe that I could be so enthralled by a game of soccer. But it was not the actual football that did it for me; instead it was the overwhelming sense of pride of being a South African as I witnessed the spectacle unfolding in our own back yard. The atmosphere prior to the game was akin to the wildest parties in Rio-Brazil, yet I saw no evidence of crime, just thousands of foreigners and locals revelling in the moment.
Like a sleek army procession, busses transported smiling fans to the venue and our trains in Cape Town darted from the south, north and east (west is the ocean) like clockwork bringing many locals to the game. Many friends that had not utilized rail in South Africa for two decades marvelled at the efficiency of the system, the police presence and general feeling of complete safety. Out of interest, 56 special courtrooms were established for the month, these courts saw only 194 cases and most of these were petty crimes. As far as the Cape Town Stadium is concerned, it resembled a spaceship, lights ablaze and inside boasted the most modern technology available at any sporting facility around the world.
But now that the event has passed, it is fair to say that the current mood already feels a touch like a severe hangover. But before we get too down on ourselves, it is important for South Africans to be aware of the history of World Cups and to capitalize on historical trends relating specifically to tourism, infrastructure and investment.
With respect to TV viewership, there was an audience of 36 billion that watched the event from beginning to end (billions of people having multiple screen sessions). Germany experienced a boom in tourism post the 2006 World cup. It is estimated by PWC that the 2000 Sydney Olympic Games attracted an additional 1.6m tourists to Australia; this was on top of the 110 000 that attended the actual Olympics. The World Cup became an instant one month advert for South Africa and the way we handled the event turned our country into a global hit. Tourism accounts for 7.9% of SA GDP, it employs 920 000 people and earned the country R79.4bn in 2009. This can be compared to gold mining which is often cited as central to the SA economy, which totals contributes only R47.7bn to GDP.
The money which we spent on infrastructure is likely to give the SA economy a long-term growth infusion. I am not sure we will ever really know the real numbers, but my understanding is that we have spent R43bn on World Cup preparation. Stunning highways with multiple lanes have radically reduced congestion in our cities, the Gautrain has made the tedious trip for business people from OR Tambo to Sandton a pleasure and the bus rapid transport system is something that SA has been desperate for, for decades. Whilst most of the money might have been spent on stadiums and in previous World Cups, like the one held in Japan, only 40% of the stadiums proved economically viable post the event, this has not always been the case however and most stadiums in other countries fuelled football, leading to an explosion of the sport.
This 2010 World Cup has introduced business people to our country and it is difficult to believe that they can be anything but impressed. This is where the possibility of future investments should not be underestimated. External investments into SA last year according to the IMF accounted for less than 20% of GDP as against 26% for Nigeria, 30% for Ghana and 29% for Senegal. Whilst many African nations are for good reasons attracting investments, it is difficult to understand why South Africa does not enjoy a larger slice of the pie. Maybe this will change after we have been on the world’s stage for the past month, let’s hope so!
So, the 2010 World Cup has come and gone but the crucial message for all South Africans is that this event proved that we have what it takes to morph this country into a leading nation. Collective will and a drive to succeed are ingredients that were demonstrated by most citizens for 30 days, we now have to show that we can do it for decades!
Source: Adrian Clayton, Alphen Asset Management, July 16, 2010.
To add to Adrian’s article, here is a picture (courtesy of National Geographic) of Johannesburg at night with the fabulous Soccer City stadium in the foreground.
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