52-hours till the magic starts

Gareth Stokes, FAnews Online Editor

Assuming you receive this email by midday, 9 June 2010, there are just 52 hours before the 2010 FIFA World Cup ™ magic starts. At 4pm on Friday, 11 June 2010 local team Bafana Bafana will face up to the mighty Mexicans in a make or break Group A fixture. The Johannesburg Soweto Stadium will be packed to the rafters with Vuvuzela-wielding supporters. If South Africa wins they stand a good chance of making it through to the second round.

History supports the seemingly impossible. Although South Africa enters the competition ranked far lower than other Group A contenders Mexico, Uruguay and France, the statistics – going back to 1930 – show that the host nation has never exited the competition in the first round. In fact, the host country has even won the event (28% of the time) or emerged as runner-up (17%). Unfortunately a second round exit is not unheard of.

Building a legacy

Improved patriotism aside, what does the event mean for the country. This is the question Alwyn van der Merwe, director at Sanlam Private Investments, tried to answer in his recent presentation titled 2010 Impact of the FIFA World Cup on South Africa. The event plays out on a global stage sporting nine cities, 10 stadiums, 32 teams and 64 games. It will be viewed by 3.7 million spectators locally and 27 billion television viewers worldwide (though some might watch multiple games).

The tournament couldn’t have come at a better time. Although the global economy was in turmoil through 2008/9 and remains volatile today, we had an opportunity to prepare during a record period of fixed investment spending growth. Fixed investment expenditure was growing in double digit territory in many quarters between 2003 and 2008. “South Africa’s World Cup infrastructure preparation surfed this fixed investment wave,” observed Van der Merwe. And government had no choice but to meet its many construction deadlines.

There’s no doubt the tournament will have a marked impact on GDP. The first benefits have already filtered through in the form of the abovementioned infrastructure expenditure. In the three years prior to 2010 the national government spent some R33bn on World Cup infrastructure, including R12.95bn on transport and R11.7bn on stadiums. An additional R83bn was spent as part of the integrated public transport infrastructure programme. Rail & station upgrade and new bus purchases scooped R25bn – Gautrain (the airport link to Sandton opened to the paying public yesterday) got R20bn, airports R17bn etc. Van der Merwe says the impact of these projects will be felt over the long-term: “If you remove the transport bottlenecks economic activity can take pace at its own pace!”

Spending during the event

The Department of Tourism estimates that the country received 9.9m foreign visitors in 2009. Each of these visitors spent approximately R8 000 during their visit for a total contribution to GDP of some R79.4bn. At 21 April this year Grant Thornton estimated 383 000 foreign visitors would arrive as a direct result of the World Cup event. Although the estimate was 23% lower than previously, the length of stay and average spend per trip is significantly higher. Each rand spent will have a knock-on effect on GDP. And a conservative 1.69 ‘implicit spending multiplier’ suggests the total impact on GDP will be at least R14.9bn, or a 0.56% contribution to 2010 Real GDP.

Love or hate the game there’s no question South Africa’s brand will receive a significant boost during the event. The country will gain invaluable knowledge and experience, inherit an enhanced infrastructure including the first pillars of an integrated public transport system, and have the capacity to host future massive events. Hands up if you’re ready for the first African Olympics! FAnews Online takes this opportunity to wish the national soccer team – Bafana Bafana – all the best in the tournament. Let’s celebrate the tournament today – we can deal with the country’s serious challenges after the 11 July final.

Editor’s thoughts: South Africa put its numerous critics in their place by completing World Cup preparations well in advance of FIFA deadlines. As the final teams touch down at OR Tambo International and settle in to their accommodations there’s no question the event will be a massive success. Has the final frenzy before kick-off left you feeling positive about South Africa? Add your comment below, or send it to gareth@fanews.co.za