Sjoe, but wasn’t the 2010 Football World Cup a jol?
There’s no denying that hosting these major sporting events brings the country together, and is a shot in the arm for national morale, but when the dust settles we are often left to pick up the financial pieces.
It’s not just South Africa, of course, because check in on many of the countries who have hosted the Olympics in modern times and you’ll see facilities left in absolute disrepair.
Here’s the good news – according to auditing firm Grant Thornton, South Africa can expect around R27 billion in economic benefits from hosting rugby’s premier event.
Let’s go to the Citizen to crunch the numbers:
Let’s get to the nitty gritty early, what figure are we talking here?
The World Cup will bring in R 27.3 billion in direct and indirect economic spin-offs for South Africa.
How much jobs will it create?
The tournament will create a total of 38 600 jobs – temporarily and permanently.
Who came up with these figures?
Auditing firm Grant Thornton prepared the report after they were commissioned by Saru. It was part of the local governing body’s bid submission. The figures were also independently verified “at the insistence of government”. That’s understandable because government had to provide a R2.7 billion in financial guarantees.
R27.3 billion is a lot of money. How will that figure be broken down?
A detailed summary wasn’t made available but the tournament will generate R11 billion in direct spending in South Africa. An extra R1.4 billion in tax revenue will also be raised. Low-income households will benefit by R5.7 billion.
You mentioned direct and indirect economic impacts. What exactly does that mean?
Grant Thornton has a good way of explaining it:
“For example, direct impact will be the amount that a guest pays for a hotel room. Indirect impact is what the hotel spends buying food for guests during the tournament. Induced impact will be the amounts that the hotel’s employees spend in local shops as a result of their employment with the hotel.”
But previously – like the 2010 Fifa World Cup – South Africa made far more debt than it could bring in. What’s changed?
The key here is that South Africa’s rugby infrastructure is pretty good. There’s no need to build expensive new stadiums because they all complied with Fifa regulations. That means they’ll comply with World Rugby too. Don’t underestimate the bonus of not having to fork out billions for new infrastructure.
It’s that last bit that’s particularly important, because the biggest hangover from the 2010 event is the maintenance and upkeep of those stadiums built specifically for the tournament.
We shouldn’t count our chickens just yet, because there is very strong competition coming from both Ireland and France. Bookmakers have Ireland down as favourites, although those odds narrowed when the South African government confirmed its support and committed the financial guarantee.
2023 seems a long way down the road, but who wouldn’t want to host another World Cup – especially if it brings in the big bucks.
[source:citizen]
