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BY
EKUS SINGH
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INTRODUCTION
South Africas airports and borders have been busy over the last few weeks as hundreds-and-thousands
of visitors stream into the country for the 2010 FIFA World Cup.
According to the South African Department of Home Affairs, 682,317 foreigners entered into the
country between 1 June and 21 June 2010 compared to the arrival of 541,065 during the same period
last year. Over and above visitors from neighbouring countries, the largest number of foreign arrivals are
from the United Kingdom, USA, Germany, Australia, Mexico, Brazil, France, Netherlands and Argentina.
As the action heats up on the pitch, with the next round soon to start, this influx is only set to rise, with
major benefits for the future of South Africas tourism industry.
From a tourism perspective the World Cup has been fantastic exposure for South Africa, said
Thandiwe January-Mclean, CEO of SA Tourism. The World Cup has afforded South Africa the
opportunity to do away with stereotypes. Overall, the response from visitors has been one of surprise.Surprise at our infrastructure development, at the excitement of match audiences. All our feedback has
been positive, people are extremely excited.
SA Tourism is confident that the World Cup will open up the country to a whole new spectrum of
visitors.
The 2010 FIFA World Cup has seen an increase in visitors from new countries, namely the Latin
American nations such as Mexico and Brazil. This has been coupled with the implementation of the
international FIFA Fan Fests, at which over 900,000 people have been in attendance since the start of
the tournament. The highest television audience and international fan-fest attendance has been in
Mexico. We are promoting South Africa in those Fan Fests, said Roshene Singh, the chief marketing
officer of SA Tourism.
There will be new market opportunities after this tournament. With our track record of hosting major
events, sports tourism is important to South Africa. We are not relaxing, we are continuing with our
campaigns to convert awareness into visitors, continued Singh.
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One of the biggest talking points around large sporting events is the revenue generated from visiting
fans, and SA Tourism is confident that the tournament will be a success from a tourism revenue
perspective. We only have estimates at this point, but we are looking at around R27 billion, almost a
thousand percent of what we spent on marketing, said Singh.
Last year the South African economy benefitted from R100 billion in tourism spend. Globally tourismnumbers took a dive in 2009 - internationally there was a 4% decrease in tourism but South Africa
managed a 3.7 per cent increase. Although we have no official figures yet, we are confident we have
met the numbers we projected for the World Cup, said January-Mclean.
South African accommodation figures are also looking promising, with 65 to 70 per cent occupancy rates
in Johannesburg, while Cape Town and Durban are looking closer to 85 per cent. We will see an
increase in movement as we reach the knock-out stages, said January-Mclean.
South Africa is home to 6% of Africa's population, and produces 18% of the continent's gross
domestic product. It also boasts 45% of Africa's mineral production and 50% of the continent'spurchasing power.
The country's economic growth averaged 3% from 1994 to 2004, an improvement on the
average of 1% in the decade before 1994. Since 2004, growth has exceeded 4% per year,
reaching about 5% in 2005.
With the faster growth rate has come rapidly improving employment creation. In the last year
measured (to September 2005), around 540 000 net new jobs were created. Inflows of foreign
capital have been exceptionally high since 2003 - R80 billion (about US$13 billion) came into
the JSE share market between the beginning of 2005 and the first quarter of 2006.
Macroeconomic strategy
Since democracy, South Africa's economy has been subject to a process of structural
transformation. Policies seeking to promote domestic competitiveness, growth and employment
and increase the outward orientation of the economy have been implemented.
Government has also embarked on a programme of fiscal reform to restructure government
expenditure towards social services that will contribute to a better quality of life for all South
Africans.
In South Africa, the central bank maintains its independence from government. The bank has
embarked on a programme of inflation targeting, which has had positive outcomes; the realinterest rate has stabilised and the currency is able to fluctuate at competitive levels.
Business confidence now stands at a 13-year high, having followed a cyclical upswing since the
political reforms of 1994. All key macroeconomic indicators have improved over the past decade
and, since 1994, South Africa has experienced a surge in the registration of new businesses.
A sound environment
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The cost of doing business in South Africa.
South Africa's energy costs are among the lowest in the world. Eskom supplies most of Africa
with electricity, and is known for its superior supply quality. South Africa also compares
favourably in terms of petroleum prices. Private sector and multinational oil companies refine
and market nearly all imported petroleum products in southern Africa.
Telecommunications are becoming increasingly competitive, with the partial privatisation of the
telecommunications service-provider, Telkom, driving down the cost of international phone calls.
South Africa's unit labour cost is significantly lower than those of other key emerging markets,
including Mexico, Hungary, Malaysia and Singapore. In terms of the corporate tax rate, South
Africa ranks favourably against a number of developing countries who have tax rates higher
than 30%.
Three new stadiums were built for the mega eventand five older stadiums underwent major renovations.
Various operations as transportation, accommodation,
health services, logistics, technology & telecom.
Sales and promotions such as ceremonies and
cultural events, marketing etc.
Administration costs.
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Operations
35%
Sale and
promotions
16%
Adminstrati
on
15%
New
stadiums
34%
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Quick Hits-Revenue
FIFA, a non profit-making organization, said it
had made a $196 million surplus in 2009, as
revenues soared to $1.06 billion.
This is the highest revenue recorded ever in one
year in the history of FIFA.
Ticketin
g
56%
Sponsor
ship
14%
Broadc
asting
rights
30%
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Positive World Cup Implications for
AfricaFor a country that tends to be associated with images that embody the negative aspects of
humanity such as death, poverty, disease, and hopelessness, the 2010 World Cup brings an
overwhelming abundance of pride to, what may seem like, an otherwise desperate nation. Its
ability to host an event of this grandeur, puts South Africa and the entire African continent on the
global map in a positive context. Every person with a patch of land and a ball can play this
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internationally renowned sport. With that said, an otherwise meaningless game between two
children, becomes just as important as the World Cup Soccer final.
Negative Effects of the FIFA Cup in Africa
This world soccer tournament is currently estimated at costing $4.6 billion. In a country wherethe unemployment rate is twenty-five percent, this high expense may cause considerable
upheaval throughout the nation. While millions lack basic life necessities such as electricity and
clean water, FIFA and its corporate sponsors will reap the benefits of this multi-billion dollar
initiative.
Two reports of al-Qaeda threats have come to light; one against the Danish and Dutch teams
and the other during the game between England and Unites States. While the threats have
been made out to be rather insignificant by authorities, upwards of 55,000 officers are set to be
on the streets of South Africa. Each of the thirty-one participating nations will also have their
own special protection squads during the tournament.
The long-standing high levels of crime, including an estimated fifty murders a day, is suggested
to be deterring fans from attending the event. Fears such as this loom beneath the excitement
of the World Cup.
World Cup Hope for Africa
Throughout the city of Johannesburg, the continent of Africa, and, ultimately, the world, there is
a growing ambition that the 2010 World Cup will not only be momentous sporting event, but also
an image makeover for the host nation. FIFA President, Sepp Blatter is quoted as stating, "We
can all applaud. The victor is football. The victor is Africa."
hy is it that governments
