How the economic numbers stack up for World Cup's South African hosts

KEIR RADNEDGE in South Africa / Sports Features Communications

PRETORIA, Jun 19: No two experts, analysts or economists can ever agree on the commercial impact on a country of a major sports event. Sports and tourism directors always forecast a huge influx of extra visitors for a World Cup or an Olympic Games, keeping conveniently quiet about the truth that huge numbers stay away during the sporting takeover.

They do not wish their sightseeing to be spoiled by extra hordes of sports fans or pay the extortionately ramped-up prices of hotels, restaurants and transport services.

These are the imponderables with which South Africa will wrestle when the dust has settled and the FIFA circus has left town.

Originally the Republic expected 500,000 extra visitors; then came global recession and the forecast slipped to 450,000 with pragmatic observers now suggesting even 350,000 is optimistic.

Everyone has a different take. Cees Bruggemans, chief economist of South Africa’s banking giant FNB, has recalled that consumer confidence shot up by a massive 27 points back in 2004 when the country was originally awarded hosting rights to the World Cup and believes in a repetition, if only temporary.

New car sales are up after a three-year slide and retail sales are up all in defiance of data recording the loss of half a million jobs over the past 18 months and only a very slow recovery of house and stock market prices after the slump of 2008.

This is more simply described as the feel-good factor which is arguably as important for a country as the ocean of economic statistics and forecasts (mostly gloomy and, so it seems, frequently little more than misguided guesswork).

Security duties

But the feel-good factor is not being felt across the board. This is why the police have taken over security steward duties in four of the World Cup venues after the staff rebelled at being promised one rate of wages then being paid only a quarter or a third.

This was just one eruption of a number of industrial disputes bubbling just beneath of the crust of the first World Cup on the African continent. Construction work on several stadia had been delayed by pay disputes and electricity workers are currently pressuring Eskom over a new deal.

In the background local media organisations, acting in response to suspicion and speculation, are pressing for access to documents relating to all the tenders awarded by the local organising committee. One Competition Commission inquiry has investigated stadia building and another allegations of collusion over flight pricing.

How, now, to balance out fact and forecast?

One commentator has claimed that South Africa “was not sophisticated enough to secure the sort of financial arrangement Germany did from FIFA [in 2006]” but noted that “we will prove to the world that we can host the greatest spectacle on earth.”

That, in itself, should pay off over the coming years for Africa in general and South Africa in particular.


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