Did the World Cup 2010 truly boost our economy?

Did the World Cup 2010 truly boost our economy?

With the elated announcement that South Africa would host the 2010 FIFA World Cup, people across all industries immediately set to work adjusting their advertising campaigns and branding to include soccer balls and other soccer icons, establishing fully fledged accommodation facilities (or simply erecting backyard flats and charging tourism rates), and preparing their facilities and services for a massive influx of people and revenue.

To say that there was economic optimism is an understatement.

While FIFA dictated what needed to be done (and spent) in order to prepare for the World Cup, entrepreneurs and businesses were calculating the financial impact of this global sporting event. Infrastructure was upgraded, stadia built, and hopes raised high, at the cost of approximately R38 billion… the same amount that was apparently generated for the country’s GDP.

However, we can’t say that this simply balanced the books of the South African economy – let’s look at the extended impact of that expenditure, outside of the direct revenue generated for the country. The knock effects could be imagined: for example, with upgraded highway infrastructure, one could have expected that duet to rent in centurion you’d been eyeing to increase in price after the upgrades.

“Soft benefits”

• Part of the country’s spend on was providing a much-needed upgrade to the country’s roads, airports and telecommunications. Benefits like these remained in place after many of the tourists had gone home, and are used to further improve the country’s economy.

• People’s entrepreneurial spirits emerged and thousands of new small businesses sprang up to capitalise on the expected rush of tourists – businesses that are still operating and viable two years after the World Cup.

• In preparation for the World Cup, 130 000 new jobs had been created, which was an incredible feat for a country struggling with unemployment figures. However, many of these jobs fell to the wayside after the World Cup infrastructure was in place and construction efforts were no longer required.

• There were 309 000 new tourists to enter the country (not counting South African expats) during June and July 2010 – a radical boost. During the World Cup, the international opinion of the safety of South Africa as a tourism destination increased dramatically by 9%, with more than half of the attending tourists saying that South Africa’s hosting of the World Cup was better than other World Cups they’d attended. Many of these tourists were likely to return to the country for non-soccer-related holidays and tours.

Benefits for advertising industry

South Africa’s advertising industry is dominated by television ads, especially when it comes to sporting events. The Soccer World Cup drove $220 million (R1.85 billion) worth of advertising into South Africa and had a massive impact on revenue figures for the industry.