Saturday, July 31, 2010

SA’s hosting of FIFA World Cup brought economic benefits

The hosting of the 2010 FIFA World Cup, which has pumped an estimated R93-billion into the local economy, has rebranded South Africa and created a favourable climate for direct foreign investment and tourism growth, says KPMG senior economist Frank Blackmore.
"One does not have to be an economist to know that things went well," he said at a KPMG post-2010 World Cup panel discussion in Johannesburg this week.
The June 11 to July 11 sporting event contributed around 0,5% to South Africa's yearly gross domestic product growth, and from around 4% to 6% to the country's quarterly growth.
Currently, South Africa's tourism rate is around 20% higher than it would normally have been for this season of the year, and it is believed that for every ten tourist coming into the country, one job opportunity is created.
A recent survey by African Response found that 96% of World Cup visitors to South Africa said that they would possibly return to the country, while 92% would recommend the country to friends and family as a holiday destination.
Murray & Roberts construction executive director Trevor Fowler, who also participated in the KPMG panel discussion, said that the money spent on infrastructure for the event had provided South Africa, as a developing country, with some "much-needed" infrastructure.
"Our roads have seen great improvement, public transport has been elevated to a level not experienced in the country before, we have built stadiums of the highest global standards and hotels, accommodation and other facilities had been constructed that can now be used by the people of South Africa, tourists entering its borders and other sporting events.
"In fact, the country had already received some enquiries from Brazil, that will be hosting the next World Cup in 2014, to assist them in their planning efforts."
Fowler further said that the Gautrain, for instance, had far exceeded expectations. "We initially estimated that between 3 000 to 6 000 people a day would use the train, and currently we are seeing around 13 000 people using the train a day on weekdays and 20 000 people on weekends.
"This has also shown us that a significant public private partnership, such as the Gautrain project, can be executed with great success."
Blackmore also pointed out that the almost R800-billion infrastructure "cracker" helped mitigate the effects of the global recession. "While the rest of the world were licking their financial wounds, we here in the south were beavering away."
Meanwhile, with South Africa's newly found confidence in hosting big sporting events, the country has indicated that it would consider putting in an official bid for the 2020 Olympic Games.
However, Fowler pointed out that this would essentially be quite different to hosting the soccer World Cup, seeing that there were a large number of different sports and events, and thousands of athletes that would have to be accommodated in one city over a three-week period.
He said that a lot of new infrastructure would be needed, such as large swimming pools and athletic tracks that would not necessarily be that easy to use after the event.
Nevertheless, Fowler said that the building of the infrastructure, especially in a developing country such as South Africa, could be beneficial.
He pointed out that government was also keen on continuous investment in the country's infrastructure, and that a national infrastructure plan was currently in development and would be put in place by the end of the year. "This also includes things such as pipelines, undersea cables and power infrastructure."
All in all, KPMG audit director Devon Duffield said that all the money that was spent during the 2010 World Cup was still circulating in South Africa, and that money that was circulating faster defined the creation of wealth.

Edited by: Creamer Media Reporter


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