The impact of the World Cup on South Africa

South Africa is the engine of the African economy and is rich in natural resources. It contains 90% of the world's platinum deposits, 80% of manganese, 73% of chromium, and 41% of gold. South Africa's agricultural exports account for 8% of its total exports, providing abundant supplies to Africa and other parts of the world. South Africa's land area is about twice that of Texas in the United States. It has a world-class highway system, a world-class banking system and a telecommunications system. In addition, its stock market is also quite large, attracting 41 billion from the United States alone. dollar investment.

The Cape of Good Hope at the southernmost tip of the African continent, the world's largest wildlife park and many natural ecological reserves, rugged and bold food, and famous wine all highlight South Africa's tourism charm. Tourism is one of South Africa's important pillar industries, with annual revenue reaching US$27 billion. The hosting of the World Cup will provide a new development opportunity for South Africa's tourism industry. The World Cup enabled South Africa's tourism industry to perform well last year. The number of overseas tourists in South Africa was nearly 10 million, a year-on-year increase of 3.6%. The consumption of overseas tourists reached 7.94 billion rand, approximately US$1.09 billion, a year-on-year increase of 7%. 2010 is destined to be a year full of expectations for the South African tourism industry. According to foreign reports, the World Cup is expected to bring more than $13 billion in revenue to South Africa. It is expected that in the next three years, the number of foreign tourists traveling to South Africa will increase by 2 million, making tourism a new growth point for the South African economy.

According to the British "Economist" report, a report by the well-known accounting firm Grant Thornton shows that the Football World Cup may surprisingly boost South Africa's economic growth by an additional 0.5%. This is a considerable contribution to the South African economy's expected growth of 3% this year. During the World Cup, it is expected that 373,000 foreigners will go to South Africa to watch the event. Each of them will stay in South Africa for an average of 18 days, attend five games and spend nearly $4,000. These statistics are compelling and drive fans crazy.

Crudent estimates

However, the South African government is quite cautious about such predictions, because two years ago on the eve of the global financial crisis, Grant Thornton also raised concerns about the impact of the World Cup on South Africa. similar reports. People cannot help but worry that the economic recession may shrink the economic benefits that sports events bring to South Africa. In fact, if Grant Thornton's expectations are correct, South Africa will have nothing to worry about. In 2007, the company expected 483,000 foreign tourists to come during the World Cup, but now the number is expected to have dropped sharply. In addition, only 11,300 ticket holders came from African countries other than South Africa, which undoubtedly disappointed the organizers. However, it is currently expected that each tourist will arrange more itineraries, stay more time and spend 1/3 more in South Africa.

The reporter learned from the website of the Economic and Commercial Office of the Embassy in South Africa that according to South African media reports, South Africa’s two largest tourism organizations, the South African Hospitality Alliance Association and the Southern African Tourism Services Association, recently issued a joint statement stating that the global economy The severe recession caused the number of tourists coming to South Africa to watch the World Cup to be much lower than expected. The originally envisaged situation of full hotels in South Africa during the World Cup did not occur. In addition, high air ticket prices and poor hotel marketing are also important reasons why tourists are not enthusiastic about visiting. Initially, relevant authorities had expected to attract 450,000 to 500,000 tourists to South Africa to watch the games during the World Cup. However, the current situation shows that only about 300,000 tourists will visit. According to a recent survey conducted by Reuters, the upcoming FIFA World Cup in South Africa will promote South Africa's economic growth, but it will be difficult to achieve the effects expected when South Africa successfully bid for the event. Reuters reached a compromise conclusion after surveying 22 well-known economists. The World Cup will only boost South Africa's economic growth by 0.3 percentage points.

Peripheral business opportunities

The World Cup is not only promoting the South African economy, but also stirring up the economies of other countries around the world. For example, Brazil is the fourth largest beer consumer in the world, and beer is Brazilians’ favorite when watching football. The World Cup is about to start, triggering a frenzy of beer consumption. To this end, Brazil has urgently cut import tariffs. It recently announced that it will sharply reduce the import tariff on canned beer from the original 16% to 2%. South Africa's Daily Business Daily reported in early June that the American company Starbucks will sell coffee and tea beverages in South Africa through designated hotels and casinos during the World Cup. This is Starbucks' first entry into the South African market.

However, what makes South Africans dissatisfied and even complain is that most of the money has been earned by FIFA, the full organizer of the World Cup, while South Africa has to bear almost all expenses. FIFA is only responsible for the prize money paid to participating teams, as well as travel and match preparation costs. The cost of these expenses for the 2006 World Cup in Germany was US$279 million. In mid-May this year, FIFA stated that it would pay an additional US$100 million to South Africa to ensure that all competition facilities are completed on time. Major direct revenues from the World Cup, such as television broadcasts and marketing, will go to FIFA. According to a report by Citi, a research arm of Citigroup, FIFA's revenue during the World Cup in Germany reached US$1.8 billion, equivalent to 0.7% of South Africa's GDP. FIFA will recycle the majority of these revenues for the development of football worldwide. Still, even a small portion of it would help clean up some of South Africa's deteriorating shantytowns.