For the man in charge of South Africa’s coffers, finance minister Pravin Gordhan, the journey to 2010 has been well worth the price tag.
National government has spent 33 billion rand over the last seven years in preparation for the World Cup, this included the building of new stadiums, improving transport infrastructure and investing in security personnel and equipment to ensure that the event is safe and secure.
In return, Government estimates that the World Cup created 130,000 jobs and will contribute 0.4 per cent to the country’s GDP this year, injecting 38 billion rand into the economy.
“The full benefits we will only understand in the coming months, but clearly people have been coming into the country in large numbers and spending money, which will increase our VAT receipts, and benefit the hospitality and retail industry. The World Cup has also resulted in a new burst of entrepreneurship from South Africans,” explains Gordhan.
But the true benefits of the World Cup may only be felt in years to come as South Africa capitalises on its improved infrastructure and global image.
“Today South Africa is on the map, today we have earned ourselves the reputation of a country that can deliver,” said Gordhan.
Leading economist Iraj Abedian says that his company, Pan African Advisory Services, is already noticing increased interest in the country as an investment destination.
“There has been an amazing and remarkable mindset shift. Africa has been bedeviled by deep and wide afro-pessimism but this has been replaced with a different perception of South Africa and Africa – that of capability, which is a new thing,” explains Abedian.
Abedian explains how the World Cup will benefit different sectors of the economy at different stages.
"Businesses are seeing the event from a different set of lenses and they will be affected differently post the event. For example investment houses in South Africa are not benefitting today, but in mid to long term they are rubbing their hands as they look to attract partners for investment. On the other hand restaurant owners will be missing the event after 11 July. Hotels have created infrastructure that they are benefitting from now but after the event they going to look for other opportunities and other means to get returns on their investment. They understand that their investment won’t be paid back in 6 weeks (during the World Cup) but it is about building on their opportunities in the long run,” continued Abedian, who reflected on the increased potential for the hotel and tourism industry in particular after the tournament.
“Historically we have not been a destination from the South American market but more and more from that quarter are now visiting South Africa with four teams from this region in the last eight. It is a welcome change in diversifying tourism sources to the country”.
Both agree that the World Cup experience not only proves to the world that South Africa means business but gives the country a model for meeting many of its other infrastructure and developmental needs.
“Most interesting for me is the cross between public and private enterprise. South Africa is a developing nation and there is a backlog in infrastructure development. If we can do what we did for FIFA events such as the World Cup, with the same level of political will and coordination, can we not do the same thing for other projects? We can learn from this,” said Gordhan.
“There is a debate at the moment in the business community around delivering on scale. If the experience of 2010 is used as a platform to deal with development and the needs of our country, for the next 20 years business will continue to benefit. It is about coordinating between business and government,” said Abedian.