2010 boost for SA economy
18/05/2007 |
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The 2010 Fifa World Cup will have a greater impact on the South African economy than previously thought, with consulting firm Grant Thornton estimating the event will contribute at least R51.1-billion to the country's gross domestic product (GDP).
This is against the original estimate of R21.3-billion, which was presented in a financial impact report by Grant Thornton's tourism, hospitality and leisure division for South Africa's World Cup bid committee in 2004.
Business Report reported this week that R15.6-billion of this new estimate will be brought in by foreign tourists. The revised estimates of the impact of the World Cup on the economy include direct expenditure of R30.4-billion, up from R12.7-billion initially.
According to the paper, this additional GDP contribution will sustain the equivalent of 196 400 annual jobs, some of which already exist.
"A huge chunk of it comes from infrastructure, particularly the transport infrastructure, because government is now spending five to six times more than what they had initially planned to spend," said the principal in charge of the division, Gillian Saunders.
"We also have more stadiums because the number has increased," she told Business Report.
The numbers of stadiums that are to be used during the World Cup have also increased, while seating capacity at the Port Elizabeth, Cape Town and Soccer City (Johannesburg) stadiums have been increased.
According to the paper, while the original estimate was for 2.7-million tickets to be sold, generating revenue of R4.6-billion, 3.2-million tickets will now be available for sale.
Grant Thornton told Business Report the economic impact was based on 289 000 overseas visitors watching three to four matches each and 48 000 African visitors watching three matches each. About 115 000 domestic tourists will watch two matches each.
Calculations are based on a stay of 15 days because foreign tourists are not expected to stay for the month-long tournament.
There are also an estimated 100 000 African and 25 000 overseas non-ticket holders expected to visit during the soccer World Cup, the company told Business Report.
Following the release of the first estimate in 2004, Reuters reported analysts as believing that the biggest long-term benefits for the country would come from "intangibles like an enhanced international profile and an improved sense of pride and unity among local people because the world's most popular sport crosses the racial divide".
Despite the progress made in the 10 years since the country held its first democratic elections, SA's economy continues to struggle against negative perceptions, with foreign direct investment amounting to "a trickle" compared to other emerging market countries.
Hosting the world's biggest sporting event barring the Olympic Games should "help remove the reservations many foreign investors have about a country known more for its high crime rate than its developed infrastructure", Reuters reported.
"There will be a big direct injection for the economy. But the indirect impact may be more meaningful for a sustainable economic lift in subsequent years ... it will help change the perceptions that a large number of foreign investors hold of Africa and South Africa," Standard Bank economist Goolam Ballim told the news agency.
(Source: Southafrica.info)
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