South Africa Accrues Returns From World Cup

South Africa has made good returns on the billions of rand it spent on hosting the continent's first soccer World Cup, President Jacob Zuma said yesterday.

The Treasury previously predicted that the tournament would add 0.4 percentage points to Gross Domestic Product (GDP) this year, with lasting positive effects on the economy through infrastructure development, investment and tourism.

It is too early to say for sure how much will flow from the tournament for the country.

“We can safely say that we have good returns on our investment, which includes Rand 33 billion spent on transport infrastructure, telecommunications and stadiums,” Zuma said at a lunch briefing.

Analysts say South Africa would directly recoup only a fraction of the input costs spent on staging the World Cup but should reap long-term economic benefits through the rebranding of a nation noted for violent crime.

Businesses in Africa's biggest economy have reported booming trade, including higher hotel bookings, car rentals and sales of World Cup memorabilia since the tournament started on June 11.

But analysts estimate foreign spending would only inject R13bn into the local economy, far short of the roughly R40bn the government has ploughed into new stadia and upgrading of roads and airports.

South Africa had slashed an initial estimate of 450,000 foreign visitors after the global downturn and foreign media reports about violent crime caused sluggish sales of World Cup tickets outside the country.

Organizers said they were still confident of meeting the initial target even though only 200,000 foreign World Cup fans were estimated to have arrived during the first three weeks of the tournament.

Source: Reuters