World Cup
What are the long term benefits and what happens after the World Cup?
My wife and my liver are glad the World Cup is over. South Africa, its economy and its people are sad to see it come to a close.
South Africa has proved itself to be an extremely capable host and the tournament has been a fantastic advertisement for the country. The stadiums have been magnificent and the logistical planning and organisation impressive. Indeed, it is almost certain that we will look back on this sporting extravaganza as one of the more positive events in South Africa's history.
The obvious questions are: what are the long term benefits and what happens after the World Cup?
As far as the immediate benefits are concerned, some sectors of the economy have profited substantially before and during the event. The construction industry has enjoyed a windfall couple of years.
Stadiums, the Gautrain and other road and transport projects have kept the contractors very busy. Just when the global downturn started to weigh on a variety of mining and infrastructural projects, the World Cup projects came around to cushion the blow.
The differentiating factor of the World Cup-related projects has been the degree of urgency. Whereas, the average government and parastatal project has and will continue to be subject to inevitable delays in specification, award and execution, the World Cup projects had strict FIFA-imposed deadlines; they had to be done on time. If only FIFA could oversee all our infrastructure projects!
The event has been a massive boon to the hospitality and leisure sectors. I can personally vouch for the healthy volume of beer sold by the likes of SAB Miller over the past month, and am eternally grateful that we will not be subjected to Budweiser, at R30 a bottle, on an ongoing basis. Early indications are that, although we would have liked to see higher tourist numbers, those that came spent freely. All this amounts to a very smart once-off injection straight into the vein for the SA economy.
The spotlight has been on South Africa over the past few weeks, and the country has delivered. For this, its citizens can give themselves a pat on the back. It is indeed gratifying to know what a nation is capable of achieving if it put its mind to it. A lot of hard work went into the event, both in terms of planning and delivery. Those that were involved should have gained invaluable skills.
The World Cup has also been a very positive exercise in nation-building. Unfortunately, South Africa seems to find very few opportunities to unite the nation behind one cause. It rallied behind Bafana Bafana and threw its full weight into making the tournament a success by welcoming the visitors. If only it could continue on this path of building the nation and bridging the gap between rich and poor with the same gusto!
So, what happens now that the World Cup is over? We have to nurse the inevitable hangover - literal and figurative. Once the last tourist has left it is back to real life. Focus will return to some of the economic and social issues facing the country: the poor state of education and health, service delivery and unemployment. South Africa is crying out for true leadership. Indeed, it is hoped that the World Cup will be the spark that spurs the politicians on to deliver to those that need it most rather than jostling for a seat on the gravy train.
Prepare yourself for the unavoidable lull in infrastructural spend. As discussed above, the urgency in execution will fall by the wayside. Unfortunately, there is less money than previously in the kitty to fund the very necessary projects in power, transport, housing, health and education. Yet, these projects are essential to the country's long term development and growth. Hopefully, the successes of delivery into the World Cup will be the blueprint for execution on infrastructural projects in the future.
Before we become gloomy and pre-occupied with the issues we face, we should acknowledge how positive the World Cup has been. There have been both the shorter term economic spin-offs and the longer term capacity improvements. The tournament served as a catalyst for the roll-out of a vastly improved public transport system in the major cities. Many citizens of Johannesburg and Cape Town have used buses and trains for the first time in many years and were generally impressed. There is no reason why a working public transport system cannot be a part of our everyday lives. The economic and environmental benefits will be significant.
Security arrangements during the tournament have been top notch. Tourists and citizens have felt free to walk in areas that they would normally avoid. Again, it just goes to show what can be achieved when we apply our minds to the matter of security.
It is imperative that South Africa has the will and savvy to leverage off this massive once-off event. Lessons should have been learnt, skills developed and capacity created. To let this go to waste would be criminal. Its is hoped that next week, we will be reading about what a success the tournament was, the benefits reaped, what has been learned and how the leadership will be employing this knowledge going forward.
*This article was first published by Alphen Asset Management
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