07 Jul 2010

World Cup gives SADC little to celebrate

Written by  Dawn Nagar

No. 143: World Cup gives SADC little to celebrate / Dawn Nagar / Business Day

Football is big business. Its importance was recognised by the Southern African Development Community (SADC) when it met about a year ago in Kinshasa to launch an investment strategy for its 15 member states. The SADC heads of state, representing 257-million people, agreed that football — in the form of the World Cup and the African Cup of Nations, which was held in Angola in January — could attract much-needed investment to the region. In an effort to boost the region's present gross domestic product of 471bn, the Kinshasa summit launched its "SADC 2010 Investment Promotion Strategy".

The strategy pinned great expectations on the many business opportunities and relationships that the influx of about 400 000 foreign nationals for the World Cup was supposed to bring to the region. The idea was that the new plan would boost SADC policies that focus on fostering political stability and reversing wide discrepancies of wealth and economic development in the region.

The plan was hailed as a worthy one, given the relative success of recent SADC efforts, such as its Spatial Development Initiatives. These have strengthened regional integration by providing a platform for cross-border economic planning and the development of infrastructure networks in four key sectors: energy; oil and gas extraction; electricity generation; and water and transport. In 2008, integration efforts evolved further with the establishment of a SADC Free Trade Area, and the development of regional plans in the communications and IT , and tourism sectors.

However, many goals contained in the 2010 plan appear to have been hindered by SA hosting the World Cup. The tournament has drained funds, instead of attracting regional investment. As the host, SA is buckling under the financial weight of the tournament, with its taxpayers having to absorb an estimated R40bn, while many of its citizens live in poverty and unemployment stands at about 40%.

The relatively few benefits brought by the World Cup become more evident when the economic and political costs of playing host are placed in the context of SA's lopsided trade links with other countries in the region. SA imported only about R2,4b n of goods and services from the rest of Africa in 2004, while its exports totalled R7b n. SA may be the regional giant — accounting for 85% of foreign direct investment and 70% of all multinational corporations within SADC — but its pattern of trade indicates little relative benefit to its partners.

The SADC's 15 members have to work together to improve the region's economy. SA needs to do much more if the region is to prosper.

In relation to the World Cup, it is interesting, although sad, to note the decision to host the event in SA alone — rather than in the region, as happened in 2002 with South Korea and Japan co-hosting it. Similarly, Angola's sole hosting of the African Cup of Nations may be seen as isolationist. It is not as if such sharing hasn't taken place in Africa before: in 2000 the African Cup of Nations was co-hosted by Ghana and Nigeria.

Co-hosting major tournaments such as these brings countries together — boosting regional integration efforts — and lessens the burden on host nations by sharing the high costs of such mega-events. If west Africa could do it, why not southern Africa?

Questions also need to be raised about the role of Fifa. Its mission statement notes: "The world is a place rich in natural beauty and cultural diversity, but also one where many are still deprived of their basic rights. Fifa now has an even greater responsibility to reach out and touch the world, using football as a symbol of hope and integration." So, how much of the huge profit that the association has reaped from the present tournament will be ploughed back into socioeconomic development for southern Africa? Fifa and its national partner in the World Cup should be held to account.

It has taken a long time for the World Cup to come to Africa — in the 80 years since the first tournament, 18 World Cups have been held in 15 countries on four other continents — but the tournament's arrival may prove to be little cause for economic celebration in southern Africa.

Nagar is a researcher at the Centre for Conflict Resolution.


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