World Cup costs S.Africa dear but longterm boost seen: analysts

Mon Jun 28, 2010 3:06pm GMT
 

By Stella Mapenzauswa

JOHANNESBURG (Reuters) - South Africa will only directly recoup a fraction of the billions of rand 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 increased hotel bookings, car rentals and sales of World Cup memorabilia since the start of the soccer spectacular on June 11.

Visa Inc says spending by foreigners using its credit cards has topped $128 million, up 54 percent compared to the same period last year.

But analysts estimate foreign spending will only inject 13 billion rand into the local economy, far short of the roughly 40 billion rand the government has ploughed into new stadia and upgrading roads and airports.

"In the short-term, the economic benefits will be to a very minor extent, if there is a benefit at all," said Econometrix analyst Tony Twine, adding more costs would come from lost production while workers watch soccer matches.

"But I think in the longer term we will see definite assistance to economic growth simply because of the global market exposure that the South African economy is enjoying at the moment," he told Reuters.

Office rental firm Regus says a recent survey of 15,000 contacts on its database showed South African companies were optimistic the country would gain from the World Cup.

Overall, 86.5 percent of respondents said hosting the soccer extravaganza would be good for business, while 83.5 percent believed it would improve global opinions about South Africa as a place to do business.   Continued...

<p>Workers cut wood during the modernisation work at the Royal Bafokeng Stadium in Rustenberg November 25, 2008. The venue will be used for the 2009 Confederation Cup and for 2010 FIFA World Cup. REUTERS/Radu Sigheti</p>
  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.2617
Euro USD =1.1124
Rand USD =0.0764