World Cup and Future Investment in Africa
When FIFA announced in May 2004 that South Africa would host the 2010 World Cup, not just one country, but an entire continent rejoiced. Not only for the football, but for the exposure on Africa and the hope that this tournament would bring big businesses and investments from abroad.
With over 4 billion USD used to improve infrastructure including roads, stadiums, and transport systems in the run up to the World Cup, hosting this tournament was certainly not cheap for South Africa. Ten stadiums were renovated, improved, or built entirely from scratch for this tournament, costing the country billions of dollars.
But this was not the only investment made in the past six years. Of course infrastructure improvements paid for by the government got the most attention, but there were huge amounts of foreign investment in other areas as well. Hotels were constructed en masse, the tourism industry was built up, but more important were investments in big businesses. With increased exposure from the World Cup came increased attention from foreign investors, and they have become increasingly eager to invest in S. Africa. Whether this motivation keeps up after the tournament is a slight concern for some, and also the question remains whether this investment will cross the borders and spread throughout sub-Saharan or other parts of Africa.
What most people probably don’t realize is that while this World Cup takes place, South Africa is also playing host to a number of big business conferences. The 11th Fortune Global Forum is one of the biggest, with a number of Fortune 500 business leaders, ex-presidents such as Bill Clinton, and renowned economists and businessmen from around the world in attendance.
Mo Ibrahim, founder of the Mo Ibrahim Foundation, stated at the Forum last week that “All you hear about Africa is Mugabe, Bashir, and Darfur,” and pointed out that the increased exposure during the World Cup and this forum was a “wonderful opportunity for Africa.” Having the world watching this tournament is a huge opportunity for increased exposure, and the potential exists for increased levels of tourism and business interest in the near future. It is also an opportunity to present Africa in a whole new light, hosting the biggest sporting event in the world for the first time on the African continent. It’s not too often that Africa receives positive publicity, so to pull this tournament off successfully would be quite a significant achievement.
While I would love to be optimistic about the future of S. Africa and Africa in general, I must admit that I am somewhat skeptical right now. I think this tournament will continue successfully, but what lasting impact will there be? It’s great that new stadiums were built and airports improved, but what about addressing an incredibly high unemployment rate or the HIV rate that remains one of the highest in the world? There certainly have been improvements in health and education centers in the past six years, but will money continue flowing to these objectives or were they simply established to appease FIFA and the world?
So, what do you think? Will investment increase across Africa? Will S. Africa be the only beneficiary of this tournament? Or will things remain about the same as they are now? I wish I had all the answers but I am really just unsure about the future and how big an impact this World Cup will have on a country, a continent, and the world…
Kevin Chaissan is a KF10/11 member working in Uganda with Pearl Microfinance in an attempt to further strengthen one of the longest running partnerships on Kiva.org.