Hosting event will benefit SA

2017-09-27 06:02

Hosting the Rugby World Cup in South Africa in 2023 is estimated to inject R27,3 billion by direct, indirect and induced economic impact.

It is envisaged that the preparation for this event will sustain 38 600 jobs – some temporary, but some permanent.

This is according to a Grant Thornton economic impact assessment commissioned by SA Rugby as part of the bidding process.

At the South African Government’s insistence, the report was indepen- dently verified before it provided the financial guarantees to underwrite the bid.

Subsequently, the South African cabinet approved a request for guarantees to the value of R2,7 billion, which was required from World Rugby as a prerequisite in hosting the showpiece rugby spectacle.

The final decision on the hosting rights of the three bidding countries, South Africa, Ireland and France, will be made on 15 November.

According to Grant Thornton, the economic impact for the five host cities, Durban, Tshwane, Bloemfontein, Nelson Mandela Bay and Mbombela, is estimated between R1,4 and R4,5 billion.

Highlights from the report show that hosting the sporting event will generate R11 billion in direct spending in South Africa and R1,4 billion in tax revenue. It is estimated that low-income households will benefit by an amount of R5,7 billion.

In conducting the assessment, Grant Thornton’s team carried out numerous interviews and surveys to determine the costs of hosting the tournament.

Other data that was scrutinised included economic impact studies from previous Rugby World Cup events, rugby tournaments and internationals held in South Africa, as well as other large sporting events hosted here in the past.

Direct impact can be explained as being the amount that a guest pays for a hotel room. Indirect impact can be what the hotel then spends on buying food for guests during the tournament, while induced impact will be the amounts that the hotel’s employees spend in local shops as a result of employment with the hotel.

Jurie Roux, chief executive officer of SA Rugby, said the assessment was rigorous and that assumptions were based on the best practice and that the government thoroughly scrutinised the determinations before committing to the financial guarantees.

“There would have been no gua-rantee of R2,7 billion if the government was not convinced that hosting the 2023 Rugby World Cup was an economic opportunity,” he said.

Roux said an important consideration is that the economic impact will be shared across the seven host cities. With the most matches and the final to take place in Johannesburg, it is estimated that the city will benefit by an amount of R10 billion, with 14 102 jobs created or sustained. The contribution to Cape Town’s GDP will be R5.2 billion with 7 304 jobs.

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