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Who stands to gain from 2010?When South Africa won the bid to host the 2010 Fifa Soccer World Cup, everyone from large corporate companies to street vendors shared in the excitement of benefiting from the economic opportunities that come with the soccer spectacle. South Africans have donned their cars and businesses with South Africa’s flag and official colours. But, as the excitement mounts, so too does the anger of those who believe they have nothing to gain.
Many business owners are beginning to wonder whether the World Cup will be the financial windfall that many have come to expect. They are facing numerous logistical issues, including the potential threat of lost productivity during the event as employees take leave, spend less time at work to watch matches, or simply have difficulty getting to and from work due to traffic backlogs when a match takes place.
According to Mark Prommel, business development executive at Imperial Logistics, it has been confirmed that an embargo will be placed on the movement of abnormal loads during the World Cup. There also has been talk that an embargo could be imposed on certain hazardous freight that is moved by road, but not confirmed at this stage. “Both these restrictions could impact negatively on certain logistics companies who specialise in these services,” he says.
While most suppliers and manufacturers of perishable goods will make provision for a mid-year peak, many of them are uncertain about what to expect in terms of demand on certain products. “Some road freight companies may experience a slight boost to their revenue directly and indirectly. Large volumes of freight are being imported for this event and most of this freight will have to be exported once the event is over,” says Prommel.
“All containers will be moved by road. The truck rental companies already have seen an increase in demand for certain vehicles types.”
He also expects most companies associated with the fast-moving consumer goods and retail industry to experience some sort of increase in volumes before and during the event. “Companies involved in liquor and beverage distribution should definitely see an increase in volumes.”
While a recent media statement claims that informal traders have an opportunity to score during the World Cup, official bodies that represent the traders disagree.
The Johannesburg City’s Department of Economic Development has drawn up programmes to help informal traders benefit from selling their products on match days. However, for traders to be part of this scheme, they have to adhere to Fifa rules.
According to the executive director of Joburg’s 2010 Office Sibongile Mazibuko, it is not the City’s intention to disrupt the livelihood of street traders, particularly those who normally trade in areas zoned as controlled access sites or exclusion zones. “The City seeks to ensure that trading at these sites is controlled, but also disrupted as little as possible,” she says.
Trading is not allowed in exclusion zones around the stadiums on match days, but new opportunities are being created for them to operate in high fan traffic areas.
Under Fifa rules, host cities must have commercial restriction zones around stadiums and areas of importance during the competition.
Mazibuko explains that this is to protect Fifa’s commercial affiliates and sponsors from ambush marketing by competing companies that have contributed nothing to the event.
Thabo Koole, communication and information co-ordinator of the Ecumenical Service for Socio-Economic Transformation, says that instead of celebrating on Human Rights Day this year, 28 informal traders who had been selling at one of the stations were mourning ill treatment, as they had to vacate the area for six weeks while the station underwent renovations for the World Cup.
“They were not given an alternative location to sell from while renovations took place, and the decision affected a lot of women who were struggling to make an honest living for themselves and their families,” he says.
As Park Station will be one of the controlled access sites mentioned above, traders will not be able to conduct any business without the written approval of the City of Joburg, acting in consultation with Fifa and the 2010 local organising committee. “Many in the already swelling informal trading sector were initially optimistic that the Cup parade would bring them much needed economic spin-offs, but informal traders are amongst the marginalised groups excluded from benefiting financially. They will not be allowed to trade as freely as they thought,” says Koole.
“Most of the host cities were compelled by Fifa to promulgate bylaws to regulate the trading sites. The informal traders in host cities such as Johannesburg, Durban and Cape Town were among the first victims of eviction enforced by respective host cities authorities,” he adds.
Churchill Mrasi, president of the Informal Business Forum, also believes that informal traders have not been accommodated and will not benefit from the tournament. “We have noticed that the local organising committee has distanced itself from our people on the ground and that Fifa has been in control of everything.
The regulations that have been set will hamper our trade.
“For instance, those who want to have big screens in taverns to broadcast games will have to pay in the region of R50 000 for a special licence, while those traders who have traditionally sold fruit or other food items in and outside stadiums will now have to pay around R1 000 a day for this privilege. This is unreachable for most of them.
“In addition, we have seen that the local councils, probably in pre-World Cup cleanups, are removing traders from their areas of business and confiscating their goods, so not only will we not benefit, but we may end up worse off than before – during the games,” he adds.
At the time of going to print, Fifa already had launched 2 500 legal actions around the globe to protect its World Cup brand. Of these, 450 actions had been taken or are pending in South Africa.
At a recent news conference called to defend the policy, Fifa marketing director Thierry Weil said that corporate partnerships were essential to raise the $1.5 billion cost of the World Cup, and the sponsors paid large amounts for exclusive rights.
According to Econometrix’s Tony Twine, no enterprise or industry that has prepared properly for the World Cup – with a reasonable collection of contingency plans in case the unexpected occurs – should really experience problems during the tournament. “We have had six years to prepare. Industries that have not prepared are a problem, not the World Cup itself,” he says.
Twine explains that companies directly connected to the organisation and preparations of the tournament have been very busy. “Others have been making plans for impacts that the tournament may have while it is in progress, while others have been making plans on how to disengage the assets that they will have deployed leading up to and during the tournament as soon as it is over.”
In the short term, the most obvious beneficiaries will be the hospitality and catering industries, the international and domestic travel industries, and the entertainment industry.
“In the longer term, given the colossal global media exposure that the country will receive, ‘Enterprise South Africa’ as a whole must be a winner, simply because we cannot dream of being able to purchase television viewership of four billion people all around the world, every day, for a month. And, this is before we begin to consider the media mill that will be running out South African-centred stories – a process which already has begun,” says Twine.
While some small, medium and micro enterprises (SMMEs) are up in arms as they say there is little gain for them, Twine is of the opinion that if an SMME has a particular focus and serves a particular geographic location – both of which are far removed from the tournament – their benefit will obviously only be a very indirect one. “It is the job of the entrepreneur to find the links, if there are any, to create benefits for a given business – the links will not find the businesses of their own accord.”
Trevor Bloem, chief director of communications for the Department of Tourism, says that Fifa has included non-hotel facilities into its inventory for the first time. “This is to allow smaller operators and new products to benefit from 2010.
“During the World Cup period, our visitors can also experience the tourism products, become proud South African ambassadors, and thus boost tourism,” he adds.
Allison Cooper
