World Cup's boost for GDP 'higher than expected'

| Friday July 30, 2010 00:00

Initially, Government estimated that the World Cup would add 0.5 percentage points to annual growth this year.However, Finance Minister Pravin Gordhan told guests at a dinner hosted by the International Marketing Council last night: 'When we take account of the spending on stadiums and infrastructure since 2006, we find that the level of GDP is about 1 per cent higher than it would have otherwise been.'

In addition, he said the tournament undoubtedly boosted the country's standing internationally, showcasing its capabilities in delivering world-class infrastructure on time and without imposing a financial burden on the national fiscus.

National government put in some R33 billion into preparations for the World Cup, which Gordhan said was an investment that formed part of a long-term development plan for the country, rather than funding a once-off event.

'We must also remind ourselves that what government was able to put into this project came from the taxpayers of this country, both in the business sector and as individuals, and it is to them also that the credit must go.

Hosting the 2010 FIFA World Cup acted as a catalyst for expanding our infrastructure base, skills development, employment creation, and economic growth.'

He said the successful hosting of the tournament had shown that South Africa could rise to the challenge of hosting the biggest sport on the planet.'The narrative about South Africa in the international media during the tournament suggests that we did close that gap. Reporting on South Africa has been the most positive since our successful transition to democracy in 1994.

'Importantly, for once, South Africans were more optimistic than anyone else in the world, more confident about their abilities than anyone else in the world, and more united about the experience they were creating for both the world and themselves,' he said.

While also having hosted the tournament, three key lessons were learnt such as the complex challenges into a number of clearly defined undertakings with budgets and cash flow.

'The complex 2010 FIFA World Cup project was disaggregated into a mere 24 projects. This enabled all institutions involved to focus on what was required to deliver on time and ultimately ensure a successful event.'Second to the lessons learnt was the development of roles and responsibilities indicating which organisation does what work and by when. Thirdly, the tournament had an immovable deadline that all parties had to work towards.

'These lessons will be taken forward in our public sector infrastructure programme, where R846 billion has been committed over the next three years. We have budgeted that R261 billion will be spent this financial year, increasing to R300 billion in financial year 2013.'

More than 45 percent of these funds are committed to the electricity, freight rail and ports sectors. The minister added that investing in these sectors would ensure security of supply of electricity and improved quality of freight and shipping services thereby growing the country's exports, among other things.

'There is also intensive work taking place to formulate a long-term infrastructure investment plan while government is also working on different funding options for social and economic infrastructure. Once completed, this plan will ensure that South Africa has a sustained and sustainable infrastructure delivery plan.

'But the most important legacy of the World Cup is the renewed confidence in ourselves as a nation that the hosting of the tournament has brought about,' said the minister - (BuaNews)