Monday, 31 May 2010

Investing in the future of Africa

The first World Cup to be held in Africa will kick of in less then a week. The tournament will undoubtedly be of great entertainment value and offers South Africa a chance to show to the world that they can manage an event of this magnitude just as well as any big nation.

What conserves me though is the overinvestment that follows such an event, when demand for the national sports leagues of the organizing nations by far under weigh the capacity of the new stadiums. Consider for example the Euro 2004 held in Portugal. In January this year it was reported that “the cities of Aveiro and Leiria want to cut monthly maintenance payments for public sports arenas of as much as 1.2 million euros ($1.7 million), officials said. Mateus, a former Socialist party minister, and Aveiro’s Social Democrat deputy Ulisses Pereira say they must consider demolition.”

The average attendance in the South African Premier Soccer League was 7.526 during the 08/09 season. There are 13 venues at the 2010 World Cup, which capacity ranges from 40.000 to 94.700. How positive will the long term economic impact on those investments be?

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