Cape Town - Hosting the Rugby World
Cup in 2023 will bring South Africa R27.3 billion in direct, indirect and
induced economic impact.
It will also sustain 38 600 annual job equivalents -
some temporary and some will be permanent.
This is according to a
Grant Thornton economic impact assessment commissioned by SA Rugby as part of
the bid process.
At the South African
Government’s insistence, the report was independently verified before it
provided the financial guarantees to underwrite the bid.
Other highlights from
the report show that hosting the tournament will generate R11 billion in direct
spend in South Africa and R1.4 billion in tax revenue. 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
sports events hosted here in the past.
The results are
expressed as direct, indirect and induced impact. For example, direct impact
will be the amount that a guest pays for a hotel room. Indirect impact is what
the hotel spends 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 their employment with the hotel.
South African Rugby CEO,
Jurie Roux, says the assessment was rigorous. The assumptions are based on best
practice and government thoroughly scrutinised the determinations before
committing to the financial guarantees.
“There would have been
no guarantee of R2.7 billion if government was not convinced that hosting the
2023 Rugby World Cup was an economic opportunity as well as a sporting
consideration is that the economic impact will be shared across the seven host
cities. With the most matches and the final, Johannesburg 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.
The economic impact for
the remaining five host cities - Durban, Tshwane, Bloemfontein, Nelson Mandela
Bay and Mbombela - is between R1.4 and R4.5 billion.
In addition to the
tangible economic impact, the report also lists a number of intangible benefits
that will accrue to the country. These include enhancing South Africa’s
international profile, increased tourism before and after the tournament and
the cohesion and national pride that results from hosting a major international
Notably, the report
states that no additional stadia will need to be built and that successfully
hosting the event will generate interest to host other global events in South
Africa in future.
The report concludes:
“The resulting economic impact assessment shows that the 2023 Rugby World Cup
will provide significant economic benefits to the local economy in respect of
jobs sustained, gross geographic product and taxation.”