Hosting the 2023 Rugby World Cup will add R27 billion in economic impact

05 December 2017 Authored by Consultancy.co.za

Hosting the Rugby World Cup in 2023 will be highly fruitful for South Africa in an economic sense, according to Grant Thornton. The event will attract more than R27 billion in investments and create more than 38,000 job opportunities. 

In order to inform its bid for hosting the Rugby World Cup in 2023, SA Rugby, the sport's governing body in South Africa, commissioned Grant Thornton to comprehensively assess the potential economic impact that hosting the event could have. After conducting the assessment, the consulting firm has released a report stating that the economic benefits from hosting the event could amount to R27.3 billion.

The amount is a cumulative footprint, which includes the direct economic benefits as well as the indirect and induced benefits. In order to determine the overall impact, the firm conducted an extensive study, which included an overview of previous events, both in the rugby domain and otherwise, as well as a number of surveys to help determine costs. 

In direct terms, the country will reap R11 billion worth of direct expenditure, and $1.4 billion in tax. Direct revenue includes the money spent both by locals and by tourists in relation to the tournament, such as spending on hotel rooms and food. Indirect impact, on the other hand, would be the money spent on raw materials to supply these services, such as stocks in hotels and restaurants.

Hosting the 2023 Rugby World Cup will add R27 billion in economic impact

In addition, the report highlights that up to 38,600 jobs might be generated as a result of the tournament, both in temporary as well as permanent terms. As a result of this job creation, the number of people with purchasing power will increase, which will further boost spending in the economy. 

This is what the report describes as induced revenues. Combined with the indirect revenues, these make up approximately R15 billion. Moreover, the nature of jobs generated (hotel and stadium staff, etc.) will be of greater benefit to lower income households in the country. As per the report, this income bracket will reap R5.7 billion in benefits. 

In terms of individual cities, the capitals will absorb a majority of the spoils. Johannesburg, which will be host to a number of matches including the final, will generate benefits of around R10 billion, and create 14,100 jobs. Cape Town will generate approximately R5.2 billion in revenues, and create 7,304 jobs. Meanwhile, other host cities such as Durban, Tshwane, Bloemfontaine, Nelson Mandela Bay and Mbombela will cumulatively generate between R1.4 billion and R4.5 billion.

In essence, the event will be a boon of sorts to the economy, which is entering a phase of optimism after a prolonged period of austerity. As concluded by the report, “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.”

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