Explained: The economic impact of the 2023 Rugby World Cup

In November, the South African Rugby Union (Saru) and the country will finally get confirmation on whether the bid to host the 2023 Rugby World Cup was successful.

Cynics will say it’s another drain on public finances but according to an independent economic assessment, South Africa could benefit greatly.

But how exactly?

Here’s a handy explainer.

Let’s get to the nitty gritty early, what figure are we talking here?

The World Cup will bring in R 27.3 billion in direct and indirect economic spin-offs  for South Africa.

 How much jobs will it create?

The tournament will create a total of 38 600 jobs – temporarily and permanently.

Who came up with these figures?

Auditing firm Grant Thornton prepared the report after they were commissioned by Saru. It was part of the local governing body’s bid submission. The figures were also independently verified “at the insistence of government”. That’s understandable because government had to provide a R2.7 billion in financial guarantees.

R27.3 billion is a lot of money. How will that figure be broken down?

A detailed summary wasn’t made available but the tournament will generate R11 billion in direct spending in South Africa. An extra R1.4 billion in tax revenue will also be raised. Low-income households will benefit by R5.7 billion.

You mentioned direct and indirect economic impacts. What exactly does that mean?

Grant Thornton has a good way of explaining it:

“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. Induced impact will be the amounts that the hotel’s employees spend in local shops as a result of their employment with the hotel.”

But previously – like the 2010 Fifa World Cup – South Africa made far more debt than it could bring in. What’s changed?

The key here is that South Africa’s rugby infrastructure is pretty good. There’s no need to build expensive new stadiums because they all complied with Fifa regulations. That means they’ll comply with World Rugby too. Don’t underestimate the bonus of not having to fork out billions for new infrastructure.