South Africa banks on lasting World Cup legacy

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By Marius Bosch

JOHANNESBURG (Reuters) - South Africa has spent tens of billions on hosting the World Cup, hoping to draw more tourists, boost investment and reverse the country's crime-ridden image abroad.

But the real benefits of holding the world's biggest single sporting event on the African continent for the first time will only be seen in years to come, analysts said.

The month-long World Cup which starts on Friday is expected to add around 0.5 percent to South Africa's GDP in 2010 and bring in 370,000 foreign visitors or less, reduced from an initial 450,000 estimate.

"South Africa has come alive, and will never be the same again after this World Cup," President Jacob Zuma said this week.

The World Cup has a big symbolic importance 16 years after the end of apartheid in a country which suffered racial inequality for decades and where millions of blacks still live in dire poverty.

The event has gone some way to draw people of all races closer together.

Across the country, white and black South Africans are united behind the national soccer squad Bafana, Bafana (The Boys).

South African flags adorn cars, fly from houses in traditional white areas and for months fans donned the national team's strip on a Friday.

"The excitement, the shared patriotism, pride in hosting foreign guests, our new roads and infrastructure all have a benefit and helps to bring people together," said independent political analyst Nic Borain.

The government has spent over 40 billion rand ($5.40 billion) on stadiums, transport infrastructure and upgrading airports.

Critics, including poor blacks living in impoverished shantytowns, have said it was wrong to spend over $5 billion on the sporting event in a country with one of the world's highest income disparities.


Analysts say the long-term impact of the World Cup on South Africa is difficult to quantify and caution should be exercised in predicting a big boost to the economy.

When Germany hosted the 2006 soccer World Cup, it saw a sharp rise in retail spending and services activity before and during the event but a substantial decline afterwards.

"The government is clearly still hoping that the World Cup stimulates investment interest," Nomura International Emerging Markets Economist Peter Attard-Montalto said in a recent research note.

"We remain skeptical because we believe that investors will always eventually focus on the 'bottom line' numbers for competitiveness, costs, wage hikes etc."

South Africa's government hopes to attract millions more tourists in coming years on the back of a successful World Cup and has consistently assured foreign fans they will be safe in a country with one of the highest rates of violent crime in the world.

Zuma, his government officials and World Cup organizers have cited the country's track record in hosting nearly 150 international events and a comprehensive security plan including 41,000 specially-deployed police as evidence that visitors will be safe.

And unless there are instances of high-profile crime or an attack by extremists, foreign perceptions of South Africa will change after the World Cup.

"Barring some catastrophe the overwhelming majority of visiting people's experience will be a lot better than what they have been presented with in their media," said political analyst Borain.

(Editing by Nigel Hunt)