Economic Opportunities

Come June 2010, an estimated 2.7 million spectators will watch the FIFA World Cup™'s 64 matches played around the country. And when the final is shown, a television audience of up to 28 billion people will have their eyes glued on South Africa.

2010 is an opportunity to speed up growth and develpment, to market this country and the continent to the world; and an opportunity to grow local entrepreneurship.

Although certain areas of commercial activity are limited to FIFA and its sponsors - and there will be strict restrictions on sales, marketing and advertising in designated areas such as stadiums - there will still be openings for local businesses.

Government and business

Bigger businesses, especially those in South Africa's sophisticated financial services sector, stand to benefit from the World Cup. They should have no difficulty taking advantage of 2010's economic opportunities.

For this reason, this sector needs no major interventions by the Government - apart from ensuring that ways are found in which these established businesses can support the development of smaller businesses.

The Government plans major interventions within the informal retailing sector, where many businesses are run by people who have been historically marginalised.

The informal sector plays an important, although often unrecognised, role in the economy. One form of assistance is being planned in the form of increasing access to retail technologies, such as those supporting electronic transactions.

BBEEE and SMMEs

Black economic empowerment and the development small and medium-sized enterprises, or SMMEs, are crucial elements in the Government's plan to nurture the business sector and boost economic growth.

The strategy of black economic empowerment was conceived to undo that legacy of apartheid that excluded the majority of South Africa's people from proper participation in the economy. The starting point for this strategy - formally known as broad-based black economic empowerment, or BBBEE - is that the country requires an economy that can meet the needs of all its people in a sustainable manner.

The Government will undertake state procurement for 2010 within existing policies and practices that both further the aims of BBEEE and help develop SMMEs. It also has agencies to provide support and advice to small businesses - including to help them take up opportunities in various sectors that stand to benefit from 2010.

Growth sectors

Small, medium and micro enterprises will be able to take up business opportunities created in the ripples of the 2010 World Cup. The hundreds of thousands of visitors who will pour into the country during the event will boost oportunities in accommodation, health services, travel services, short-term insurance, event management, logistics, arts, crafts and entertainment - to name but a few.

Tourism

Visitor numbers to South Africa, which is already a major tourist destination, should be boosted significantly during and after 2010. Small businesses in the hospitality sector stand to benefit widely.

Accomodation establishments seeking to benefit from the World Cup must be graded. The Tourism Grading Council funded by the Department of Environmental Affairs and Tourism, has increased its capacity and is forging ahead with the grading of accommodation providers throughout the country.

MATCH-AG, a company designated by FIFA to organise accommodation for 2010, has signed an agreement with the Tourism Grading Council to ensure that there is enough graded accommodation by the time the World Cup takes place.

For the first time in its history, FIFA will be contracting non-hotel accommodation such as national park accommodation, bed and breakfasts, lodges and guesthouses during the 2010 FIFA World Cup. While the event will benefit the entire tourism industry in the country, it also presents a unique opportunity for the huge numbers of smaller accommodation establishments.

FIFA has appointed Management of Accommodation Ticketing Computer/IT Solutions Hand-in-Hand Services (Match), to be responsible for accommodation, ticketing and information technology during the event.

Match provides event services to FIFA for all FIFA tournaments, in order to:

• Provide appropriate accommodation at fair prices and reasonable terms.
• Ensure efficient access to accommodation.
• Provide contracted services.
• Promote the image of the FIFA World Cup.
• Promote the image of South Africa as host country.
• Co-ordinate the provision of accommodation with other departments such as transportation, security, protocol, etc.
• Provide a complete and cost effective accommodation solution for the Local Organising Committee and FIFA.
• Identify suitable hotels to meet the specific requirements of every FIFA World Cup constituent group.
• Provide a single entry point for the accommodation needs of all FIFA World Cup constituent groups.

Accommodation Criteria

In order for Match to consider accommodation for the 2010 FIFA World Cup:

• The accommodation must be located in host cities, or in a designated satellite area. These satellite areas must comprise no less than 200 rooms.
• The accommodation must be graded by the Tourism Grading Council of South Africa (TGCSA).
• A standard accommodation contract must be signed with Match setting the terms and conditions governing the relationship between Match and the accommodation owner/operator.

Grading

The TGCSA conducts the grading process and ensures that the establishments meet the required standards and quality levels. Only establishments satisfying the minimum requirements listed below will be considered for grading:

• Public liability insurance
• Safety and security of clients and staff
• Health and safety certificate-fire and building regulations
• Registered as a business with the provincial authority
• No unlawful discrimination on the basis of race, gender, citizenship,
• physical and mental conditions, etc
• Smoking regulations

Accommodation owners or operators who want to be considered by Match for the accommodation needs of the FIFA 2010 World Cup must therefore contact the TGCSA to initiate the grading process.

TGCSA contact

Telephone: (011) 895 3109
Fax: 086 611 2405
email: enquiries@tourismgrading.co.za
Website: www.tourismgrading.co.za

Match contact

Telephone: 086 072 2010
email: 2010contract@match-ag.com

Support and Advice

Entrepreneurs need to be realistic about the opportunities the World Cup will bring - and should get help before opening a new business or expanding an existing one. Fortunately, a number of government agencies are working hard at ensuring smaller enterprises can grab the opportunities of 2010.

The Department of Trade and Industry

The Department of Trade and Industry is identifying sectors in which effective smaller enterprises can claim a fair share of benefits. The department has a programme to explain the potential benefits to SMMEs.

The Small Enterprise Development Agency

The Small Enterprise Development Agency (Seda) was established in December 2004 under the National Small Business Act.

Seda lends support to emerging entrepreneurs, especially to the previously disadvantaged. When it comes to the World Cup, Seda's job is to ensure widespread participation by small businesses and co-operatives in the economic opportunities of 2010.

Seda is also tasked with:

• setting competency requirements for smaller enterprises
• ensuring that procurement processes are streamlined and simplified
• forming partnerships to provide for skills and technology transfer
• maintaining and updating a database of suppliers from the small business sector.

Because the World Cup matches will be spread over 10 stadiums in nine cities, the economic benefits will reach beyond the metropolitan areas. Seda and the Department of Trade and Industry will ensure that the support provided stretches to many areas of the country.

To contact Seda:

telephone 0860 103 703
e-mail tbolani@seda.org.za
write to PO Box 56714, Arcadia, 0007
visit www.seda.org.za

Industrial Development Corporation of South Africa (IDC)

The Industrial Development Corporation (IDC) is a development finance institution whose primary objectives are to:

• contribute to the generation of balanced sustainable economic growth in Southern Africa
• further the economic empowerment of the South African population, thereby promoting the economic prosperity of all citizens.

The IDC has a number of strategic business units - one of which is dedicated to investment in businesses related the upcoming Word Cup. The focus is on the funding of economically viable businesses related to 2010, such as:

• tourism
• information technology
• media and motion pictures
• bridging finance, revolving credit and guarantees for a variety of service providers.

The IDC can help you develop a project or idea.

Applications for finance should be submitted by way of a business plan setting out the project details and financial projections. Care should be taken to submit as much detail as possible; this will shorten the possible funding assessment period.

Contact the IDC for more information or to apply for funding:

telephone 086 069 3888 or 011 269 3677
e-mail callcentre@idc.co.za.
visit www.idc.co.za

There will be a campaign to educate South African businesses on the tournament as a protected event.

Restrictions

Legislation strictly protects FIFA's trade marks and reserves certain areas of commercial activity for FIFA and its sponsors alone. Large events like the World Cup are made possible because of the large amounts of money paid by sponsors, and these sponsors rights are protected. Government gives this protection to large events on the basis that they are in the public interest.

While opportunities for entrepenuers will be available, businesses and entrepeneurs seeking to benefit from the World Cup need to understand and comply with the law.

The source of these restrictions is the Merchandise Marks Act 17 of 1941, which outlaws the application of false trade descriptions to goods, provides for the protection of prohibited marks and prohibits ambush marketing. Ambush marketing is when a business which is not an official sponsor associates itself with an event, but without using any of the official trademarks.

Section 15(A), an amendment to the legislation, prohibits the use of a trade mark in relation to a protected event (in this case, the World Cup) without prior authority from the event's organiser. So, for example, a local clothing manufacturer may not - unless it is endorsed as an official commercial affiliate - print the FIFA logo on T-shirts to be sold during the event.

The Act makes the unlawful use of trade descriptions and emblems a criminal offence. If a trader conducts business in contravention of the Act, any person may institute criminal proceedings or approach the High Court for relief.

Section 20 sets out the penalties. Any person convicted of an offence in terms of the Act is liable:

• in the case of a first conviction - to a fine not exceeding R5 000 for each article to which the offence relates, or to imprisonment for a period not exceeding three years, or to both such fine and such imprisonment
• in any other case - to a fine not exceeding R10 000 for each article to which the offence relates, or to imprisonment for a period not exceeding five years, or to both such fine and such imprisonment.

In addition, the court may also order the confiscation of the goods in respect of which the offence was committed.

The Merchandise Marks Act makes provisions for certain areas such as stadiums and fan parks to be designated as exclusion zones - in which prescribed commercial activities may only be performed by persons identified by the Local Organising Committee (LOC).

FIFA's commercial rights will be protected by the National Rights Protection Committee - which includes representatives from the Department of Trade and Industry, FIFA and the Organising Committee.