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Assessing business potential for sports in Africa

Rwanda is one of two African countries likely to be picked to host the cycling Road World Championships in 2025.

It will be the first time Africa will be the final continent to host the championships that feature tours in each continent.

 

With Tour du Rwanda already making a name in the global circuit, hosting the premier event would not only lift the country’s profile but be a boon to the economy. It would also present tremendous business opportunity in the sports industry.

 

Morocco is the other country under consideration by the Union Cycliste Internationale (UCI), the Switzerland-based world governing body for sports cycling competitive events.

 

The final decision will be made in 2021 after the Covid-19 pandemic prevented UCI officials from visiting both countries.

One roots for either country to host the championships. Either way, it affirms the continent’s capacity to host global events, following events such as the Rugby and FIFA World Cups in South Africa in 1995 and 2010, respectively.

But the honour of hosting the final cycling championships in the continent since its inception in 1921 ironically also highlights how events of such calibre are few in Africa compared to other regions.

It speaks to the situation of sports as an industry in Africa. Despite boasting top-flight talent in major leagues in Europe and America, the continent is yet to fully exploit the economic potential in the industry globally valued at over $500 billion.

But it also speaks to the opportunity that exists. With the continent’s middle-class estimated to reach 1.1bn with 690m smartphones in Sub-Saharan Africa by 2050, the African market is ripe and already attracting much global attention.

The NBA’s expansion across Africa with the launch of the Basketball African League (BAL) in 2019 is one example of this appeal.

And with new trends such as the growing popularity of esports, business opportunities abound in the burgeoning consumer sports industry that includes fitness and recreation, sports nutrition and equipment.

One gets a hint of this with South Africa’s e-commerce Sports & Outdoor segment, whose 2020 revenue projection is $429m with an estimated 11.6 per cent annual growth rate through 2024.

Such market opportunities exist elsewhere in the continent though remain unexploited, even as levels of income and spending rise with the increasing health and fitness consciousness reflecting global trends.

Much remains to be done in the continent, however, as top-level global sports events are business propositions. They follow the market in terms of ticket sales, merchandising, sponsorships and partnerships, advertising and other revenue-generating options.

Africa lags behind in magnitude and value of the revenue options. This means that sport in the continent remains largely a socio-cultural spectacle with football being the most popular.

And, mired in poor governance and investment, the game is symbolic of the sports situation in Africa with inadequate facilities including quality of coaching, training and talent development.

Government policies and regulatory frameworks across the continent are also wanting.

They seem keen on recreation and other non-commercial objectives, emphasising ideals such as human dignity, education, equality and peace using sport and recreation to address these issues.

While these ideals are important as development objectives, ensuring laws and policies that enable the commercialisation paves the way for other aspects of sports boosting the economy and creating employment.

Making the investment environment conducive has knock-on effects on talent growth and continuing education for coaches and trainers to ensure the talent becomes world-class.

Such legislation should include economic incentives such as tax holidays for companies investing in or contributing to sports development.

It also calls for a robust legal framework for the protection of media and intellectual property rights to ensure rights holders optimise on benefits from the exploitation of those rights.

editor@newtimesrwanda.com

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