World Cup 2014: Africans Spending Big Bucks In Brazil

By Frank Mutulu AFKI Original Published: June 30, 2014, 2:12 am
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The FIFA World Cup 2014 has brought a much needed impetus to businesses across Africa. African businesses – an ocean and thousands of miles from Brazil – are cashing in from live football action in the South American country.

Travel data and cross border spend on all Visa products, including credit, debit and prepaid payment cards show that Africans are spending big in Brazil, mostly on lodging and accommodation.

Angola, which like Brazil is a former Portuguese colony, is one of the biggest spenders globally in Brazil.

Data from Visa shows that between June 12 and 15 Angolans in Brazil splashed $1.2 million, making them the fifth largest spenders behind Mexico ($1.3 million), France ($1.7 million), UK ($2.3 million) and US ($6.6 million).

South Africans spent $160,653 while Kenyan travelers to Brazil spent $15,403 which is 63 folds more than what they spent over the same four days in 2013.

Visa said that it expects the games to be a bonanza for the host nation based on the surge in spending evidenced by data from transactions.

“These numbers reflect the significant impact that mega sporting events like the World Cup can have in boosting local commerce in host market economies,” said Jabu Basopo, Country Manager for Visa in Southern and East Africa when releasing the results on Monday.

“This positive trend aligns with Brazil’s expectation that more than 600,000 international travelers may visit the country during this event – ultimately boosting the country’s economy,” he added in a press statement seen by AFKInsider.

According to the 2010 report, Visa cardholders from the United Kingdom (US$536 million), the US (US$325 million) and Germany (US$95.8 million) were the top 3 contributors to South Africa’s tourism economy. Of the top 10 inbound source countries for the 2010 event, 4 were SADC countries – Botswana (US$83.6 million), Mozambique (US$78.6 million), Namibia (US$66.2 million) and Angola (US$53.6 million).

Global consultancy PwC says big sporting events usually have a big impact on the merchandising, gambling and other related revenues in countries where soccer is the national pastime.

“Merchandising revenues are also linked to large-scale sporting events and Kenya, as with the rest of Africa, saw an increase in merchandising revenues as a result of the 2010 FIFA World Cup, despite the Kenyan national team not competing at the tournament,” said PwC in a report.

“This figure fell sharply into 2011 as the influence of the FIFA World Cup declined, but grew again in 2012 thanks to the popularity of the London Olympics.”

PwC said that sporting revenues in Kenya stood at $94 million in 2010 but it dropped to $58 million in 2011, attributable to the lack of a major sporting event in the latter year.

Brazil is good, South Africa was better

Locally, companies have also increased their spending on advertising, promotions, television rights, country tours and betting. But the exact amount this world favorite one-month event will earn for firms will be clearly known once the event is over.

Businesses such as Bunson Travel in Kenya have created group travel packages to Brazil, that include air tickets and accommodation, with a four-day package going for $4,211 while an eight-day package goes for $10,200 per person.

Although the FIFA 2014 has spurred some travel-related interest from Kenya, for instance, travel agents admit it is not as good at it was in 2010 during the World Cup in South Africa — the first ever on the continent.

“There has been some interest but it was not like what we had in South Africa,” Simon Kabu, Director of Bonfire Adventures told AFKInsider.

Agents from Shian Travel, a Nairobi-based tour and travel company, said that so far they have organized only three group tours.

The numbers on how much countries have spent will be known in a few months once a proper audit is done but expectations are not if the FIFA World Cup 2014 has brought in revenues but by how much.

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