Olympic symbol rings represent unity between nations of the five inhabited continents. Africa, America, Asia, Australia, and Europe, with South America and North America combined and Antarctica being uninhabited.
Nearly 16 percent of the world’s population lives in Africa. It is arguably one of the richest continents in natural resources. People of African descent have built nations across the globe, often by forcible chattel slavery that ravished the continent of its citizens. However, Africa celebrates such triumphs of humanity. The end of South African Apartheid. Peace in Liberia. The emergence of new international trade relationships. From the original source of the Pythagorean Theorem to the Pyramids at Giza, Africa has produced developments the world marvels. Africa has been the site of many international events. A successful 2010 World Cup held in South Africa drew the 3rd largest attendance in the 80-year history of FIFA.
The contributions of people of African descent worldwide and in every area of society are daunting and far too numerous to list. Indeed, can anyone imagine the Olympic Games without the influence of the African Diaspora? Africa – the cradle of civilization and the genesis of mankind.And yet, Africa has never hosted an Olympic Games. No bid coming from an African country has succeeded in the 116 years of modern Olympic Games. Brazil has been selected for the 2016 Olympics Games. Currently, three cities remain as finalists for the 2020 host location: Tokyo Japan; Istanbul, Turkey; and Madrid, Spain.
Economists have varying opinion as to whether the Olympics yields incremental benefits for the host site. In a Reuters survey, 23 of 27 economists predicted the UK would not see a significant long-term economic boost from the London 2012 Games.
According to London East Institute, the economic impact for host cities encompass several dimensions, including: Legacy Momentum, Operating and Infrastructure Costs, Employment Effect, Skills Development, and The Mega Event and the City Economy. The Barcelona 1992 Games cost $11.5 billion in operations and infrastructure investment, leading to 20,000 permanent jobs and an 20% average annual growth in tourism through 1996. The Atlanta 1996 Games cost $4.9 billion, generated $2 billion revenues, and resulted in 77,000 direct and induced jobs. And a $3.8 billion budget, The Sydney 2000 Games, considered by some to be the best games ever, produced $2.2 billion in revenues, $1.6 billion in convention business, and $6 billion in worldwide media exposure.
Conversely, critics point to a number of negative indicators. Researcher Mark Perryman notes, “Twenty-one out of 22 of the stadiums, arenas, sports halls and swimming pools built for the Games are either derelict, in a state of disrepair, boarded up or unable to find a buyer and underused.” James Giesecke of John Madden of Monash University (Australia) applied recently developed Computable General Equilibrium [CGE] models for ex-ante analysis of mega events to The Sydney 2000 Games. Published as The Sydney Olympics, Seven Years On: An Ex-Post Dynamic CGE Assessment, Giesecke and Madden adjusted for risks inherent in CGE models and concluded Sydney was a net consumption loss:
“CGE models improve greatly on the input-output model, which they have largely displaced, since they incorporate fixed factors and substitution effects. However, like input-output, the method is still subject to the risk of over-optimistic estimation of benefits. We see three sources of such risk: (i) failure to treat public inputs as costs; (ii) elastic factor supply assumptions; and (iii) overestimation of foreign demand shocks via inclusion of “induced tourism” expenditure. In this paper, we undertake an ex-post analysis of the Olympics that addresses each of these risks. We handle the first two directly: public services used to support the Games (such as security services) are treated as Games-specific inputs, and we model the national labour market in full employment. For the third risk, we undertake an historical simulation to uncover the extent, if any, of induced tourism. We find no evidence of an induced tourism effect, and so exclude it from our analysis. With these assumptions, we find the Sydney Olympics generated a net consumption loss of approximately $2.1 billion [over the 997-98 to 2005-06 period].“
No host city is immune to structural risks of a general economic downturn prior to or following an Olympic Games. This alone complicates our determining the success of a particular event. For instance, a 1999 study conducted by Gregory Papanikos estimated the economic benefit for The Athens 2004 Games would include an annual boost in tourism by 450,000 through 2011. However, as 2004, economists were already growing concerned about slowing conditions in Greece, brought about by rising prices, that would depress the positive effects of hosting even an event of this magnitude. Measures implemented by the Ministry of Development mitigated inflationary pressures from increased demand associated with the Olympics. However, problems in Greece lessened the positive impact of The Athens 2004 Games. In-fact, voices within Greece, throughout Europe, and in the international community posit that the Games revealed Greece’s underlying troubles at-least or accelerated conditions that sparked the nation’s current fiscal/economic crisis, at-most.
Given the staggering level of required investment, as witnessed in Beijing’s $40 billion price-tag, the global chase to win a host bid reflects non-economic motivations such as national prestige. Kevin Daley notes, “In terms of the economic impact of hosting an Olympics, there are short-term benefits that derive from the additional expenditure in and around the Games itself and long-term benefits that are less tangible (such as the promotion of the UK as a tourist venue and a potential location for investment).”
AFRICA’S UNIQUE OPPORTUNITY
Historically, host cities have articulated specific legacy goals and/or how Olympics-related development fits within a broader urban and social development vision. London East Institute highlights Holger Preuss’ arguments for linking broader development to hosting an event:
“… so that a good city legacy might include aims towards a city that:
• Is easily accessible by air
• Has international citizens and is culturally complex
• Is equipped with excellent telecommunications systems
• Is economically important
• Is visited by…tourists
• Has a high degree of exchange of knowledge and culture
• Has mixed areas for living, working and recreation
• Has no major traffic problems (Preuss 2004:94)”.
Each factor merits a detailed discussion when considering Africa as an Olympic Games host site. Further, the continent consists of non-homogeneous countries. Therefore, an in-depth study must isolate the feasibility of each country against these factors whether we are considering: Cairo, Egypt; Rabat, Morocco; Yaoundé, Cameroon; Nairobi, Kenya; or Cape Town, South Africa. We can, however, say in a prima facie sense:
- The International Olympic Committee [IOC] could hardly find another region where the Olympics brand would be more celebrated for making a profound impact on society;
- A number of African nations could make their case as a low-cost provider for reasons of prevailing wage levels, currency valuations, cost of land assemblage, etc;
- Africa nations are often far below full employment. As such, hosting the games would not only increase productivity of currently underutilized assets and accomplish this in a way that does not lead to runaway inflation.
- The Olympics offers Africa the critical mass of development to promote integration and, by implication, African unity.
Surely, applicants, investment banks, and economists are equipped to answer these and other questions. I raise the possibilities and encourage the International Olympic Committee to give Africa serious consideration during future rounds of host site selection.
The end of the London 2012 Games will lead to the latest round of debates between the International Olympic Committee, politicians, economists, corporate leaders, and other stakeholders on the return of UK’s investment. But we can be certain that barring some catastrophic global event, the games will continue. Given economic, social, and other benefits which accrue to host nations, what a statement of progress for mankind for Africa to be the final destination of the Olympic torch.
Kenneth D. Price
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