Demystifying Sport Investments in Sub-Saharan Africa!
Big Business in the region is mostly identified as being done by companies in the production of raw materials for export and the resale/distribution of imports to a ready market that has little need for enticement to consume products.  Standard practice in sport across the globe has sponsorship as the identified lucrative model for businesses […]

Big Business in the region is mostly identified as being done by companies in the production of raw materials for export and the resale/distribution of imports to a ready market that has little need for enticement to consume products. 

Standard practice in sport across the globe has sponsorship as the identified lucrative model for businesses in the sport industry. Sponsorship gives businesses that support sport a right to harness the commercial opportunities and potential associated with the sponsored sport property/brand. The big businesses that would traditionally afford to support sport in the region are no longer doing so as they have their markets overseas and in other regions. The heavy export/import architecture of the regional market make it difficult to for businesses to sponsor or associate with Sub-Saharan sport. 

In the absence of the business support through sponsorship, the role to fund sport has been left mainly to the Governments through their taxing powers. Which is how and why sub-Saharan sport remains a liability to its people yet it’s a revenue generating sector in other economies. An improvement of our performance on and off the field will be to a large extent dependent on how the business sector or private capital comes into the sport ecosystem.

Business involvement with a market, in this case the ‘sport consumer’ is driven primarily by the desire for market expansion, brand awareness and profits. Not only does the region have a market, it has a market that has been starved of its needs in the face of a relatively stable purchasing power. This article will touch on four areas that can be stimulated by business investment in sport.

Health and Wellness. Participation in sport and physical recreation activities has been proven to be linked to improved health and well-being of the participant. A healthy individual is an asset to the family unity, community, company and nation. The need to remain healthy at all costs gave rise to the health insurance industry that covers medical expenses for its members should they fall sick; the members then pay premiums per month even when they are not sick. The health insurance industry is encouraged to invest these premiums into assets and markets that can see a sustainable return on investment. Money markets and real estate enjoy most of the capital inflow from these insurers. Businesses that offer medical insurance can invest member premiums in the sport and recreation sector, businesses will therefore realise a return on investment in the following ways:

  • Since participation in sports and physical recreation improves one’s health, the Health Insurers will save on their obligations that they would have paid to doctors who in-turn would have attended to the Insurer’s clients i.e. mostly having fewer visits to the GP as the majority would be fit and healthy. In the United Kingdom Savings can be made from, heart disease and stroke prevention which amounts to approx GBP1 billion for every 150 000 prevented cases, GBP3.6 billion for every 900 000 diabetics cases prevented.
  • A healthy worker is a productive worker. This alone means the health insurer will enjoy having the member pay premiums for a longer period at the same time not depleting income from the insurer due to fewer GP visits.

Textile Industry. The growing of cotton and the textile industry has suffered from the effects of trade globalization that has seen the rise of cheap imports from Asia and second hand clothes from Europe and North America. Businesses can make use of sports consumers affinity based consumption to revive and sustain the local textile industry. Sports consumers are known for their economics defying consumption behavior. In sports consumption, it is affinity that rules the day and not economics. Getting local businesses to invest in the production of sports apparel and fashion accessories can act as a catalyst for locals to support the local textile industry in the face of cheaper imports. A fan can easily purchase a pricey soccer jersey that serves their need to identify with their football team which they are always ready to display their affinity with giving the local textile value chain the much needed support which would not have come if the purchasing decision was to be made for a locally produced suit versus an imported Italian Suit.

Sport Tourism. Recognized by the United Nations as the fasted growing niche market in tourism, sport tourism is the term used to describe all forms of economic activity that take place when sports events that necessitate travel are staged. In our region the management of such events has been left to Sports Governing Bodies and Government and the fulfilling of competition fixtures in their main objective such that the commercial potential is left untapped. Business investment is crucial in the following key sport tourism areas:

  • Sport participation requires special venues. Businesses should invest in travel infrastructure that is presently been provided haphazardly to the multitude of sports consumers that travel in hoards to participate or watch their sport.
  • Sports activities bring together a lot of purchasing power usually at one locale. Businesses should come up with trade activities that can capture income from the sport euphoric spenders.

Production. The participation in sports at all levels requires specialized equipment in the form of venues, equipment and apparel. Apart from the generality of the sport loving people, it’s a bonus that sport is compulsory for most school going people and this creates a lucrative market that businesses can service at a profit. Our businesses that produce and export such items as wood and steel that then come back as expensive imports in the form of hockey sticks, should be encouraged to practice value adding initiatives to at least service the local markets. That way business can also assist in dealing with the economic leakages that result from exporting at low prices in pursuit of foreign currency only to use the same foreign currency to buy overpriced imports made from the cheap raw materials. Businesses can also invest in the construction and maintenance of the specialized venues used for sport. A fee based service would see a good return for the investor.

There is no single or best way for society to organize its sport systems and practices. In the region it’s clear that the public sector cannot be left alone to invest in sport given the pressure on national budgets. At the same time it should be noted that the strain on national budgets does not translate to lack of purchasing power. The market has a lot of purchasing power that is seeing global brands competing for clients in our backyard hence local businesses should step in and invest in the lucrative sports ecosystem.

Leave a Reply

Your email address will not be published. Required fields are marked *