Economic value of sport in Zimbabwe

                                                     

                                                     

 

                                                       Bernard Gwarada 

The sports sector has a pervasive influence in the lives of people either directly or indirectly.

In my previous article, I focused on football as a potential source of economic dividends, not only to the individual participants, but to the nation as a whole.

However, if justice is to be done to this important area, it is critical that the potential economic value of sport be looked at holistically.

This will enable stakeholders and decision-makers to focus on sport as a source of income generation and associated benefits such as putting Zimbabwe on the global map and positioning the country to benefit from sports tourism.

It may be asked, how Zimbabwe fares in terms of treating sports across the board as a potential source of economic rejuvenation. The answer to this question will emerge around a discussion of the areas listed below.

Sports value

It is heartening to note that the Government adopted a national Sports and Recreation Policy in August 2016 which was inclusive in its orientation and acknowledged the importance of sport as a mega business.

The policy acknowledged that the world sporting industry was worth US$620 billion in 2016.

This implied that as a country we had to put in place measures to ensure that we also benefited from this amount.

This policy was to be reviewed after five years. However, three years down the line, it cannot be said to be unfair if one was to ask how much progress sport has made in terms of benefiting from the US$620 billion industry?

In Zimbabwe and when national teams (of various disciplines) are playing, the stadiums are usually packed to full capacity, thus giving the impression of a thriving sector.

In this sense, sport may be said to be thriving and yet the missing ingredient is that it is yet to realise its full potential as a significant player in the country’s development plans and as a contributor to GDP.

A key problem with the aforementioned sports policy is that, no monetary targets were put in place to aim at so that after the five-year review period, one could assess in an objective way whether or not the set targets had been met. There is also need to put a value on Government’s investment in sport and the expected return in monetary value.

For instance, research reveals that in Ireland for every €100 the government invests in Irish sport, the sports industry creates up to €195 in tax revenue.

Policy

Policy is an important variable in the activities of an organisation or country. This is because it provides guidance and direction as to what may need to be done for set goals to be achieved. In 2018, the Ministry of Youth, Sport, Arts and Recreation contributed 6,9 percent to the country’s Gross Domestic Product (GDP).

The problem is that this ministry is made up of four arms and the specific contribution of sport is buried in the global contribution of this creative and cultural industry.

Given that sport has become a mega business worldwide, and Zimbabwe wants a share of this cake, it is vital that the contribution of sport to the GDP be clearly spelt out as a matter of policy so that it becomes a basis for decision-making.

An important cornerstone of the sports and recreation policy seeks to ensure that the country has representations in various international sports bodies.

For example, Mr Tommy Sithole has been a member of the International Olympic Committee (IOC) and has represented the international sports community at the United Nations as director and deputy representative at IOC Observer Mission to the United Nations in New York. He was also secretary-general of the Association of National Olympic Committee of Africa.

Dr Philip Chiyangwa is the current Cosafa president. The current Minister of Sports Kirsty Coventry is former Olympic swimmer, a world record holder and the most decorated Olympian from Africa.

Top Zimbabwean match official Felix Tangawarima sits on the Confederation of African Football’s referees committee. The above sportspersons, through their various assignments, raise the profile of the country and generate interest from potential investors and tourists who visit the country.

A case in point is when Dr Chiyangwa invited UEFA president Mr Aleksander Caferin to Zimbabwe in January 2020. The UEFA president reportedly pledged to use his links to promote Zimbabwe as an investment destination.

Governance

Sound governance is an important precondition for the success of any institution, including those in the sports industry.

The area of governance has been one of grave concern in the sports industry in general.

For example, Cricket in Zimbabwe is currently on a resurgence following years of wrangles and allegations of maladministration.

Zimbabwe cricket has a glorious past which the current administration is seeking to redeem. It must be stressed that allegations and counter allegations of maladministration are not good for the sports industry as this often leads to withdrawal of sponsorship which sports organisations need.

In conclusion, sport is an important component of the socio-economic development of a country. It is regrettable that data on the economic value of sports as an industry in Zimbabwe is not available. Such data can assist both the Government and investors to make strategic decisions.

Bernard Gwarada is a research candidate in International Business at University of Pretoria’s GIBS Business School. He is a co-owner of former Premier League club, Douglas Warriors FC and a former ZIFA board member.   Feedback: blgwarada@yahoo.com

How football can contribute to Zimbabwe’s economy

                                

                                      

Football has shown its great potential to generate income from the match day ticket sales, broadcasting and commercial sources such as sponsorship and merchandising.

  Bernard Gwarada 

Over the years and worldwide football has evolved from being a social activity into a commercial venture with the potential of impacting on a country’s Gross Domestic Product, resulting in job creation and poverty alleviation.

Football has gone global as a business which requires that it be studied in its own right as a field of economic endeavour just like any other industry.

Indeed, sports management is now a respectable field of study at University level across the world including Zimbabwe.

Football has shown its great potential to generate income from the match day ticket sales, broadcasting and commercial sources such as sponsorship and merchandising.

The impact of football on a country’s economy can be staggering.

For instance, in the UK and in the 2016/2017 season alone, the premier league made a contribution of £3.3 billion in taxes and also the league created 100,000 jobs.

The phrase “football economy” shows the acknowledgement now given to football as an important source of economic and commercial activity.

In stark contrast, and in the developing world, football has not been run commercially as a business.

Closer to home, research has shown that over the years, football in Zimbabwe has not been run professionally and commercially due to incessant wrangles for positions and poor governance.

This has undermined the country’s ability to enjoy the potential benefits that can accrue from the running of a sport such as football in a sound, professional and commercial manner, so that it contributes to the country’s GDP.

There are many areas that can assist in bringing about sanity in football administration in Zimbabwe.

However, this article explores only five such areas that can contribute to the turning around of football management and its fortunes as shown below.

Investment in the sport industry

Sport infrastructure is critical for the development of football and its running successfully. At its most basic level, local footballers will have the opportunity to train in facilities that reflect world class standards.

Furthermore, such infrastructure can benefit other economic sectors such as tourism, real estate and retail.

World class teams can be attracted to come to Zimbabwe for off-season training camps, thus boosting tourism.

For example, Manchester United has got slots for games in South Africa during its off-season period. If the football infrastructure was poor in South Africa, it would not have been possible for this arrangement to come to fruition.

Sound infrastructure will assist in the country’s bidding for the hosting of international football tournaments.

A successful bidding has got massive implications for revenue generation and creation of employment, for example in the construction industry.

However, the government must formulate a football policy in terms of running football in the country and should also be in a position to provide the requisite guarantees to support the bids.

In order to attract corporate football sponsorship, the government may consider giving special tax incentives to ensure an active development of the game.

The current ban of all stadiums in Zimbabwe by CAF from hosting international matches was because the stadiums did not meet required international standards.

The CAF ban shows an apparent lack of seriousness in the way in which football is administered in Zimbabwe. The country has not lost only the opportunity to host the games, but also the economic benefits arising from the hosting of such games.

It is, however, encouraging to note that the government has released $13 million to be used for refurbishing parts of Barbourfields and $22 million for the National Sports Stadium.

Development

Club licensing is part of football development aimed to raise minimum standards in football governance. In other words, it is a template for the meeting of certain prescribed standards for the development of football clubs.

The template incorporates areas such as sporting, infrastructure, administrative, personnel, legal and financial.

However, clubs in Zimbabwe have failed to wholly meet the set standards in the respective areas of concern due to a lack of resources and to some extent ineffective leadership and maladministration.

The bottom line is that such failure negatively affects the professionalisation and development of football in Zimbabwe.

The onus, no matter how onerous, still remains on the club leadership to ensure that the set standards by FIFA and CAF are met if local football is to come out of the woods and become a viable commercial proposition which will benefit not only the clubs but the nation as a whole.

Again, for the football to develop, it is my view that there is need to take advantage of the existing structures such as the school system were football should be part of school curriculum.

Football academies should receive funding since it’s the place where junior footballers start from to become professional players.

In Bulawayo, Bantu Rovers produced our current UK based top player Marvellous Nakamba, while BN academy in Harare has been bringing into the country top European coaches to Zimbabwe for school holiday training camps, and this has resulted in four teenage players going for trials in Germany.

Former player Alois Bunjira is running Alban academy in Chitungwiza assisting children to achieve their dreams.

Effective business strategies

Football can learn from business and business can also learn from football. This is because there are a number of similarities between football and business.

For instance, for both to succeed they require competent teams, both need to understand their strengths and weaknesses and those of their rivals.

As pointed out earlier, commercialisation has pervaded the game of football at a global level. Commercialisation is also an intrinsic part of business.

Both football and business have set goals which need to be met. However, for this to happen there is need to put in place well thought out strategies supported by the requisite resources.

With regard to football in Zimbabwe, such strategies should exist at a number of levels such as ZIFA, Sports and Recreation Commission, Ministry of Sports, football clubs and Ministry of Tourism.

The government and ZIFA need to seriously consider commercialisation and internationalisation of the senior national teams as a game changing strategy.

Such a strategy has worked well elsewhere.

For example, the Nigerian Football Federation partnered AS Roma a top Italian team. AS Roma and the Nigeria Federation agreed to work together on areas of common interest such as player development, football administration as well as technical and operational support.

Unity of purpose

Unity of purpose is a prerequisite for the success of any organisation. When things are not right and there is continuous wrangling, (as is happening in Zimbabwean football at national level) this tends to detract from goal achievement.

Zimbabwean football will not develop to the required potentially beneficial levels as long as it is characterised by animosity and struggle for power and positions.

If people stick to the rules of the game and the constitution, there would be no need for the wrangles that have poisoned the football game and stunted its development in Zimbabwe.

The recent lifting of bans on senior football officials perceived to be enemies of football is a welcome development.

The ZIFA President has taken a commendable step.

Accountability

Goal achievement in football involves the participation of various stakeholders.

In that regards it becomes critical that areas of accountability be clearly spelt out so that progress is not undermined or stalled because it is not clear who should be doing what.

A case in point is the CAF stadium ban where parties tried to run away from the responsibility.

However, it is heartening to note that it has now been agreed that the Ministry of Sport will take over the ownership and management of the National Sports Stadium.

Media reports have revealed that at ZIFA, there are some responsibilities that are supposed to be carried out by the secretariat but end up being done by the executive committee.

Such a state of affairs also undermines accountability and governance and tends to discourage would be sponsors.

It is refreshing to note that FIFA now provides funding to participating national teams for tournaments on its calendar. Lack of funding has been a constraint to ZIFA over the years.

However, ZIFA would still need to forge strategic partnerships with sponsors to support its other areas of economic need such as player bonuses. Such an endeavour can only succeed when ZIFA is able demonstrate good marketing acumen backed up by a solid corporate governance record.

Bernard Gwarada is a research candidate in International Business at University of Pretoria’s GIBS Business School. He is a co-owner of former Premier League Club Douglas Warriors FC and a former ZIFA Board member. He writes in his own capacity.  Feedback: blgwarada@yahoo.com

Survival strategies for Zim SMEs

Businesses in Zimbabwe are operating in an unstable environment, and in such an environment, SMEs tend to be victims particularly when the economic crisis becomes prolonged. Research has shown that such an environment offers both threats and opportunities to different types of businesses, including SMEs.

The million-dollar question, therefore, is: what can SMEs do to remain relevant and successful in such a debilitating environment?

This article discusses some survival strategies relevant to SMEs in Zimbabwe which they can adopt in order to continue to survive and prosper.

In general terms, any business, including an SME needs to have answers to the following two key questions around which a number of strategies can be framed; are we still relevant in this environment as a business and, how do we compete in this environment as a business? With reference to the current scenario in Zimbabwe, the following are the strategies that can be recommended for the survival of SMEs.

Costs control

It is vital that under such an environment, an entrepreneur makes it a habit to review the cost structure of the organisation with a view to bringing the costs down. The aim should be to increase productivity while at the same time reducing production costs. Organisations can look into the following areas; freezing on recruitment and ensuring the available human capital is fully utilised through employee multi-skilling, managing of utility bills, especially those for telephone and internet bills. There is also need for the owner of a SME to be exemplary through a modest and not flamboyant lifestyle. Embracing of digital technology should be seriously considered by SMEs as a way of cutting on costs. The use of social media for example can cut traditional advertising costs incurred through the use of billboards, TV and radio advertising.

Differentiation

Differentiation is a strategy based on distinguishing a product or service from those of competitors. SMEs need to consider adopting this strategy, which is innovation driven and leads to the introduction of new products and services at lower cost, but without compromising on quality.

In this respect, examples abound in the Zimbabwe fuel sector, where multinational companies ride on their brand names and differentiate their products focusing on customer values and quality.

On the other hand, indigenous fuel players (SMEs) differentiate their products through targeting price sensitive segments of the market.

In the transport sector, due to the current extreme shortage of cash, some operators became innovative by introducing swipe machines and mobile money services in their buses for passengers to pay for their ride.

Customisation

In order to ride the storm of economic adversity, SMEs need to consider customising their product and services to offer tailor-made solutions. Tailor-made solutions are important because they are designed around the unique needs of a customer and thus promoting customer loyalty. This strategy is particularly important in the current environment of economic vicissitudes where a customer may be tempted to switch to another service provider or supplier.

Diversification

Diversification within the context of economic problems allows an SME to spread its risks by pursuing new lines of products and businesses.

It helps the organisation to build stability. For instance, in the travel and tourism industry sector, an entrepreneur can consider diversifying into related fields such as airline operation, lodges, gift shops, and restaurants.

Mind-set of owners

Research has shown that a tenacious mind-set predisposes owners of SMEs to succeed even in periods of economic difficulties and hardships. Such owners do not easily give up and remain focussed on driving the organisation relentlessly to success. This is the reason why some SMEs have expanded and grown during such a crisis ridden period.

Networking

Getting involved with an entrepreneurial community (as opposed to remaining isolated) is a good strategy for the survival and success of a SME.

This is because it allows the entrepreneur to leverage on the social capital that exists among people on the same journey through, for example, SMEs International Expo, Zimbabwe Cross Border Traders Association, SME Association Zimbabwe, Zimbabwe Informal Traders Association, Zimbabwe Miners Federation and Zimbabwe Women Association.

An SME needs not pursue any one of the above mentioned strategies to the exclusion of others. Where a multi-pronged approach is taken, this puts the SME in a stronger position to survive and succeed.

There are also other strategies that some SMEs have adopted which have resulted in their apparent success and prosperity.

This article first appeared in The Herald.  https://www.herald.co.zw/survival-strategies-for-zim-smes/