ECONOMY: Some Sectors Set To Flourish After 2010
Recent Western Cape Business News
FNB expects some business sectors in Western Cape to flourish within two years of the Football World Cup due to the region’s heightened exposure to first-time overseas visitors to the event this year.
The bank has also dramatically overhauled its finance and banking arrangements to boost 2010-linked entrepreneurship and facilitate football- and travel friendly transactions for visitors to the Cape.
FNB Western Cape provincial chairman, Stephan Claassen, says the biggest beneficiaries in Cape Town and the province of the Football World Cup event will be tourism, IT, call centre, BPO, agriculture and shipping sectors while the number of conferences in the Western Cape is likely to increase significantly once the three-week event is finished.
“Experience elsewhere in the world has shown that about 70% of foreign visitors to such big events return for a second visit within two years. People normally want to repeat the experience and share it with their families and friends back home. On average they only watch about three or four matches during the event and spend time getting to know the country during the rest of the time. It is then that they normally travel and become aware of investment and business opportunities in the host country – a scenario that then necessitates follow-up trips – normally within two years to explore the opportunities and sign contracts.
Claassen says chances are slim that the Western Cape will be attracting heavy industrial-type investments, but other sectors stand to benefit.
“With the excellent infrastructure in telephony and communications systems and broadband, as well as our affordable and skilled labour force in this province, we expect the growth to come from an increase in call centres and business process out-sourcing in Cape Town and surrounds.”
He says improved economic prospects in these sectors due to the World Cup can lead to the Western Cape outperforming India – a country presently in the forefront of global call centre and BPO activity in the world.
“Factors that particularly favour this type of growth in Cape Town is the city’s comparatively cheap office rental space and the fact that South Africa has a skilled labour force. South Africa also falls in the same time zone as the UK, and is closer to the US where the world’s biggest demand for call centres and outsourcing lies. This of course gives the Western Cape a significant competitive advantage over other current call centre destinations.”
Claassen says regarding the number of conferences held in Cape Town and the Western Cape every year, these too are likely to pick up after the World Cup.
“Following the Olympic Games in Barcelona, the number of conferences there increased twenty fold.”
Claassens’ views are backed by the ASEF/Alliance, a research company funded chiefly by the European Alliance for Asian Studies. It found that the “capacity of major international sporting events to shape and project images of the host, both domestically and globally, make them highly attractive for political and economic elites.” Meanwhile, FNB is focussing its banking and finance requirements in the run-up to this year’s event. The bank invested US$30m in the sponsorship and a further similar amount in working the sponsorship.
Claassen says in the tourist and hospitality sectors, FNB is offering comprehensive loans to guesthouses and other tourism entrepreneurs. The bank will also handle foreign exchange transactions from its customers that are successfully registered with the Reserve Bank to accept payment in foreign exchange.
FNB’s Speedpoint devices are the only local point-of-sale devices that can accept China Union Pay cards carried by Chinese consumers.
“Furthermore, World Cup tickets can only be bought in two places: online, or at FNB branches. After the 4th of December final draw last year, a further 2.2 million tickets became available. FNB is geared to ensure that the process of getting tickets through our branches runs smoothly. Together with support from organisations such as Cape Town Tourism and Cape Town Routes Unlimited, we believe this major international football event will grow the key sectors in the region very significantly,” Claassen says.
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