FIFA World Cup: How Small Business Has Lost

Published on 24th May 2010

If you thought the FIFA World Cup is designed to increase revenue generation for “mama njugu” (street women peanut vendors) think again. The FIFA World Cup system can help demonstrate the predicament of African economies vis-à-vis the global system. To prevent what FIFA refers to as “ambush marketing,” thousands of South Africa’s street vendors will not be allowed anywhere closer to 800 meters to the stadiums. Only KFC and MacDonald’s will be allowed unrivaled access to feed football fans.

Unknown to “mama njugu,” FIFA has to protect its sponsors from illicit use of its private sporting event to earn profits. Hosting the world cup is no cheap business. For example, the cost of hosting the 2006 FIFA World Cup was 1.1 billion Euros (estimated Ksh 110 billion).

South African street vendors might smell the coffee but may never take it. Global brands will make most gains having positioned themselves in the whole supply chain; from ticketing, airlines, hotels, taxis and even food. The excluded periphery players may gain (afterwards) from the use of infrastructure left behind assuming that they too would have learnt some tricks from international corporate giants’ presence in their market.   

In the rush to make the most out of the prestige the World Cup brings to a country, the South African government failed to recognize the value its citizens gave to FIFA in terms of space, land and peace, among others. The protection rights agreed upon with FIFA thus failed to recognize “mama njugu” and instead focused only on international corporate citizens that forked in millions of dollars.

I witnessed a similar approach by the Tanzanian government when it hosted the World Economic Forum. In its quest to pursue foreign investors, the government literally closed up sections of Dar es Salaam city to residents, who in turn had to be out of work for a whole week. Commendable as it may (because police outriders cleared traffic for delegates), I was left wondering why similar zeal is not employed to build indigenous investors. Remember, foreign investors are indigenous where they come from!  

The outcome of this misplaced zeal is disenfranchised local businesses and successful overthrow of taste for local goods. Instead of urbanization relying on outlying rural areas for goods; it is  forced to focus on airports and sea ports for products. The beaming of products that had not entrenched themselves in the African market will further displace “mama njugu” from the face of the business world as Africa’s youthful population opt for  the World Cup branded ones. As for the World Economic Forum, Tanzanian investors will find themselves transforming their business into non governmental organizations to “help” the poor as foreign investors dive into profit making ventures.

The predicament of South Africa’s street vendors aptly captures the African producers’ situation – you reap nil benefits unless you understand how the international system works. The upcoming absence of African traders where the market is (stadiums and hotels) is a creation of the law – not an intrinsic lack of ability to sale refreshments to football fans. Developed economies use excuses of health (phytosanitary standards) to deny African indigenous investors markets; they use taxes to prevent value added products from accessing their markets (so Africa exports raw materials) among other regulations. Developed nations instead position international NGOs (INGOS) to come and “fight” poverty on the continent.  

Africa stands to reap from the attention the FIFA World Cup has brought to the continent only if we developed a mechanism to leverage indigenous investors. Africa must strategize to move away from the fate of Mama Njugu.  

By James Shikwati,

James Shikwati [email protected] is Director of Inter Region Economic Network.







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