By Chase McCarthy via LinkedIn
It is well known that sports have an immense socio-economic and cultural impact on the communities in which they operate. From professionals to youth, sports impact a multitude of facets within a community through increased financial resources, comradery, and teaching fundamental life skills – such as the importance of working hard to achieve a goal, working within a team to better the collective group, and playing by the rules. In Africa however, the role of the sports in economic and social development has yet to be fully realized.
Africa has a population of 1.3 billion people (roughly 16% of the world’s population) and is set to experience significant growth over the next 30 years as the continent’s population expects to rise to 2.5 billion people by 2050 (roughly a quarter of the world’s population) with 26 of its 54 countries estimated to double their current population size. Africa has 21 of the 30 fastest growing cities in the world (based on population) and hold the top 10 places on the list. The continent also has one of the youngest age demographics in the world with a median age of 19.7 years compared to Asia at 32 years and North America at 38.6 years.
In addition to population growth, Africa is also predicted to see significant economic growth. Africa’s combined GDP is USD$2.58 trillion, however, there are numerous concerns over the accuracy of reporting due to scarce data and the majority of the continent’s national statistic services being underdeveloped. In 2014, Nigeria overhauled its GDP data for the first time in 20 years and saw its GDP nearly double from USD$270 billion to USD$510 billion. In addition to inadequate GDP reporting, the fact that a significant portion of economic activity across the continent occurs in the informal sector further undermines the reliability of GDP statistics … in Sub-Saharan Africa the informal economy accounts for two-thirds of all employment and in some cities, such as Kampala, Uganda, this figure reaches 80%. A metric that fails to measure such a significant amount of economic activity cannot be the sole basis for investment decisions and it appears that several investors are recognizing this. In 2019, the continent’s economic growth stabilized at 3.4% and was expected to rise to 3.9% in 2020 before COVID-19. The continent is projected to experience vast economic growth in the next thirty years and by 2050 Africa’s combined GDP is expected to top USD$29 trillion… which will be bigger than the European Union.
With one of the fastest growing populations and economies in the world, it is clear that there is boundless potential for sports to significantly shape Africa’s future and Masai Ujiri, a Kenyan-Nigerian sports business executive and President of Basketball Operations of the Toronto Raptors, emphasizes that: “sports and the business of sports is the biggest opportunity for the next generation of Africa.” Sports have the opportunity to significantly drive Africa’s economy and the continent has already experienced its effect, most notably at the 2010 World Cup in South Africa which led to the local government investing USD$3 billion and FIFA USD$1.3 billion into the nation. Hosting the 2010 World Cup contributed USD$509 million to the national GDP and generated USD$769 million to households (USD$228 million to low income families). An influx of major sports events, such as the World Cup, and an increase in domestic sports events can generate a surge of capital within a local community.
In addition to financial benefit, sports have an immense social and cultural impact. Sports play an important role in the values system of humans – they constitute a distinct kind of social organization, provide a basis of social identity, represent a unique form of social activity, and act as an agent of social control. Fanbases pride themselves on their ability to support their local (regional and national) team and league, often debating with one another which following offers the best support and motivation. Cheering for “your” team can encompass an entire population and induce a sense of passion that unites us all. Having just one team from a nation play in a sports league can showcase an entire country’s unique culture and unite people in a way that nothing else can … just take a look at how Canada has come together through the Toronto Raptors We The North campaign and the way the nation celebrated after winning the 2019 NBA Championship.
Across the continent, football (soccer) is the most popular and played sport, in large part due to the minimal costs and resources needed. According to Nielson, African nations general interest in football and participation are some of the highest in the world. In fact, Nigeria is the most engaged football market globally with an incredible 83% of the population interested in the sport and have a participation rate of 65% ... 15% higher than second ranked Egypt and 20% higher than third ranked South Africa.
Basketball has also become increasingly popular across the continent. Similar to football, basketball’s minimal costs and resources make it an accessible game for many and it is especially popular among youth who see more and more players in the NBA from Africa or having African roots (there are currently 13 African-born players in the league and nearly 40 with one African-born parent). According to the FIBA World Rankings, African countries are becoming more competitive basketball nations; the Nigerian Men’s team topped the continent ranking 23rd in the world; the Mali Youth Men team rank 20th; the Nigerian Women’s team rank 14th, and the Mali Youth Women’s team rank 16th. In the Men’s, Women’s and Youth Men’s categories, African nations hold the top two rankings for highest climbers and in the Youth Women’s category, Rwanda ranks third, which shows that the development and popularity of basketball is increasing across the continent.
While football and basketball are not the only popular sports in Africa (athletics, cricket, and rugby are also very popular), these two sports possess the greatest ability to shape socio-economic growth across the continent through increased commercialization. The global sports industry was valued at USD$488.5 billion in 2018 and was expected to climb to USD$614.1 billion by 2022 (prior to COVID-19). While the value of the African sports market is uncertain (due to the lack of much needed data and reporting), the continent’s sports industry is under-developed and under-commercialized. Sports have a much greater economic impact than just on the athletes … the financial gain from tourism, broadcasting, partnerships, concessions, match day stewards, and merchandise significantly influences the wider business ecosystem and drives increased cash throughout the entire local economy. Elevating the sports industry in Africa will act as a significant economic engine and impact entire nations through this process. Not every country in Africa will immediately benefit from a more robust sports industry, but as the industry develops and grows in certain nations and regions, more countries will feel the positive impact sports has on people and economies and continue expanding until it influences every single country in the continent.
Professional Leagues in Africa
The state of professional leagues across Africa has significant room to grow as numerous federations, leagues, and organizations lack necessary capital and many are riddled with corruption, player pay issues, a lack of contracts, and no (or minimal at best) commercial deals in the form of broadcast and partnerships. While there are a few leagues that have relative viability, such as the Egypt Premier League – USD$178 million valuation, Botolla Pro (Morocco) – USD$166 million valuation, and ABSA Premiership (South Africa) – USD$160 million valuation, they are an anomaly to the lacklustre state of professional leagues across the continent and pale in comparison to the financial success of leagues around the world. The immense issues of professional football in Africa reached a tipping point last year when FIFA intervened in the Confederation of African Football (CAF) – the administrative and controlling body for African association football – administrative processes due to severe mismanagement and the precarious professional football ecosystem. The state of the CAF in recent years has been shaky to say the least … the 2019 CAF Champions League Finals – the federations premier event – ended in protest after Wydad Casablanca refused to finish the game because of a non-goal call that could not be reviewed because of a broken video assistant referee (VAR). To make matters worse, CAF President Ahmad Ahmad was detained in 2019 by French police due to allegations of corruption and is currently under investigation by FIFA’s ethics committee over financial misappropriation, allegations of corruption, and sexual harassment. Ahmad is not the only example of maladministration in African football but presents the most compelling example as the person leading professional football in Africa has shown incompetency and poor ethics, which paints a bleak picture of the management practices present in African football.
Professional basketball in Africa has not fared much better so far but looks to be the catalyst the African sports industry needs, in large part due to the National Basketball Association (NBA). The decade since opening the NBA South Africa office in 2010 has been instrumental for the NBA with an influx of African players now in the League and for Africa with the capital and expertise the League has invested through yearly basketball camps, opening an NBA academy in Senegal, playing numerous NBA Africa Games, and most notably creating the Basketball Africa League (BAL).
In February 2019, the NBA and FIBA announced the formation of a new continental professional basketball league and has seen the NBA commit USD$186 million to the league, opened a BAL office in Senegal, and recruited local and global experts to run the business. The BAL was set to launch on March 13th but was postponed indefinitely due to COVID-19. The League consists of twelve teams split between two conferences – the Sahara and the Nile – with each team playing 5 games and the top 3 teams advancing to the Super 6 – a single-elimination playoff format. The BAL is set to be played over 10 weeks in 7 countries – Senegal, Morocco and Angola hosting the Sahara conference’s regular season games, Tunisia, Egypt, and Nigeria hosting the Nile conference’s regular season games, and Rwanda hosting the finals week – with each conference congregating in the same city over a weekend to play games.
In order to ensure that the League focuses on empowering local athletes, the BAL requires each team to have 8 local players and is only allowed four foreign players, two of which have to be from another African country. This greatly encourages the development of players within a team’s nation and ensures that foreign players do not take spots away from nationals. Amadou Gallo Fall, NBA VP and BAL CEO, emphasizes that the league will not just be a feeding trough for the NBA, but will have a distinct life of its own. “It’s about inspiring the next generation,” Fall noted, “we’re going to build, and we’re going to play in world class arenas and there will be job provision … economies across the countries will be boosted, tourism will improve because as we play this around and we take six teams to each country, imagine everyone travelling from different countries to come and stay in African countries for a weekend.”
There is vast interest in professional basketball across Africa, as evidenced during the BAL qualifying tournament where 32 teams from 32 countries competed for a spot with most arenas sold out for these games. Apparent through its early popularity, it won’t be surprising if the BAL grows into a league similar to the NBA consisting of a draft, an All Star Game, and a developmental league. Mark Tatum, Deputy Commissioner of the NBA, noted that “this is the start of something that’s going to be huge, for Africa, for the countries of Africa, for the people of Africa, to demonstrate how sports can really drive economic growth and prosperity.” The potential is boundless for the BAL but most importantly, the NBA will provide the strong foundation, capital, and expertise needed for a league to flourish in Africa.
The absence of a strong sports industry coupled with the issues players experience because of this - including not being paid and not having written contracts - has led to the continent’s best athletes, such as Didier Drogba (Chelsea FC - Premier League) and Hakeem Olajuwon (Houston Rockets - NBA), leave in pursuit of playing for high-paying leagues elsewhere, most notably Europe’s Professional Football Leagues and the NBA … sometimes taking extremely dangerous paths to do so.
Apparent in the two graphs, the current sports industry provides little incentive for players to remain and play in the continent. While top talent will always leave to play in the highest paying leagues, mid- and lower-level talent are also leaving because of the inferior opportunities and playing conditions in leagues across Africa. The creation of viable leagues would provide African players the opportunity to compete in countries around the continent, which would allow players to support themselves financially, have a much greater socio-economic impact on the continent, and inspire the next generation of athletes.
Sport Infrastructure
The state of sport infrastructure, specifically in the form of arenas, stadiums, and training facilities, across Africa has seen the brunt effect of widespread corruption, lack of investment, and neglect from governments and governing bodies. Many stadiums and arenas are in terrible conditions with poor changing rooms, bumpy pitches or courts, poor drainage systems, concrete sitting, and no shade for fans. Unlike the model in North America and Europe where teams own their stadiums and arenas or lease them from the local government, in Africa governments own, maintain, and control the majority of stadiums and arenas. While it cannot be ignored that several governments have more pressing socio-economic issues to deal with than investing millions in sports infrastructure, the model should be revitalized in order to provide an opportunity for the industry to succeed. Unless governments decide to spend the necessary capital on stadiums and arenas, they should work with investors to create arenas and stadiums that provide the foundation needed for the sports industry to grow.
A few nations have started investing more and working with investors to build sports infrastructure, specifically Rwanda and Senegal. The Rwandan government has recognized sports’ positive socio-economic and cultural impact and invested heavily in building stadiums and arenas, most notably Kigali Arena. In preparation for the inaugural BAL season, the League was seeking an arena capable of hosting the finals and the Rwandan government recognized the impact a strong professional basketball league can have on its community and worked quickly to be a key figure in the inaugural BAL season. The state of the art 10,000 seat arena (which can expand to 15,000 if needed) was built in a record 6 months and provided thousands of jobs for local Rwandans during its construction. Not only was the arena one of the most expensive in Africa costing USD$104 million to build, the financing model can be used as a template for other African governments. Kigali arena was financed through a public-private partnership between the Rwandan government and SUMMA (a Turkish construction company), which saw the government commit USD$31 million, SUMMA pay USD$30 million, and the remaining USD$41 million acquired through a loan. The government worked with a foreign investor to provide the much-needed capital and expertise needed to build a state-of-the-art arena worthy of hosting high-calibre events, such as the BAL’s Finals Week. The positive effects of building the arena is already being recognized as the surrounding neighbourhood has been completely transformed and turned a once dilapidated area of cheap bars, restaurants, and garages into polished businesses. As Kigali Arena (seen below) continues to host more events, the positive socio-economic impact on the community will continue to be reaped as more jobs are created and increased capital circulates in the local economy.
The Senegalese government has also recognized the impact of a strong sports infrastructure and has supported the building of several stadiums and arenas. Senegal’s President Mack Sall stated “I hope to provide the country with the best infrastructure in the sports sector” and he has been working hard to fulfill this mission. In 2018, the 15,000-seat Dakar Arena was built in the Diamniadio neighbourhood and utilized a similar financing model to Kigali Arena. While the specific figures are not public, the Senegalese government worked in partnership with SUMMA to build a modern sports facility. The new arena hosts a wide array of sports and entertainment events, including basketball, volleyball, martial arts, handball, and concerts. Senegal also worked with SUMMA to build the US$258 million, 50,000-seat stadium in Diamniadio (seen below), which will have a football pitch, two training areas, and an athletes track, in preparation for the 2022 Youth Olympic Games. The project is providing thousands of locals with jobs and will provide more future job opportunities when the Youth Games and other sports and entertainment events are held. The 2022 Youth Games will be the first-ever Gamesheld in Africa and will show the immense momentum the sports industry is currently experiencing in Senegal. In granting Senegal the Youth Games, International Olympic Committee President Thomas Bach stated “It is time for Africa. Africa is the home of many successful and prominent Olympic athletes. And being a continent of youth, it is only proper to have it host the Olympics”.
Forecasting the Future
What lies ahead for sports in Africa and what should be done to create a viable sports industry that can drive economic growth and prosperity around the continent? It is challenging to determine whether a sustainable league must be present for an increased investment in sports infrastructure or vice-versa as both sides have compelling arguments: the creation of what will be a successful league – the BAL – led to improved infrastructure – Kigali Arena – but at the same time the adage of “if you build it, they will come” may be what is needed for global institutions – such as FIFA – to invest in creating viable leagues across Africa. There is no question that the BAL will be extremely successful … the NBA has invested too much time, capital, and effort for this endeavour to fail and there is an immense yearning for more professional sports across Africa. When the BAL is a proven success, it will provide a compelling template for other sports on how to grow across the continent. The success of the BAL may provide FIFA the motivation to create a similar league to the BAL (football is the most popular sport in Africa after all), which would further elevate the African sports industry. The notion for improved sports and leagues is already being recognized … Khaled Babbou (President of Rugby Africa) has urged World Rugby to focus on growing the game in Africa through increased investment, technology, and expertise. While it is essential to invest capital to support professional leagues in Africa, it is equally, if not more, important to provide local people and communities with the necessary tools and expertise to build the leagues from the ground up and run them as their own.
The process of elevating the sports industry in Africa will not be a quick or even an easy process and it will take considerable time before every African country reaps the benefits of a stronger sports industry, but the industry has already started moving in the right direction through the formation of the BAL and the hosting of the 2022 Youth Olympic Games. Sports will be a massive business in Africa and “it is time to be curious about Africa,” Masai Ujiri emphasizes, “we are not looking for charity anymore in Africa, we are not looking for aide, we are looking for investors. We are looking for people that will create the next generation … Africa is now.”