Sports for socio-economic value & sustainability

Despite a 2.9% estimated deceleration in global growth, January 2019 Global Economic Prospects report by the World Bank forecasts Nigeria’s GDP to grow to 2.2% in 2019 whilst that of Sub-Saharan Africa grows to 3.4%. A focus on the services sector- particularly, the growing sports industry can assist in attaining and surpassing the forecasted GDP growth in Nigeria if properly stimulated.

 

Nigeria accounts for nearly 20% of continental Gross Domestic Product (GDP) and about 75% of the West African economy. Despite this dominance, exports to the rest of Africa are estimated at 12.7%. In recent times, the growth of the services sector has overtaken that of oil and agriculture, accounting for about half of total GDP while oil and agriculture have been plunged to about 10% and 22% respectively.

 

Nigeria’s Sports Industry

The overall direction of the sports structure in Nigeria is provided by the sports ministry with two distinguishing features which are its central organisation and its engagement for specific socio-political objectives. This reality is in contrast with what obtains in developed nations where the government creates the enabling environment and the private sector drives the growth through strategic partnerships. The policy of the Federal Ministry of Youth and Sports Development is invariably determined by any government in power without any follow through on the actualisation of the socio-economic value of sports to the economy.

 

Today’s global sports industry’s estimated worth is between 480 to 620 billion dollars and Nigeria is not a major contributor or partaker. The industry encompasses live sports events, licensed products, sporting goods, infrastructure construction, salaries and wages etc. Live sports events, in particular, offer a compelling proposition to different industry participants from free-to-air broadcasters seeking viewers and advertising revenues and pay-tv broadcasters targeting loyal subscribers, to sponsors moving away from traditional media, event organisers, athletes and spectators.

 

Sports worldwide has become progressively capital intensive and capital rewarding; yet the government has almost single-handedly shouldered the responsibility for sports development in Nigeria, especially in the areas of provision of sporting facilities, programmes, personnel and participation in continental and global competitions. There is minimal private sector participation, due to the bureaucracy that exists in government and the lack of accountability for past sponsorships of sports development programmes.

 

 

Sports as a Catalyst for Socio-Economic Growth: The Case of the British Economy

The Nigerian Bureau of Statistics (NBS) places the unemployment rate at 23.1% representing 20.9 million people. 36.50% are between the ages 15-24 whilst 24.40% are between the ages 25-34, which clearly show that the youthful population are not being engaged as they ought to.

 

Comparably, the early ’80s and early ’90s were tough periods for the British economy and society, evidenced by a deep recession in 1981 as the government tried to control inflation. The recession particularly hit manufacturing causing unemployment to rise to over 3 million. Unemployment did not fall until the mid and late 1980s when the economy boomed during the years of rising wages, rising house prices and a stock market boom. However, this boom proved to be short-lived with inflation returning and eventually causing the recession of 1991/92.

 

The premier league was formed in 1992 in response to the decline of sports in the United Kingdom (UK) during the tough economic period. Football stadiums were neglected and English football clubs were banned from competing in Europe due to the disaster that occurred during the 1985 European Cup Tournament. At the end of the first Premier League season, in 1992/93, the aggregate attendance was 9.75 million and 69.6% available seats were sold. By the 2010/11 season, the aggregate attendance had increased to 13.4 million and an occupancy rate to 92.2%. A quarter of those who attended games were women with over one in ten from an ethnic minority background and 13% were children. This clearly showed the social acceptance and the holistic involvement by all gender groups.

 

According to the Ernst and Young’s Economic and Social Impact Report of the premier league 2016/2017, the league generated 3.3 billion pounds as domestic taxes in 2016/2017 which is a substantial contribution to the UK’s public finances. Based on current estimates of hiring and recruitment costs, this is equivalent to the annual salaries of over 86,000 police constables or the total fund needed to train more than 42,000 new National Health Scheme (NHS) nurses. In terms of GDP figures, the premier league contributed to the UK Gross Domestic Product (GDP) an estimated Gross Value Added (GVA) figure of £7.6 billion, with the majority (£7.2 billion) resulting from Clubs’ operations.

 

With regards to community engagement and employment, the activity of the league supported almost 100,000 full-time equivalent (FTE) jobs across the UK in 2016/17. This represented a 30% increase since 2013/14. The majority of these jobs were underpinned by the League’s substantial supply chains, which accounted for 87,000 jobs both through indirect (52,000) and induced (35,000) impacts. Of the total employment impact, 90,300 were supported by Clubs, with the remainder supported by the Premier League (8,800).

 

How can Nigeria effectively utilise sports?

In 2015, the British government developed a sports development framework titled “Sporting Future: A New Strategy for an Active Nation” which clearly spelt out the role of the government across all levels, the step by step process to achieving the set goals, the partnerships needed for sustainable development of the sector and the key performance indicators by which the impact of the framework would be measured. The 5 focus areas of impact were defined as follows;

  • Physical wellbeing;
  • Mental wellbeing;
  • Individual development;
  • Social community development and;
  • Economic development.

 

As with laudable plans by governments, funding is a major constraint given the demand for scarce resources by various sectors. In order to mitigate against this, the UK government diversified the funding for sports to include tax incentives for companies involved in sports development initiatives, commercial funding from sponsorship and media rights to major events and investing in lesser sports that can’t attract such sponsorship, deliberate investing in the grassroots where investments are minimal and participation is large and seeking alternative sources of income for investment in sports such as sports lotteries and corporate social responsibility of organisations. With sport and physical activity contributing £39bn to the UK’s GDP and with one million people employed in the sport and physical activity sectors, the government is deliberate about the support and policies as the impacts are seen in other major sectors such as health, education, construction, media and entertainment, Information and Communication Technology and manufacturing.

 

Nigeria can adopt these steps in developing sports across its states. The idea of using sports as a political tool majorly rather than focusing on the socio-economic benefit it brings to the economy of the nation is one that needs to change. The Lagos State government is an example of what having a deliberate and followed through plan in sports can be. With a Sports Trust Fund whose significant role is to interface between the private and public sectors in raising funds for sports, investments are made in grassroots initiatives and state-wide tournaments which impacts positively on the local economy. Sporting infrastructure is also being upgraded across the 5 administrative divisions to cater for the teeming youths that require sporting facilities to hone their skills. The impact of this plan is seen in the number of international, continental, regional and national sporting events hosted in Lagos and the direct benefits to the economy.

 

How can the Private Sector effectively participate?

Having strategic partnerships should be the focus of the private sector. The view that sports sponsorship should be confined to CSR initiatives alone limits the scope of private sector participation in sports. The 2030 agenda for sustainable development acknowledges sports as an important enabler of sustainable development, recognising the growing contribution of sports to the realisation of development and peace in its promotion of tolerance and respect and the contributions that it makes to the Sustainable Development Goals.

 

Private organisations can adopt sporting organisations, adopt grassroots communities and create a socio-economic ecosystem that is sustainable and adds value. Today, possibly more than any other time in human history, sports is seen as an avenue to sustainable incomes and livelihood and is undoubtedly the reason why most people venture into it thereby lifting millions of people out of poverty.

 

In conclusion, the sports value chain needs to be explored for greater benefits. Having a vibrant sports industry in Nigeria can help in the actualisation of the Sustainable Development Goals. The direct impacts of sports will promote good health and well-being (SDG 3), end poverty (SDG 1), provide decent work and economic growth (SDG 8) and create sustainable cities and communities (SDG 11). Furthermore, the economic value chain that consists of sporting intellectual properties, rights management, events management and content packaging should be infused into the short term, medium and long term goals of the government when drafting economic growth plans as sports has been demonstrated to be a social and economic growth catalyst.

 

References:

World Bank Group (2019); Global Economic Prospects: Darkening Skies: International Bank for Reconstruction and Development / a World Bank Group Flagship Report, January 2019

https://www.atkearney.com/communications-media-technology/article?/a/the-sports-market

https://www.pwc.com/ng/en/assets/pdf/nigeria-economic-outlook-2019.pdf

https://www.afdb.org/en/countries/west-africa/nigeria/nigeria-economic-outlook/

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/486622/Sporting_Future_ACCESSIBLE.pdf

 

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