As the war against the spread of the coronavirus rages, the world economy is taking a massive hit.
In one of its recent forecasts, the International Monetary Fund (IMF) said the world should ‘anticipate the worst economic downturn since the Great Depression.’
While there is tremendous uncertainty around the forecast, the IMF says expectation is for global growth to fall to -3 percent this year. The IMF projects ‘partial recovery’ in 2021, ‘with growth expected at 5.8 per cent.’For Botswana, it predicts that ‘widespread and prolonged disruptions from the coronavirus could lower growth and mining revenue through slower tourism activity and demand for diamonds.’ “Higher mining production could provide some upside, but this could be offset by climate shocks, which would also weigh on agricultural output and tourism,” the IMF projects. According to the IMF, this is just a ‘baseline scenario.’ Depending on many variable factors, including the depth and duration of the pandemic, things can get even grimmer. The Bank of Botswana (BoB) in a press release dated 1st April expressed the same views on the country’s economic outlook. According to BoB, ‘the prognosis by forecasters suggests, in the short-term, a big negative impact in the first two quarters of 2020, with expectations of recovery of economic activity in the latter part of the year and into 2021. This is assuming that the spread of Covid-19 is contained and vaccines are developed. BoB went on to project that as Botswana is an open economy which is integrated with regional and global economies, Botswana will be affected through several channels, among others, probable local infections. The other channels, according to the BoB include travel and social gathering restrictions affecting tourism and hospitality sectors, ‘as well as conferencing, sports and entertainment activities.’ For Botswana sports, which is struggling for sponsors, what does the current situation mean? What are the challenges and opportunities, if any?
Former Botswana Premier League (BPL) Board Member Solomon Ramochotlhwane believes local sports will be hard hit.
“Sport economics predict the repercussions or Post Covid 19 economic recession aftershocks. It therefore mean that the sport will be immensely affected,” he opines.
Ramochotlhane points out that as companies take the, they will seek to prioritise where they spend their monies and sports will not be a priority.
“Companies as stakeholders, being the partners or investors may be forced to streamline their sponsorships or terminate,” he says.
AS for the supporters, who he defines as the number one stakeholders in terms of revenue generation through the gate takings, Ramochotlhwane says will take a little more time ‘to cushion their disposable income before we see them again at the grounds.’
“These two will have an impact on the other stakeholders, being players and teams. They will go through a very lean period of lack of financial resources and this will drive sports to amateur stage thus defeating the quest to professionalism,” he opines.
While the challenges are big, Ramochotlhwane however believes the current situation gives sport an opportunity to reflect and strategise.
“It is high time the Ministry of Sport sets up a Post COVID 19 Taskforce to strategise on how sporting codes will deal with the aftermath of the expected recession on sports,” he concludes.
For his part, Botswana National Olympic Committee (BNOC) Vice President Tshepo Sitale also concurs that ‘sport is one sector that is going to be hard hit.’
“Just using the 2008 recession as an example, sport took a knock and even after the recession it took a few years for sport to pick sponsors again,” Sitale says. “This means even after the recession, sports will suffer longer even after economic upturn.”
“During the last 2008 recession, ‘the United States Olympic Committee laid off workers to cut millions from its budget. The PGA Tour (Golf) lost 3 title sponsors but no events. Even Honda dropped its Formula 1 sponsorship,” he adds.
“In the case of Botswana we are yet to see companies increasing funds they give to Sport, and remember some do it as just Corporate Social responsibility. So companies will not have surplus to spend in non-core business operations, more so that in Botswana we do not have CSR Policy or Act forcing them to spend in Sport, Arts and so forth,” the BNOC VP observes.
Sitale says that with the possible withdrawal of sponsorships, professional sport people will feel the effects.
“We will have few races or competition which then stall sport growth. We also have amateur players and some partly make a living from sport. So the impact goes a long way,” he observes.
“At the highest levels, organizations like the International Olympics Committee (IOC) and FIFA operates with financial cushions, i.e multiyear contracts with sponsors, television networks and luxury box renters,” he says.
‘Therefore, we are likely to have few grants and support by international federations. This means us, as the BNOC will feel the effects. This will extend to BFA and all other Federations who gets grants from their mother bodies, your Botswana Athletics Association (BAA), Botswana Boxing Asociation (BoBA) and others,” he adds.
The BNOC vice president however says the current crisis will also bring new opportunities for sports to rebrand and align itself to lure new
“We as sports have to demonstrate that we are not just social responsibility but we can also contribute, for example, reduce health bill,” Sitale says.
“Sport curb non-communicable diseases, so putting money in sport means we reduce money spent by insurance and medical bills. Therefore, we should have insurance companies sponsoring sport for their benefit and the Government also realizing that giving more money to sport actually reduces the health bill,” he says.
for her part, Botswana Basketball Association (BBA) president Boineelo Hardy says while the economy looks set to enter into a recession, new opportunities will arise for sports.
“This period means a time for renewal and a change of landscape in terms of how sport has been running and how sport has been done,” Hardy opines.
“Right now athletes are hungry to play. So, I believe there will be a lot more passion because to have something taken away from you really gives it a lot of meaning and you value it more when you get it back again.”
“I am quite positive and upbeat that sponsors will come on board and do as much as possible to be seen or to be visible. Sport is one tool we can use for social solidarity as we have seen in most countries since this COVID 19 crisis,” Hardy says.
The BBA president goes on to add that ‘coming out of the crisis, sport will be a vehicle used to lift people’s moods and get people, and especially young people and children active again.’
“A lot of sponsors will want to be seen to be part of that kind of activity and to be seen to be active in that way,” she adds. “I really believe sponsors will want to be seen to be part of some kind of movement and some kind of social solidarity post this crisis.”
Hardy says local sport should use this time positively for change to do things differently and ‘do them better.’
“Even though we will be getting into an economic recession, I am not scared. I really believe it will be a new dawn and a better one for sport across the world,” she concludes.
Meanwhile, BFA Chief Executive Officer (CEO) Mfolo Mfolo says signs are already there that ‘we will go into an economic depression.’
“Companies which are major contributors to the sports industry in terms of sponsorships will likely not escape the depression,” Mfolo opines.
The BFA CEO says as such, companies are likely to prioritise where they get a better Return on Investment and sport will feel the pinch.
Mfolo is however optimistic that post COVID 19, sport and football in particular due to the large following it commands, ‘will be a perfect vehicle for investment.’