2010 FIFA World Cup™ effects

In South Africa, the successful staging of the 2010 FIFA World Cup™ provided an insight into the gains that flow from a positive international image and a reputation for good order and efficient management.

Media coverage highlighted the country's huge attractions as a tourist destination while showcasing our modern infrastructure. Our sporting facilities were shown to be world class. This creates an opportunity to build both mainstream and sports tourism – service sectors with a proven ability to generate long-term jobs growth.

Tourism infrastructure was expanded ahead of the tournament. New hotels were built while existing hotels were expanded and upgraded. South Africa therefore faces a long-term challenge – filling world-class stadiums by continuing to attract big international events and filling good quality hotel rooms by attracting a continual stream of visitors.

Every obstruction to the free flow of visitors should be removed and red tape cut. We should encourage air charter traffic as well as more scheduled flights.

Good order, good humour

High-visibility policing kept crime in check and eased international concerns about personal security. South African police officers showed themselves to be efficient, well resourced and capable of doing a good PR job for the country by dealing with a substantial influx of foreign visitors in a helpful and engaging manner. Good order was accompanied by good humour.

In recent years, rising crime has created a national challenge. Yet over the period of the 2010 FIFA World Cup™, crime went down while national morale went up. Recent statistics indicate that these gains in the battle against crime have extended into the post-2010 FIFA World Cup™ period.

The South African Police Service has a thankless task. Police officers often receive poor pay, yet put their lives on the line to get the job done. They pulled out all the stops during the 2010 FIFA World Cup™. The men and women in blue did a marvellous job. These officers deserve credit for a job well done.

The Bidvest benefit

The principal 2010 FIFA World Cup™ benefit for Bidvest's South African businesses was motivational. Some of our operations benefited from contract gains, but every business benefited from the surge in national pride.

Staff members joined the national celebration and put on their Proudly Bidvest soccer shirts to do it.

Trading conditions remained challenging and our people were under considerable pressure. In this environment, the 2010 FIFA World Cup™ provided a further boost to the already strong team spirit.

Cash up, debt down

Businesses in all regions concentrated on the trading and housekeeping basics. Get the fundamentals right and the rest will usually follow.

At Group level, cash generation showed continued improvement, up from R6,8 billion to R8,0 billion. Net debt came down from R4,1 billion to R3,8 billion and is now at about 70% of its peak level, although some of these gains are due to improvements in the exchange rate. Working capital fell by R700 million, despite R1,7 billion in debt funding to buy the Nowaco and Farutex businesses. The transaction was effective from July 1 2009.

Nowaco acquisition

The Nowaco group acquisition for €250,0 million demonstrates the advantage of buying into people as opposed to buying solely on the basis of a balance sheet.

During on-the-ground discussions with managers in Czech Republic and Poland we found we were talking to Bidvest people. At that stage, they might not have thought of themselves in that light, but that's how they looked to us – pragmatic, self-reliant, hands-on and close to their customers.

These entrepreneurs have built Nowaco group from close to a zero base into the leading delivered wholesaler to the foodservice and independent retail markets in central and eastern Europe.

Since the deal was done, economic conditions have worsened, but local teams buckled down and still performed to pre-acquisition expectations; much as you would expect of Bidvest teams anywhere. After expensing R53,4 million in acquisition costs, Nowaco group contributed R4,1 billion to revenue and
R92,1 million to profit.

Jobs challenge

Growing unemployment is a concern in almost every economy in which Bidvest is active. However, with an unemployment rate of 25% the problem is particularly acute in South Africa.

The South African government recognises the urgency of the situation and recently acknowledged that it did not react quickly enough to the threat of recession. The economic slowdown then compounded the job-creation challenge. This frank acknowledgment is welcome, as is the pledge to redouble efforts to create jobs.

This is the greatest single challenge facing our government, but it would be a mistake to consider the challenge in isolation. One in four of the working population is without a job yet the country suffers from a longstanding skills shortage.

Jobs and schooling linked

Education and training are the keys to growth, while sustained economic growth is the only way to eradicate unemployment.

The way forward is to ensure that young people leave school with a good basic education and can be easily assimilated into the workforce. With a solid educational grounding they can absorb training and upskilling, thereby becoming productive members of their teams in a relatively short time.

As productive workers, they can drive further growth, opening up further opportunities for more young people.

Business has training responsibilities, but the primary responsibility for creating educated entrants to the workforce rests with government.

Education indaba

It is obviously in the interests of both parties – business and government – that educational standards improve. When interests coincide, partnerships can sometimes be helpful. Certainly, the idea of a public-private partnership to foster better educational outcomes should be explored.

A national indaba involving policy-makers and business leaders could usefully be called to examine the problem and consider solutions. Educators would then have a chance to question business people about their requirements.

In my view, the issue is not one of grades and symbols, but the quality of education and the qualities possessed by young people who have progressed through the educational system.

Do they have a high level of comprehension when a task is outlined to them? Can they read and write, add, subtract and carry out basic mathematical calculations? Are they confident young people who show initiative? How do they compare when measured against the educational "products" of other national education systems?

Have they the discipline to learn and carry on learning? Education is a journey, not a destination, and our young people need to commit to it.

Adopt a school

Business needs well-educated, confident and competent young people if it is to grow. What can business do to help drive the improvements most South Africans regard as urgent? Should businesses be encouraged to join in a national adopt-aschool programme? Targeted assistance by business for under-resourced schools could become the catalyst for better scholastic performance.

What about teaching standards? The quality of our teachers is crucial to a quality outcome. What needs to be done to support teachers and the teaching profession in general? Can business help?

An education indaba could examine these questions and many more.

Fulfilling national potential

If our goods and services are to be internationally competitive, our businesses and workers have to add value by being more efficient and productive. To become a winning nation, South Africa has to harness the undoubted talents of its resourceful population. The first, most crucial step is a good education for every child.

The world is changing. The BRIC nations – Brazil, Russia, India and China – are fast becoming the drivers of global growth. South Africa has the opportunity to join them, not only as a provider of natural resources, but as a source of world-class products – if we can educate and train a new generation to fulfil its potential.