Thursday Thoughts: The Potential of Sports For Africa – Getting it right

Another Thursday…another day to take a look at the business of sports and what Africa can do to leverage the potential of sports to drive social and economic development across the continent. Today, I’d like to provide some perspectives on what a few other experienced people have been saying about Africa’s potentials as far as sports is concerned, where those thoughts align with ours and provide the reasons for the agenda we developed for the upcoming Sports Africa Investment Summit in November.

Last week, Forbes Africa published an article Africa’s Sporting Boom: Spotlight On The Continent’s Potential. If you have not read it, I recommend that you make a quick dash to https://www.forbesafrica.com/sport/2024/09/26/africas-sporting-boom-spotlight-on-the-continents-potential/ . You won’t regret it. The views expressed by the four contributors capture a lot of the thinking behind the need for a sports specific platform and meeting point to chart a sustainable, scalable pathway for ensuring that the potentials of sports for development across Africa actually live u to thee expectations industry practitioners are projecting that they can deliver. My thoughts today will centre on highlights of the article and a response from another friend and colleague in the industry, who while been optimistic about Africa’s potentials, sounds a note of caution in the strategies and initiatives to convert this potential into actual deliverables that really benefit Africa. So here goes.

According to Forbes Africa, “Africa is set for a sporting boom in the next decade that can be a significant driver of economic growth and social change, with many involved in sports from outside the continent starting to realize it as fertile ground for opportunities. With a young and increasingly connected population, Africa is currently underutilized in the global sports market according to several experts, but that may be about to change. The continent achieved an annual growth in the sports business of 2.8% in the last three-five years, but this is expected to accelerate to 8% in the next three to five, with only the Middle East (13.5%) and North America (9.5%) having better prospects, according to PricewaterhouseC- oopers’ most recent?Global Sports Survey.”

The Thursday Thoughts I have expressed over the past three articles align with the projections Forbes Africa stated in their article, and clearly, those in the sports industry are seeing signs that portend growth and development in Africa through sports. The article goes further to posit the thoughts of four critical practitioners in the global sports space, two of whom I have interacted with, sharing opinions on what Africa needs to do, how to do it, when...and where. The consensus was that yesterday would have been better to get going, but today is also a good time to start.

In the words of Ricardo Bernard, a partner at American law firm Aker- man LLP, who has advised on numerous deals in Africa’s sports industry, while talking to Forbes Africa “There has been a boom of sports? as an asset class in Africa and I think- that is?going?to?continue across?multiple?sports?and across?multiple verticals, whether that’s rugby in South Africa and Kenya, football in West Africa or even motorsports. But also, for real estate investors, there’s going to be an opportunity to provide the assets to allow those teams and sports to flourish. A lot of that money is now searching for assets in Africa, and this has been helped tremendously by the NBA starting its Basketball Africa League. What I’ve seen in the last five years is that there’s been an emphasis on professionalizing the teams that are already in existence, in the sense that this team exists, but what’s the business model for growth? What’s the business model for developing players? What’s the business model for commercializing what you have? There are sports assets that are undervalued and underdeveloped. So, the outsized returns that people are seeking become a bit more real, where they can see that if they invest a little bit in player development and infrastructure development, they can start really moving forward the asset that they are purchasing. There is also the success of the African athlete that has shone a light on sports in Africa a lot more than perhaps it did 10 years ago. The commercial case is clear in most instances, but what isn’t clear is the regulatory issues that may surround privatizing some of those sports assets.”

The issues and questions Bernard raises were some of the issues considered when developing the agenda for the Sports Africa Investment Summit and I recommend taking a look at them once again at www.sportnigeria.ng/SAIS . In the same vein and according to the Forbes Africa article, Tony Simpson, Sports and Entertainment Lead at management consulting firm Oliver Wyman and Paul Calvey, who leads the company’s South African office, recently authored a report that suggests Africans will invest more of their own money in sports in the coming years. In their words “Africa is also one of the world’s fastest-growing regions in terms of economics and urbanization. Sports spending is linked to macroeconomic development stages, and so we anticipate that the amount of disposable income spent on sports will accelerate, resulting in sports spending growing faster than incomes. There is a lot of room for growth too. Our data estimates that the current sports market in Africa is worth more than $12 billion but could reach over $20 billion by 2035.”

I have had the distinct pleasure of engaging with Tony Simpson and he is quite bullish about Africa’s sports potentials, identifying the primary markets with the greatest potential and the next set of countries capable of scaling up to become big markets in the future.

Another person with whom I have engaged severally and who also has a bullish perspective on Africa’s sports trajectory to the extent of investing his own funds and attracting investment through his non-profit Giants of Africa Foundation is Masai Ujiri, a former NBA champion and current president of the Toronto Raptors basketball team. In his own words, “Sports is the next big thing in Africa. “We should be supporting teams in Africa, that should be our vision.” Masai believes and champions utilising sports as a vehicle for creating jobs and empowering young people on the continent, a sentiment I have shared here over and over again as a possible deliverable from structuring sports as an industry through the development of its entire value chain, with infrastructure at the heart of that strategy. ?

While recognising the thoughts and views expressed in the Forbes Africa article, and the potentials of sports to drive development for the Africa we want in 2063, it is important that we also imbibe the lessons of the past with regards to how Africa has managed her resources from other sectors that also showed potential to lift the continent up as far as socio-economic development is concerned. ?Sierra Leonean-American business man, sports industry expert, and Founder/ CEO of African Sports Ventures Group, Leslie Koroma, Snr, responding to the Forbes Africa article, had this to say, “The most glaring concern for me is the risk of repeating past mistakes with Africa’s sports sector, especially when considering the continent’s immense potential and promise. We’ve seen how Africa’s mineral wealth was mishandled in the mining sector, where vast amounts of resources were extracted and exported with minimal benefit to the local populations. The wealth generated largely bypassed the people, leaving us with little to show in terms of meaningful economic development or wealth transfer. Today, many of these resource-rich countries are left grappling with poverty and underdevelopment, while foreign entities have reaped most of the benefits.”

Continuing further, Leslie also said, “It’s crucial that we don’t allow the same narrative to unfold in the sports sector. Africa has become a hotbed of athletic talent, with many young athletes being scouted and exported to international markets. Yet, if proper structures and policies aren’t put in place, we risk a situation where the wealth created from sports similarly flows out of the continent, leaving local communities with little to no sustainable benefits. By ensuring that the sports industry is developed in a way that retains value locally—through investment in infrastructure, talent development, and fair compensation—we can avoid the pitfalls of the mining sector and truly harness the sector’s potential for the benefit of future generations.”

Leslie is someone I have interacted with regularly for a while, and he has a lot of experience in navigating the administrative and governance structures across the continent. He’s also bullish on the potentials of sports but preaches caution…and rightly so.

I dare say, with all these views on the potentials of sports to drive development in Africa, it’s a no brainer that a platform like the Sports Africa Investment Summit had to come up at some point. Africa needs a meeting point to gather these opinions, views, initiatives and projects and structure a strategy that ensures the potentials of sports for the continent can deliver the expectations the people have for the sector in a scalable and sustainable manner.

The Sports Africa Investment Summit is that meeting point…the agenda has been structured to address the projections of these four men among many others ?who operate in this space, and who have in one way or the other contributed to the summit agenda through their thoughts and actions.

If you have not secured your seat at #SAIS to join in discussing the agenda, please visit www.sportnigeria.ng/SAIS today and register to ensure you are a part of getting Africa’s sports industry right.?

Have a great weekend….and I’ll see you next Thursday!?