multiplier effect

Massive potential for the Sports Economy in Kenya

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This article first appeared in my weekly column with the Business Daily on July 30, 2017

A few weeks ago, over 50,000 Kenyans attended the IAAF under 18 World Championship, the largest crowd in the event’s history. Kenyans were there to not only cheer on Kenyan athletes but also attend an international sports event in the spirit of global athletics. What the event made clear is that if a sports event is well organised, well publicised and in the right facility, Kenyans will cram themselves in to get a piece of the action.

The championship has raised broader questions on the Sports Economy in Kenya. Why isn’t sports a bigger revenue generator for the country and why aren’t local events as well attended as the Championship was in Kasarani?

https://i1.wp.com/www.athleticskenya.or.ke/wp-content/uploads/2014/12/WYC_MESSAGE111.jpg

(source: http://www.athleticskenya.or.ke/wp-content/uploads/2014/12/WYC_MESSAGE111.jpg)

The Sports Economy can be defined as all economic activities which require sport as an input, i.e. all goods and services which are related to a sport activity. These include sport clubs, public sport venues, sport event organisers, sports equipment sales etc. However, the multiplier effects of the sports economy are significant, positively informing activity in the sports education and training sector, media coverage and even the hospitality industry.

Data from other countries indicates how large this sector the economy can be; a 2012 report by the EU found that as of 2005, value added by the sports-related sector was up to 173.86 billion Euros and the direct effects of sport, combined with its multiplier effects, added up to 294.36bn Euros in the EU. In the UK, in 2010 the sports sector generated GBP 20.3 for the economy. In the USA as of 2013 the sports industry as a whole is said to generate about USD 14.3 billion in earnings a year.

Given that Kenya is a sports powerhouse, excelling in athletics and even rugby, why isn’t the sports sector a more important player in the country? There are several reasons behind this. As the Sports and Development Organisation (SDO) points out, research shows that investment into sport in developing countries is much less than in developed countries as sport development is usually not a top priority in the national budget or in the education system of most developing countries. As a result a vicious cycle emerges where underdevelopment of and under-investment in sport decreases the potential for athletes to build their talent and the ability of the sector to grow. SDO also highlights the ‘muscle drain’ issue where athletes from developing countries supply industrialised countries’ markets with talent.

Image result for iaaf athletics kenya 2017

(source: https://www.athletics-africa.com/s/wp-content/uploads/2015/09/davidrudisha-fergusonrotich-800mfinal2-beijing2015-800×600.jpg)

To be fair, in Kenya there have been effort to develop the sports sector through local marathons and the emergence of international training facilities for long distance runners. However, this is not enough, more effort needs to be made to not only monetise the sector but also generate a figure of the amount needed as investment into the sector to make it a more effective economic player. More efforts also needs to be done to study the sports economy ecosystem: What events are popular with Kenyans? How much are Kenyans willing to pay for a sports event? What sorts of facilities are required to attract Kenyans to sports events? In beginning to unpack these issues, Kenya stands to develop an entire segment of the economy that has thus far languished in neglect.

Anzetse Were is a development economist; anzetsew@gmail.com

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