How much it will cost South Africa to host the Olympics

South Africa has entered the race to host the 2036 Olympics, which could ring the country up anywhere from R218 billion to more than R526 billion.

Minister of Sports, Arts and Culture Gayton McKenzie has expressed interest in hosting the 2036 Summer Olympics and Paralympics.

McKenzie, South African Sports Confederation and Olympic Committee (Sascoc) President Barry Hendricks and the committee’s CEO, Nozipho Jafta – along with other stakeholders – met with the International Olympic Committee (IOC) in Lausanne, Switzerland, last year. 

“We are at the start of an exciting new process that could lead to South Africa hosting the 2036 Olympic Games,” McKenzie said.

While some have expressed excitement at the prospect, others are much more pessimistic, especially regarding how much the games would cost South Africa. 

According to the Oxford Olympics Study 2024, titled “Are Cost and Cost Overrun at the Games Coming Down?”, the estimated costs related to hosting the Olympics vary, but they have previously reached a staggering R526 billion.

However, that number does not include unexpected costs like upgrades to airport infrastructure or hotels, which would push it up even higher. 

Econometrix director Dr Azar Jammine told Newzroom Afrika that the event is definitely worth considering for the country.

He explained that South Africa and the rest of the world have had mixed experiences hosting big events like the Olympics.

While countries like France have had success in turning a profit for the recent Paris Olympics, “others have been deemed to be horrifically financially stressful for the countries hosting them”.

These include the 2016 Brazil Olympics and the 1976 Montreal Olympic Games, which famously went awry for how much money they lost. 

The 1976 Olympics in Montreal left the city and its province, Quebec, with about a billion Canadian dollars of debt, which Quebec only finished repaying in 2006.

Jammine explained that the difference between Paris and Montreal’s outcomes comes down to how they spent the money on their respective events.

Where Montreal vastly overspent compared to how much revenue it was expected to make, Paris had a very efficient fiscal approach.

The city held most of its events in a tight radius, building on existing infrastructure and relying on temporary structures. 

Jammine noted that given that the 2036 Olympics are still 11 years away, it is difficult to predict whether South Africa will be able to handle the event.

“It’s a tremendously long way ahead to actually forecast what South Africa’s economic and financial position will be like by 2036.”

When South Africa was granted the right to hold the 2010 FIFA World Cup in 2004, the situation was much more favourable for the country.

Since the event was six years away, it was easier to predict where the country would be at the time of the World Cup.

In addition, South Africa had a much more favourable economic outlook in 2004, with a GDP growth rate of over 4%, compared to 0.6% growth in 2023. 

Since the Olympics are much further away, the rest of the world would be taking a much greater risk in giving South Africa the hosting rights.

The magnitude of the Olympics is also much bigger than the World Cup, increasing the risk even more. 

If South Africa were to host the Olympics in 2036, there is an array of issues that would need to be sorted out first, Jammine explained.

As one of the biggest tourist cities in the world, Paris has lots of experience in managing large amounts of people effectively.

Paris also has the advantage of incredibly sophisticated public transportation infrastructure, while South Africa is still lagging behind in that regard.

While the prospect of hosting the Olympics may help incentivise improving public transportation, it is questionable whether the country even has the capacity to do so.

According to Jammine, South Africa’s public transport infrastructure is “terribly poor” and people remain “incredibly dependent” on Ubers, taxis and personal transport rather than on public transport.

A decision would also need to be made on where to hold the games in South Africa because if they aren’t concentrated in one area, people would need to travel thousands of kilometres between them.

While Cape Town may seem like the natural frontrunner and has even been considered for previous Olympic games, the city faces a number of obstacles.

Even during the regular summer season, Cape Town can become highly congested with plenty of traffic, making it difficult to imagine that it would be able to handle the large increases in volume that the Olympics would bring.

Since the city is DA-run, there is also the possibility that it would face political opposition to being the host of the games. 

However, the major hurdle to South Africa hosting the 2036 Olympics remains how expensive the endeavour would be.

According to Jammine, while the government clearly can’t afford it, “if private sector companies were to come to the party and feel excited about the potential profit opportunities, the money would be available”. 

However, given the current state of South Africa’s economy, it seems unlikely that this would generate the needed numbers.

Investment in South Africa is still lagging behind, and even after the formation of the Government of National Unity and improved consumer confidence and business sentiment, there has not been a huge explosion in new investment. 

“You really need to have a very exciting investment environment to begin with in order for businesses to feel that they can come to the party through sponsorships and the like that would actually add up to the numbers that are required,” he said.