Rabat – The excitement surrounding Morocco’s co-hosting of the 2030 FIFA World Cup alongside Spain and Portugal has been palpable among football enthusiasts.
However, beyond the world-class football matches and roaring crowds, a recent study conducted by Sogécapital Gestion, a subsidiary of Societe Generale Morocco group, sheds light on the financial dimensions and potential economic windfalls of this grand event.
In a comprehensive analysis, Sogécapital Gestion examined the estimated costs and economic ramifications of hosting the world’s most prestigious sporting spectacle. The study’s findings project that Morocco’s contribution to the 2030 World Cup will require a substantial budget of approximately 52 billion dirhams ($5 Billion)
International Visibility and Economic Impact
The authors of the study assert that hosting a World Cup offers multifaceted advantages for the host country, beginning with unparalleled international visibility. The event promises to thrust Morocco into the global limelight, with extensive media coverage and a significant boost to tourism.
Furthermore, the World Cup’s impact is poised to stimulate the local economy across various sectors. The necessity of substantial investments in infrastructure, stadiums, hotels, and more will generate a surge in job opportunities, catalyzing economic growth.
A Catalyst for Social Cohesion
Beyond economic benefits, the World Cup can serve as a catalyst for reinforcing social cohesion and national unity.
It provides an opportunity for cultures to converge around the Mediterranean and leaves a lasting legacy with new sports facilities and infrastructure investments benefiting local athletes and the general population.
A $5 Billion Price Tag
To estimate the budget required for Morocco’s role in hosting the 2030 World Cup, Sogécapital formulated hypotheses including modernization of construction standards, inflation effects, and increased budget expectations following the 2022 World Cup.
The study predicts a total cost ranging from $15 billion to $20 billion for the Morocco-Spain-Portugal trio. Morocco’s share of this budget is expected to be approximately $5 billion, equivalent to around 52 billion dirhams.
This budget allocation encompasses 17 billion dirhams ($1.6 billion) for stadium construction and renovation, 8 billion dirhams for training centers, 17 billion dirhams for transportation and infrastructure, and 10 billion dirhams for general organizational expenses.
Financing and Macroeconomic Impacts
The study suggests that the state budget for 2024-2030 will fully cover the costs of stadium and training center construction, amounting to 25 billion dirhams ($2.4 billion).
Infrastructure and transport network projects will be financed by public enterprises through bank loans and private debt market sources (up to 17 billion dirhams), with additional support from external concessional loans and grants/aid (10 billion dirhams).
While financing is expected to occur without upward pressure on interest rates, the current account is predicted to widen due to increased imports of finished and semi-finished products, amounting to approximately 25 billion dirhams or 1.5% of GDP. Simultaneously, the banking sector is set to benefit from increased financing for construction and infrastructure projects.
Winners in Construction, Tourism, Banking, and Telecoms
Amid plans of large-scale projects such as stadiums and infrastructure, the construction industry is naturally expected to be a primary beneficiary of Morocco’s co-hosting of the most prestigious football tournament.
Thanks to the influx of tourists during and after the World Cup, Morocco’s tourism sector is also poised for growth in the short and medium term. The study suggests a need for over 100,000 additional beds in host cities to meet the influx of World Cup tourists, with tourism revenues potentially reaching up to 120 billion dirhams ($11.6 billion) by 2030.
Banks also stand to gain from increased financing for infrastructure projects. Meanwhile, the telecoms sector is expected to experience higher voice and data traffic, improved penetration rates, and investments to enhance network infrastructure, including the accelerated implementation of 5G technology.
Ultimately, Morocco’s hosting of the 2030 World Cup may come with a hefty price tag, but the potential economic benefits across various sectors promise a lucrative return on investment and an enduring legacy for the nation.
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