South Africa’s growing role as a host of high-profile global events, from international summits to major sporting showcases, is often presented as an economic win. The narrative is familiar: global visibility, increased tourism and billions of rands in economic activity.
But beneath the headline figures lies a more uncomfortable fiscal question: who ultimately pays and who ultimately benefits? While hosting generates visible commercial activity across hospitality, transport, security and event services, most of these gains accrue to private firms. The state, by contrast, shoulders substantial upfront costs often justified as “investment”, yet recovers only a fraction through profit-based taxation.
In a country facing deep service delivery backlogs and binding fiscal constraints, this imbalance deserves closer scrutiny. In some cases, reported economic activity associated with hosting has exceeded direct hosting costs. Provincial estimates linked to recent international summits, reported in the media, suggest for example economic activity running into the billions of rands, compared with hundreds of millions in public expenditure.
However, these headline figures obscure a critical reality: economic activity is not the same as fiscal return. Much of this spending accrues to private firms, while the state recovers only a small portion through profit-based taxation. For low-income households the gains are even more limited, raising the risk that hosting may widen inequality even when aggregate figures appear positive.
A serious hosting strategy should include mandatory private sector co-financing, with major beneficiary sectors contributing a big share of at least half of hosting costs.
Supporters of hosting often argue these events “pay for themselves” through economic activity. Hotels are full, flights are booked, conference centres are busy and restaurants thrive. But businesses pay tax on profits, not turnover. If profits are offset by costs, retained as reserves or shifted across balance sheets, the state captures only a fraction of the value created, if any at all.
The result is a familiar pattern: public funds socialise the costs while private firms privatise the gains. The hospitality, transport and event-management sectors benefit immediately and directly. The state, meanwhile, is left with limited fiscal returns and growing pressure on already stretched budgets. For economically disadvantaged citizens the benefits are largely indirect and temporary short-term jobs, casual labour and minor subcontracting, with little evidence of lasting income gains once the event ends.
This does not mean South Africa should stop hosting global events. Strategic hosting can strengthen diplomatic ties, improve investor perceptions and support key sectors such as tourism and conferencing. But hosting without a deliberate fiscal and developmental strategy risks becoming a regressive policy choice that deepens inequality rather than reduces it.
Temporary revenue-based levies on event-related turnover, rather than profit, could ensure the state captures real fiscal value.
If hosting is genuinely in the national interest, the private entities that benefit most must share the cost more equitably. A serious hosting strategy should include mandatory private sector co-financing, with major beneficiary sectors contributing a big share of at least half of hosting costs.
Temporary revenue-based levies on event-related turnover, rather than profit, could ensure the state captures real fiscal value. Crucially, a portion of hosting-related revenue should be ring-fenced for visible post-event investments in service delivery, township economies and youth employment.
Prestige alone does not deliver development. Global visibility does not automatically translate into improved living conditions for the majority. Without mechanisms to capture value and redistribute benefits, hosting risks becoming an expensive performance impressive to the world but disconnected from the daily realities of South Africans.
The real test of successful hosting is not how well we impress global guests, but whether the benefits are felt long after the delegates leave in communities that continue waiting for reliable water, functioning clinics and dignified work. Until hosting strengthens the state’s capacity to deliver these basics, its economic value will remain deeply contested.
• Qwelani is a research assistant in the office of the presidency, working on economics and public policy research.
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