Page 126 - Risk Report 2024

1. Functional State 2. Politics

Challenges around an ineffective Government system, Inefficiencies in national policies related to sports governance,
structures and frameworks, poor service delivery, and a lack infrastructure development and funding allocation could
of transparent practices significantly impact the sector. Fiscal directly impact resource availability and the trajectory of the
misappropriation and malfeasance in sports entities result in a sector. Changes in Government structures may result in altering
decline in public confidence and ultimately hamper the sector’s decision-making processes and uncertainty in the allocation of
evolution. Service delivery deficiencies, typified by inadequate resources, which could impact long-term planning and stability
infrastructure and security measures, hamper much-needed of the sector. This could further impact SA’s involvement in
investments, impacting the hosting of sporting events. These international competitions. Inadequate funding and poor
deter the expansion of competitive viability and underscore the infrastructure can compromise the country's ability to train
need for overarching systemic reforms and strategic investments elite athletes and host international events, diminishing
for sustainable growth. Local governments inability to maintain its competitive edge on the global stage. Geopolitics and
the sporting facilities that they own dramatically affects sports international relations would also affect foreign investments
on community level and may impact stadiums hosting national and collaboration opportunities. Such factors institute several
and international events. complexities and uncertainties, which require adaptive
strategies and robust risk management practices in the sector.

3. Economy 4. Social Security
Economic decline impacts the sector through tapering of sports As a result of social security issues like crime and violence,
program funding, reduced consumer spending on sports-related people are often discouraged from attending sports events or
events and activities, and the withdrawal of sponsorships. The participating in sports activities. This affects spectatorship and
weak Rand challenges the retention of top SA athletes and impacts grassroots development. Moreover, low quality of life,
hosting of international events that have a Rand-based income. caused by inadequate healthcare and education, especially in
SA also has a crucial role in attracting international events marginalised communities, causes restricted access to sports
and investments into Africa. Economic turmoil could result in facilities and opportunities. High unemployment and inequality
declining international interest in hosting events in SA. This rates often exacerbate disparities in access to resources and
means that the revenue streams and opportunities for growth sports participation, impacting potential fan base growth
in the sector are limited. An economic downturn could also and talent development. Such interrelated socioeconomic
negatively affect grassroots sports development, as funding challenges pose significant risks to the inclusion, growth,
for community and youth programs is typically the first to be and sustainability of the sector. High unemployment results
reduced. This hinders the country's long-term growth and talent in many people not having access to participation in sports,
pipelines in sport. As a result, revenue streams and growth especially sporting codes that need significant investment by
opportunities in the sector are significantly restricted, affecting the individual.
entities from local clubs to national sports federations.

5. Rule of Law 6. Water
Fraud and corruption pose significant risks, hamper investments A water crisis poses a significant risk to the sports industry in
and tarnish public trust. Fraud in Government and Industry terms of venue operations and event planning. The maintenance
negatively impacts sports development due to decreased of sports facilities, including irrigation systems for playing
funding programs. Illicit activities, such as illegal betting, fields, could be significantly impacted by water scarcity, leading
doping, and match-fixing, further impact the credibility of the to deteriorating conditions. Such conditions could become
sport and the reputation of the industry. Vandalism, violence, significant safety hazards for athletes. The limitation of water
and crime further impose safety challenges for sports facilities, restrictions will also compromise hygiene and sanitation during
spectators, and athletes. Such general crimes negatively events, putting the health and well-being of participants and
influence sports participation and event attendance. Robust spectators in great danger. The economic ramifications of
governance frameworks, regulatory oversight and increased water shortages will further create unwanted and unexpected
collaborative efforts between city role players, law enforcement, costs related to maintaining sports fields and increased water-
and sports organisations are required to safeguard the integrity intensive sports such as swimming pools. Organisations in
and security of the sector. Top SA athletes may relocate abroad the sector need to formulate proactive water management
due to safety concerns. Sports tourism is negatively affected strategies to mitigate risks posed by the water crisis. Failure to
by the perception that SA is not safe to visit. Despite a weak develop conservation measures and alternative water sources
SA currency, offering affordable training in SA for international would impact the sustainability and functionality of the sector.
teams is influenced by the perception that the country is unsafe.
If the sporting code is seen as an extension of Government
and the Government is viewed as not adhering to corporate
governance principles, sponsors and investors may not invest
in sport.