The economic benefits of Mining Indaba 2022

The 2022 Mining Indaba greatly benefited the hospitality industry just as the Covid-19 lock down was being eased, the company has said in a report.

Hotels and restaurants were the largest beneficiary, followed by shops, markets, and souvenir sellers. Service providers like finance, insurance, advertising and travel agencies also benefited, as did local travel through car hire, Ubers, metered taxis and tour buses.

Economic benefits are reported from two perspectives. First, is benefit distribution. The event contributed R156m to the South African economy. The contribution to Cape Town and the Western Cape, being subsets, was R105m and R127m respectively. Second, is the source of the benefits. The most important were delegates at R54m for Cape Town, (51% of total). This was followed by the Hyve Group, the event manager with R44m (41%) and exhibitors R7m (7%).

The event created 83 direct full-time equivalent jobs in Cape Town. There were also 141 total Cape Town jobs, through the multiplier effects, 182 provincially and 214 nationally. National taxes increased by R19m of which R14m was from international sources.

Household incomes increased by R60m and net foreign exchange by R56m. The overall conclusion is that the Indaba was a prestigious event which raised Cape Town’s profile and made a substantial economic contribution. The event grew the economy, created jobs, generated taxes and foreign exchange. This year it threw a lifeline to the Cape Town hospitality industry. The economic contribution was smaller than 2020 following the understandable caution of the organiser and exhibitors.

The Indaba generated R19m for the national fiscus of which R14m was from international sources. Taxes from event management and delegates were largely the same and made up 93% of all taxes. The event attracted R90m in forex and used R33m (on specialised equipment, for example). This means that there was a net R56m forex inflow. In this instance event management accounted for 71% and delegates brought in a further 25%. Mining Indaba was the first major event to take place in Cape Town with record numbers attending globally including over 6,500 delegates, 3 Heads of State, 1 Prime Minister and 67 Ministers and Ambassadors contributing R177m to the GDP.

The Indaba was a hugely positive economic contribution from the event to South African business tourism. First, from setting up and running the convention and exhibition. This includes spending by convention and exhibition organisers, exhibitors at the event, delegates attending the conventions and visitors attending the exhibitions. Second, from delegate spending on accommodation, travel, sightseeing, meals, souvenirs, etc.

This was estimated using StratEcon databases and the most recent South African tourism data. It was also calibrated to current industry accommodation rates, the variations of which are not fully captured in the annual tourism surveys.

Third, anecdotal evidence suggests that many delegates from other countries on the continent purchase consumer durables. Fourth, some international delegates return with their family as tourists and some become regular visitors. It would be premature to quantify this impact now, particularly after the Covid-19 travel restrictions, but future versions of this report will endeavour to do so.

Fifth, there can be business to business benefits. Business to business conventions and exhibitions are a key meeting place for agreement to be reached on a wide range of different types of potential business cooperation. These can be orders, cooperation agreements and foreign direct investment, to name a few. In turn the deals can be between business people within the Western Cape, between the Western Cape and other provinces and between South Africa and other countries.

Various events supporting both the conference and the expo are specifically designed to promote networking experiences. Six, is potential SMME business development. Small business development is a key component of any poverty alleviation strategy. SMMEs offer a way out of poverty through economic empowerment that is far more efficient than reliance on hand-outs. Seventh is the promotion of sustainability in the industry.

The overall conclusion is that the Indaba was a prestigious event which raised Cape Town’s profile and made a substantial economic contribution. The event grew the economy, created jobs, generated taxes and foreign exchange. This year it threw a lifeline to the Cape Town hospitality industry. The overall economic contribution was smaller than 2020 following the understandable caution of the organiser and exhibitors. Delegate expenditure, however, was higher, despite some hotel rates not having fully adjusted back to pre-covid levels, and reflects that this version of the event attracted more people to Cape Town than before.

The report was commissioned for the 2022 Mining Indaba to understand the economic impact of the event on the local communities.