Rwanda Sets Its Sights on F1 Bid in New Sporting Initiative

The Rwandan government has announced its plans to bid for the chance to host a Formula One grand prix, aiming to harness the international sports industry to foster economic growth in the East African country.

In a statement released last week, President Paul Kagame stated, “Rwanda is eager to bring the thrill of racing back to Africa by organizing a Formula One grand prix.”

He remarked on the “positive advancements in our discussions thus far” and assured that the government is “approaching this opportunity with the seriousness and commitment it deserves.” If successful, the race would be held on a new circuit situated near Bugesera airport, just outside Kigali.

This initiative isn’t Rwanda’s first effort to leverage the global sports arena for improving its economic development and international reputation. In May 2018, the Rwanda Development Board entered a three-year collaboration with the English football club Arsenal, which showcased the “Visit Rwanda” logo on the club’s shirt sleeve to enhance international tourism. This agreement was extended for an extra four years in 2021, costing £40 million. Similar partnerships were also established with the French club Paris Saint-Germain in 2019 and with German giants Bayern Munich last year.

Rwanda has also significantly invested in basketball, partnering with the NBA and hosting a large segment of its Basketball Africa League, alongside spending hundreds of millions on building sports facilities and stadiums domestically.

The Rwandan government defends these investments, arguing that prominent football teams like Arsenal and PSG have millions of global followers, thus boosting Rwanda’s visibility as a destination for tourism and investment.

According to Visit Rwanda, “the Arsenal shirt receives 35 million views daily worldwide, and AFC ranks among the most viewed teams globally, allowing Visit Rwanda to enhance its visibility in football-loving countries and aiding its quest to become a more prosperous tourism and investment hub.” This reasoning likely extends to Rwanda’s Formula One aspirations as well, considering that the average viewership per grand prix was 70.3 million in 2021.

The government claims that these partnerships have contributed to the growth of Rwanda’s tourism sector, with over one million visitors arriving in 2022, generating almost $445 million in tourism revenues. However, critics contend that it is challenging to quantify the benefits derived from sports events or sponsorships, highlighting the substantial risks associated with investments in an emerging market economy with a relatively low GDP.

‘A risky strategy’

Simon Chadwick, a professor specializing in sports economics, tells African Business that “the Visit Rwanda sports sponsorships have mainly functioned as a communication tool to boost tourism numbers,” asserting that “these sponsorships do not represent a genuine sports strategy.”

“It’s probable that some tourists have been drawn to the country due to these agreements. Nevertheless, transitioning from being a tourism destination to a significant player in the global sports industry is a substantial leap, necessitating a more strategic approach from the Rwandan government in their sector involvement,” he remarks.

Chadwick cautions that investing in global sports as a catalyst for growth is a high-risk strategy that may lead to considerable debt if not managed effectively.

“Bidding for and hosting sporting events is both competitive and expensive, and there are numerous examples in history of nations and cities that have overextended themselves and faced severe financial challenges,” he warns.

“If Rwanda chooses to pursue the hosting of events, a strong sense of economic discipline must guide its decision-making process. Otherwise, hasty and costly decisions could leave nations and their citizens burdened with decades of debt that are challenging to repay.”

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