By Godwin Semunyu

Soccer goes down to the roots of Tanzania’s history. Through the soccer fields in Jangwani and Kariakoo, the late Mwalimu Nyerere and the TANU comrades converged with the locals during the freedom fighting days.

In Tanzania, whether you are a sports fan or not, you are somehow expected to support either Yanga or Simba. A friend once joked that we are first Tanzanians, then we mention our tribes, followed by our support for either of the two teams. I see no lie. Each club is estimated to enjoy a fan base of between 15-20 million followers, one of Africa’s biggest fan base.

However, with all their mighty brand prowess and lucrative fan bases, Simba and Yanga are still living in a world of financial dependency and relying heavily on funds from sponsors and donors in exchange for advertising values.

Leveraging on their brands’ equity, they are undoubtedly the “adverting heavens” to most local businessmen. Perhaps that is their blessings in disguise. As a result, the clubs have developed a tendency of over-reliance on sponsors and individual benefactors, with minimal revenue alternatives, a recipe for the rise of a solo voice, with financial muscles, to take the helm. It is not an entirely bad situation as it has worked perfectly elsewhere.

However, the downside to this situation is that it lacks a going concern and sustainability. When the dominant voice stumbles, so does the entire institution. Yanga fans learned the hard way when their previous benefactor stepped down abruptly. Within three months, they went from being the wealthiest club in East Africa to a club pleading for fans’ contributions to pay salaries.

A few months back, Simba’s main sponsor pressed the panic buttons when he tweeted a decision to quit the club, following a stint of bad results. Though the decision was reverted afterward, the fans already feared the worse.

Lack of sustainable revenue streams that act as shock absorbers leaves the clubs vulnerable in any mishaps. History has taught that over and over again.

The Government has instructed the two clubs to embark on the ownership model where shares are distributed into 51% to 49%. The ordinary fans own 59%, and a mega investor(s) holding the remaining 49%.

This opens up doors for the clubs to start trading shares at the Dar es Salaam Stock Exchange and generate instant capital to fund operations and growth. Apart from investing in squad and training facilities, it could also be ventured into income-generating tributaries like bonds or short-term fixed plans to guarantee working capital.

The move will also amplify the fan bases as many will jump at the opportunity to own a part of their beloved clubs. Furthermore, as a publicly listed company with mandatory transparency practices, the clubs will win many supporters’ trust to turn them into active members, hence garner annual membership fees.

Merchandise, TV rights, and Kit sponsorship are football clubs’ major cash-cows. With unbalanced books and a desperate need for funds, the clubs naturally lose ground negotiating tables with advertisers. Nevertheless, by becoming financially stable, the clubs will have the upper hand and detect terms.

For instance, the clubs could opt the modern way of kit sponsorship, where multiple advertisers are accommodated. Recently, the English club, Arsenal, signed with Rwanda a three years kit sponsorship deal worth USD39 million to have a “Visit Rwanda” Ad on the sleeves.

Mind you, Arsenal already had five years kit deal with Emirates Airline worth £200m (USD 280mmillion) for the front part of the jersey and around £300 million five years deal with Adidas for the company’s logo on the top left corner, of the same jersey.

It should be clearly stated that floating shares is one thing, but inspiring investors’ confidence is an entirely different ball game. To achieve that, the clubs will have to be appropriately structured and professionally managed.

The clubs also need to invest smartly in the playing squads to get favorable results; game results are an essential driver of the share prices.
In England, for instance, where most Premier League clubs are listed, studies have revealed that share prices reacts asymmetrically to game results. The negative effect being greater and quicker for losers than the positive impact for winners. This is because losing is a stronger predictor of future losing (and hence lower financial performance) and vice versa.

The optimal point is, if the two clubs, which commands the support of close to 30 million Tanzanians, are to make a significant leap forward, financial independence is of the essence. But since mobilizing capital the old way has proved to be a daunting task, floating shares is the only light at the end of the tunnel.

Send your comments to gsemunyu@epicpr.co.tz.

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By Godwin Semunyu.

Tanzania records an estimated 1.5 million tourists annually, accounting for 17 percent of the GDP, more than 2 million employments – and is the leading sector in foreign exchange earnings garnering over $2 billion annually (about Sh4.6 trillion). According to the World Travel & Tourism Council (WTTC).

International tourist arrivals to Africa grow at around 5% per annum with close to 1.4 billion visitors. Africa’s top tourism destinations are Morocco, with around 11 million arrivals, and South Africa, with around 10 million tourist arrivals, annually.

If you look closely at the figures, you will notice that destination Tanzania, blessed with unraveled natural attractions from the breathtaking coastline, National parks to Africa’s highest peak in Mount Kilimanjaro, ought to have more significant numbers than what is currently garnered.

It is time to repackage our tourists’ offerings by adding more value and create a new competitive edge. You will agree that Morocco has nothing astronomical to get ten times the tourists than what Tanzania is getting. There are some other areas that we can tap to add value to our tourists’ packages: Sports and medical tourism come to mind.

Sports tourism is a diamond in the rough, Today, sport is regarded as the world’s largest social phenomenon. And, tourism is on its way to becoming one of the world’s most significant industry—an optimal combination of the two, tourists from all over the world dance to your tunes.

Whether it is the World Cup, the Olympics, Marathons, Tennis, Golf, Formula One, NBA Finals, or a mere “El Classico” soccer match between Real Madrid verses Barcelona in Spain, more and more tourists are now interested in traveling to new destinations, just for sports activities. In 2018 the sports tourism industry was worth $1.41 trillion, and this figure is expected to increase to approximately $5.72 trillion by 2021. This is a whopping 41% growth in only four years.

This is a diamond in the rough. For Tanzania, it is about time to capitalize on this booming industry. One area that can yield instant success in staging world-class marathons. For the year 2021, Tanzania has register 97 Marathons to take part in different parts of the country. I firmly believe that the time has come to turn the marathon from “fun runs” to internationally recognized races.

It is time to ensure at least 3 of our Marathons, especially those in tourist towns such as Kilimanjaro and Zanzibar, are organized to international standards to attract international participants. In Ethiopia, for instance, every November, they contain races named “Great Ethiopian Run,” drawing close to 37000 participants, the majority being foreigners. We already have a Blueprint in Kili-Marathon that attracts close to 12,000 athletes annually; it is time to build into it by creating a memorable experience for the runners.

Strategically, the event can be turned from the current one-day event to a week-long festival that includes music festivals and park tours. On the other hand, Beach-based sports such as beach soccer and volleyball can also attract international attention if well organized and promoted. The Beach soccer competitions are comparatively cheaper in terms of investments, but the returns could be quite significant.

This tournament can be arranged parallel with the annual “Sauti za Busara” concert in Zanzibar to rip tourists from both the music and sports worlds. It is time to contemplating hosting CAF Beach Soccer Tournament. Medical tourism is the new norm. Over the past few years, Tanzania has transformed the health sector with Investment in specialized services, which has reduced the number of patients seeking medical treatment abroad.

Records show that Tanzania refers to 200 to 300 patients abroad annually, but the number has since dropped to less than 60. The health sector’s significant improvements could open doors to become a minor medical tourism destination for neighboring countries. Tanzania can borrow a leaf from India’s medical tourism industry, which is estimated to grow by 200% by 2021, hitting $9 billion.

India receives close to 240,000 foreign tourists annually on medical grounds. A significant percent is coming from African countries. With the improvement in Tanzania’s renowned medical establishments, it will be comparatively cheaper for people from most African countries to opt for Tanzania as a preferred medical tourism destination.

On several occasions, we have heard of significant improvements at the Jakaya Kikwete Cardiac Institute (JKCI) and Ocean Road Cancer Institutes, which can handle complicated cases referred abroad. The two giants also receive patients from neighboring countries such as the Democratic Republic of Congo (DRC), Comoro, Uganda, Kenya, Malawi, Rwanda, and Burundi.

The horizons can be broadened. Tourism is undoubtedly amongst the leading pillars of our economy in terms of employment and earnings. However, with the market dynamics and sizeable competition from the world over, we ought to be more creative and vigilant in increasing value for tourists to pick Tanzania from all the available alternatives. For comments, please email me : gsemunyu@epicpr.co.tz

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