South Africa’s arts and culture sector is often perceived as being on the periphery of economic discourse; however, the Cultural and Creative Industries (CCIs) play a crucial role in driving economic growth, job creation, social cohesion and national identity. For companies and nonprofits investing in this sector, it is vital to understand and measure the multiple layers of value the industry offers.
The South African Cultural Observatory (SACO), a national research centre and project of the South African Department of Sport, Arts and Culture (DSAC), plays a pivotal role in measuring and valuing the economic contribution of South Africa’s cultural and sports industries. SACO’s 2024 study revealed that, in 2021, the CCIs and sports collectively contributed R250 billion to South Africa’s GDP, accounting for over 4% of the total GDP.
The sector also created over one million cultural jobs and added more than R220 billion to household incomes, with a significant R41 million (19%) reaching lower-income households.
How SACO measures the size and economic contribution of the CCIs
SACO employs robust methodologies to quantify the often-intangible value of the arts. Its goal is to situate South Africa’s cultural information system within established global frameworks, especially UNESCO’s Framework for Cultural Statistics, while applying an African lens and perspective.
The challenge: Measuring social cohesion and cultural identity
Measuring social cohesion and cultural identity is challenging, especially as these abstract concepts are deeply rooted in South Africa’s complex sociopolitical and historical landscape. Traditional methods of measurement cannot capture the nuances of community dynamics and individual experiences, so SACO employs a combination of both qualitative and quantitative approaches to capture lived experiences and community dynamics post-apartheid.
SACO addresses this challenge through adaptive strategies that emphasise transparency, community engagement and collaboration. By sharing research across provinces, SACO helps uncover each community’s unique cultural landscape. This approach demonstrated that standardised frameworks fall short and context-driven methods are essential for understanding the true impact of cultural engagement.
Impact in action: SACO’s partnerships
SACO’s practical application of its methodologies is best seen through its partnerships with key organisations such as the following:
National Heritage Council: Preserving and empowering through heritage
Heritage projects are crucial for preserving cultural identities, strengthening national unity and promoting tourism. The National Heritage Council (NHC) plays a significant role by distributing funds and ensuring that community projects benefit. During the 2023/24 financial year, the NHC allocated over R52 million to 58 projects across all nine provinces through the Presidential Employment Stimulus Programme (PESP), which created employment opportunities. They also supported 32 public projects with R7 million in annual heritage funding and trained over 500 learners as heritage ambassadors.
In 2024, SACO reviewed the impact of NHC-funded heritage projects. The study included a systematic analysis of projects that received funding from 2015 to 2024. The following documents provided were analysed alongside surveys and key informant interviews:
- Application forms/templates
- Progress reports by grant recipients
- Close-out reports (for example, the close-out report on the PESP submitted by the NHC).
- Lists of approved projects per year from 2015 to 2024.
The study aimed to assess whether projects achieved their goals, met national needs and had a social and economic impact. The number of people employed on the funded projects, benefiting from them, or being trained, ranged from none to more than 100. Most jobs were full-time for the duration of the project; however, job retention after funding was a concern. The target audience, on the other hand, ranged from less than 100 to more than 1 000 000.
The main challenges were financial, including funding delays, insufficient funds and unexpected cost increases. Key impacts included job creation, increased community awareness of cultural heritage, information sharing, capacity skills development, empowerment of youth and women, networking and protection of indigenous knowledge systems. The report recommended better resource allocation, smarter funding decisions, greater community impact and improved implementation. The collaboration showed how rigorous M&E can lead to better policy and resource use in the heritage sector.
National Arts Festival: The pulse of a cultural ecosystem
SACO has a longstanding relationship with the National Arts Festival (NAF) in Makhanda. Although previous work focused on the festival’s local economic impact, the 2024 research report assessed the social, economic and cultural impact of the 2024 festival, while reflecting on its contribution to the broader South African cultural ecosystem over its 50-year history.
The festival generated over R57 million for Makhanda and R131 million for the Eastern Cape, despite a slight decline from previous years due to economic challenges. In 2024, the NAF sourced over R6 million from the Social Employment Fund, creating 1 604 direct jobs in addition to 247 work opportunities directly related to the festival.
Audience surveys revealed that the NAF consistently received high ratings for its offerings, maintaining its strong appeal even after the Covid-19 pandemic. The report’s recommendations aimed to enhance aspects such as the festival atmosphere and marketing to attract more diverse age groups, demonstrating how practical M&E insights can drive ongoing improvements and strategic adaptation.
Read more about supporting arts and culture for development:
Source: The original version of this article was published in the Trialogue Business in Society Handbook 2025 (28th edition).
