Rwanda formally announced that it entered the battle to host a Formula One race. The announcement was made by President Paul Kagame during the annual General Assembly of the Fédération Internationale de l'Automobile (FIA) that took place in Kigali last year. Kagame revealed in December 2024 that Rwanda officially submitted its bid to host the Formula One grand prix. “I am happy to formally announce that Rwanda is bidding to bring the thrill of racing back to Africa by hosting the F1 Grand Prix. A big thank you to [Domenicali] Stefano and the entire team at F1, for the good progress in our discussions so far,” the Head of State said during FIA’s annual prize-giving event. President Kagame has been seen on multiple occasions attending F1 races, including the Singapore and Qatar Grand Prix editions. He has been spotted with Domenicali Stefano on different occasions. Other officials, such as the former Rwanda Development Board (RDB) chief executive, Francis Gatare, has held discussions with F1’s Stefano at the Monaco Grand Prix, perhaps confirming the advanced nature of the negotiations that could see Rwanda host an F1 race. If Rwanda wins the bidding process, it could be the first time Africa will host an F1 race since 1993 when South Africa suspended its process to host the Kyalami Grand Prix. But Rwanda is not the only country in the race to host an African Grand Prix. Media reports have hinted at Morocco bidding to host F1. Morocco's last F1 race was the 1958 Casablanca Grand Prix, which was held at the Ain-Diab circuit. Although not officially confirmed, the city of Tangier is leading a bid to host a Grand Prix, which could mark a revival of motorsport in Morocco. ALSO READ: Kagame says Rwanda’s bid to host Formula 1 Grand Prix progressing well Following Rwanda’s announcement, South Africa, too, declared that it is bidding to host F1 again with the country’s Minister of Sports, Arts and Culture, Gayton Mckenzie, announcing the formation of the South African Formula 1 Bid Steering Committee, a 13-member group charged with bringing F1 back to the country for 2027. “Lewis Hamilton, we want to pay tribute to you and your activism. You introduced so many of us to Formula 1 and turned us into passionate fans today. You inspire us with who you are as a driver, a person and a tireless activist for what you believe in,” he said in December. Mckenzie added that, “You’ve given us the courage to speak up. You’ve given us the courage to say, let’s go for it. We are going to give you South Africa in return.” For starters, Formula 1 is the pinnacle of motorsport in the world. “The wealthiest individuals pay exorbitant amounts to watch it, the largest corporations vie for limited spots to sponsor it and team owners take on huge premiums to put their drivers behind the wheel,” Sid Mehta, a managing director at Rothschild & Co, an advisory firm, writes in Michigan Journal of Economics. The bidding process Despite all this, the bidding process to host an F1 race is a complex process that involves multiple parties, including the FIA, Formula 1, and potential host cities or countries. Potential host cities or countries express their interest in hosting a Formula One race to the FIA, our research shows. This can be done through formal channels or informal discussions with Formula 1 representatives. The FIA and Formula 1 assess the initial interest, considering factors such as the potential host's infrastructure, economic viability, political stability, and overall suitability for hosting a major sporting event. If the initial evaluation is positive, potential hosts are invited to submit formal bids. These bids typically include detailed proposals outlining the proposed race track or circuit, including its design, safety features, and capacity. The bids also include the proposed race weekend schedule and event format, financial commitments and guarantees, including fees to be paid to Formula 1, as well as plans for infrastructure development and improvements, such as transportation, accommodation, and security. The other key component of the bidding process is the marketing and promotional plans to attract fans and sponsors. Evaluation, selection The FIA and Formula 1 evaluate the submitted bids based on a variety of criteria, including the quality of the proposed circuit and its potential to deliver exciting racing, and the financial viability of the event and the host's ability to fulfill their commitments. They also assess the host's ability to attract large crowds and generate significant revenue, thecommitment to sustainability and environmental initiatives, and the overall vision for the event and its potential to enhance the Formula 1 brand. If a bid is selected, the FIA and Formula 1 enter into negotiations with the host to finalize the terms of the agreement. This includes discussions on the specific race date and time, the length of the contract, the distribution of revenue and expenses, and the specific obligations and responsibilities of both parties. Track construction If a new track is required, the host must undertake significant construction and development work to meet Formula 1’s strict standards, available literature indicates. This includes building the track itself, including grandstands, pit garages, and support facilities, upgrading infrastructure, such as roads, transportation, and accommodation, and implementing safety measures and security protocols. Designing and building a new track typically costs upwards of $270 million, with yearly maintenance fees averaging $18.5 million, according to one study in the Michigan Journal of Economics. This is Rwanda’s case. The country is currently building a new track in Bugesera, Nyamata District in the Eastern Province. The circuit was reportedly designed by former F1 driver Alexander Wurz. His company has been working on the project with the government and local representatives for more than a year. The new circuit, which will be just next to a new international airport that is currently being developed and is expected to be complete by 2027, has a fast and flowing layout that will run through the forests and around the lake. To host an F1 race, while it could be rewarding, it is a heavy undertaking. There are a couple of countries such as Singapore and the Las Vegas Grand Prix that offer a template. The Las Vegas Grand Prix generated close to $1.5 billion in overall economic impacts, according to a debriefing presented to the Clark County Commission last year. The county estimated visitor spending on the F1 event in late November 2023 amounted to $884 million. The average Grand Prix visitor spent four nights in Las Vegas and spent $4,100, or 3.6 times the typical visitor, excluding the price of a race ticket. The direct economic impact of the event, excluding land costs and out-of-market purchases, totaled $329 million. The race generated $77 million in tax revenues for state and local governments. The Singapore Grand Prix from 2008 to 2018 benefited local economies by bringing in 450,000 additional visitors who spent around $1.4 billion in the local economy. Yet, it is not all countries that successfully host F1 races. Countries like India, Malaysia, and Korea have had to suspend their Grand Prix editions over financial strains. The Indian and Korean Grand Prix are two of many historic examples which show how hard it is for track owners to gain profits with tickets being their sole revenue source. “The two countries hosted only a few Grand Prix and had to cancel future ones for multiple reasons, but large financial losses appeared as one of the main ones,” writes Siddharth Mehta. The Indian Grand Prix in 2013, its last year of operation, lost $24 million while the Korean Grand Prix lost $37 million in 2012, just one year before ending operation. “And although other tracks typically do not lose this much, they still typically do not even break even.” Rwanda’s competitive edge The country has been positioning itself as a leading destination for tourists in the region. Part of this strategy has been to deliberately invest in developing conference facilities and encouraging the private sector to build new hotels to accommodate the rising number of tourists, both for luxury and ordinary tourists. As a result, Rwanda has recorded a significant increase in hotel establishments. Just last week, a study by the National Institute of Statistics Rwanda (NISR) indicated that the number of hotel rooms increased to 21,232 by the end of last year from over 17,078 back in 2020. The number of hotels increased from 870, in 2020, to 1,189 currently, implying that the country has 4,154 new hotel rooms in 319 new hotels. There were 3,282 hotel rooms in 2008, an increase from 651 rooms in 2003. In September 2024, the Rwanda Chamber of Tourism, the apex body for all private-sector tourism establishments in Rwanda, announced a target to have 35,000 hotel rooms in the next five years, an increase from 10,000 rooms over the past five years. The government has also invested in marketing and branding activities through the Visit Rwanda, a campaign by the Rwanda Development Board (RDB). This campaign has initiated partnerships with soccer teams such as Arsenal, PSG, and Bayern Munich, all of which have arguably elevated Rwanda’s brand reputation internationally. Nelly Mukazayire, the Minister of Sports, believes the plan to bring F1 to Rwanda aligns well with Rwanda’s vision to become a global sports hub. “Hosting F1 would not only elevate the status of the country in the global community of sports, but it would also be an opportunity for job creation, attracting international investment, but also set a platform for sports community and motorsport in the region and in the continent,” she said during the FIA awarding ceremony. Rwanda has already established itself as a growing destination for international sporting events. The National Basketball Association’s (NBA) Basketball Africa League (BAL) has been found its home in the country. In 2023 Rwanda experienced a 59 per cent increase in the number of sports events hosted, totaling 27 from 17 in 2022. These events attracted 13,785 participants, according to RDB.
