Fin24

SA wants Walmart fund increased - report

2011-07-28 08:20

Johannesburg - The government wants Walmart to boost a fund for local suppliers to R500m from a planned R100m, Business Report newspaper said on Thursday.

South Africa approved Walmart's bid for a controlling stake in local retailer Massmart in May, but imposed conditions on the deal, including the creation of a R100m fund for the development of local suppliers.

The government now wants that fund increased to R500m, Business Report said, citing a government source.

"We believe the conditions should be tougher given the tremendous concerns that are created by this merger," the paper quoted the source as saying.

South Africa's service workers union and the government departments are currently appealing the decision by anti-trust regulators to let the deal go through.

Comments
  • texasman - 2011-07-28 09:13

    I thought this was a done deal...what a message this must sending out to potential foreign investors..like sTAY AWAY!! Incidentally, this was one of the issues Walmart rejected prior to signing the deal.

  • bvniekerk - 2011-07-28 09:15

    Gravy train running low on funds?

      amdisgusted - 2011-07-28 15:31

      'Robbing Hood' malema - emptied the coffers!

  • Koos - 2011-07-28 09:18

    SA or the anc??

  • kilo39 - 2011-07-28 09:24

    Walmart execs must have rocks in their heads, unless they need a 'loss leader' on their Balance Sheet.

  • Rapier - 2011-07-28 09:33

    This sort of requirement is concrete evidence of why the level of foreign direct investment has dropped to historic lows. Government's contradictory messages about foreign direct investment have played a role in the huge drop in inflows to South Africa. South Africa's foreign direct investment slump is a sign that the ANC government's unenthusiastic response to foreign investment is beginning to affect market perceptions.

  • Shorts1 - 2011-07-28 09:33

    Obviously looking to ensure that there is enough money in the pot to adequately cover the standard ANCadre corruption & bribery policy requirements.

  • Spade - 2011-07-28 09:38

    That should do wonders for international confidence in us! Perhaps the plan is for the "Local Suppliers Fund" to fund cadres, and R100m is just not enough anymore.

  • Nasdaq7 - 2011-07-28 09:39

    Well that is just fair.

  • Exoteric - 2011-07-28 09:56

    here we go again, extortion by the unions and government, lets see what we can steal from this deal, the money will disappear into a 'SETA like' fund never to be seen again.What is a 'supplier development fund', its really just another ANC account for organised theft...

      DirtySamurai - 2011-07-28 12:45

      They'll set up a management company for it with a politically connected CEO on a fat salary (think IDC, Attorney's Fidelity Fund, SETAs, PIC etc) and hire a bunch of future cadres on bloated packages sit around all day having meetings but accomplishing nothing. It'll help local suppliers in that there might be some biltong at their meetings but the Moet will be imported.

  • hmoosa - 2011-07-28 10:25

    What is amazing is that the deal was approved in the first place!!! With research proving Walmart to be a ruthless company we should of never allowed them into a country that already has many issues

      amdisgusted - 2011-07-28 15:29

      Scared of competition!

  • Andrew - 2011-07-28 11:38

    Unions are necessary to protect the well being of the work workers and create balance between the enhancement of profit and fair working conditions (from a company's perspective). However, in South Africa Unions are given too much power, which at first glance seems good for the worker but ultimately means that fewer investors (both foreign and local) are willing to participate in the economy which is extremely detrimental. This Walmart deal is a prime example of how easily the unions are able to manipulate government in SA and how external investors are left with doubts of investing in SA.

  • DirtySamurai - 2011-07-28 12:41

    "Come invest your money but dont get a good return and have your business run by the unions". Reminds me a bit of the current Board of Healthcare Funders who are wanting more competition in hospital sector but also capped prices. I just want a car that runs on air and a dog that cleans up its own messes.

  • Katt - 2011-07-28 14:51

    I for one welcome this foreign investor into the country. Their products are cheap. I am sick of being ripped off by local suppliers (not because they are bad people, but because they are forced to up their prices because of 'deals' and taxes and other gravy train feeder invoices...) . Why the hell would the government try to block a deal that at the exit point is good for us poorer people suffering due to people's greed (and the recession...)

  • Slingervel - 2011-07-28 15:00

    Walmart must just find ways to pull the plug on this deal! Not only is it going to cost them millions upfront, but they can be assured to have huge, huge problems down the line with Cosatu and the ANC Government. Shareholders of Walmart must seriously doubt getting into SA in the first place!

  • ChicagoGuy - 2011-07-28 20:23

    One would think that the social engineers AKA as the ANC government best be careful not to anger Congress as they could very well jeopardize the AGOA which has facilitated many exports from SA to the US duty free. Exports qualifying under AGOA was USD 1.8 Billion in 2006. Maybe someone should ask Patel and Davies if any jobs were produced or saved by the good graces of the US government. Also did they cost any jobs in the US? Just a bit of food (maybe hake) for thought.

  • yash - 2011-07-30 08:54

    Lets hope that there are some in our government who aren't convinced of driving out any and all foreign investment. if only we had a real government, and not this corrupt anc circus...

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