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Walmart R100m fund not enough - state

Aug 02 2011 10:23 Reuters

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Johannesburg- The government said on Tuesday that Walmart's planned R100m fund to develop local suppliers is not enough to offset the impact of imports on the local economy.

Walmart recently won approval from South Africa's competition regulators to take a control of local retailer Massmart Holdings [JSE:MSM]. As part of that deal, it has agreed to the fund, as well as other conditions.

"A R100m supplier development fund could pale into insignificance given the likely impact of substantial shift to imports by the merged entity," the departments of economic development, trade and industry and agriculture said in a joint statement.

The government wants Walmart to increase the fund to R500m, Business Report newspaper said last week, citing a government source.

Walmart and Massmart have said the current appeals will have no impact their on-going implementation of the transaction.

The deal has been seen as a test for foreign investment in Africa's biggest economy, which is home to both the continent's most developed economy and some of its most militant labour unions.

 
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