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Gordhan: More certainty on FDI

Nov 14 2011 14:48 Sapa

Company Data

Massmart Holdings Ltd [JSE : MSM]

Last traded R159.70
Change R-0.49
% Change -0.31%
Cumulative volume 182,966
Market cap R34.51bn

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Johannesburg - There will be more certainty about foreign direct investment in South Africa within the next year, Finance Minister Pravin Gordhan said on Monday.

"Within the next year we'll have a very clear legal framework within which FDI (foreign direct investment) can operate," the minister told Business Unity SA's annual general meeting in Johannesburg.

This would "give foreign investors a clear and consistent picture within which to work".

Gordhan made his comment in the light of confusion created by the government's response to US giant Walmart's R16.5bn acquisition of a controlling stake in local retailer Massmart Holdings [JSE:MSM].

Although he did not want to comment specifically on the Walmart matter which is before the Competition Appeal Court, he said some of the issues raised by the deal were correct.

These included the government's wish to promote procurement and small businesses, and to prevent job losses.

The National Treasury has released a discussion document on guidelines for FDI, titled A review framework for cross-border direct investment into South Africa.

Within the next year to 18 months, a clear policy document on FDI would be available.

This would "clearly identify what we see as strategic industries where particular rules apply" and other industries in which government had no strategic interests.

In those areas where the government had strategic interests, there would be clear rules for investors, he said.

"Walmart takes place within that context", Gordhan said.

The Competition Appeal Court is considering whether to impose more stringent conditions on the Walmart-Massmart transaction, after an appeal by the departments of economic development, trade and industry, and agriculture, forestry, and fisheries.

The SA Commercial, Catering, and Allied Workers' Union filed a separate appeal against the approval of the takeover of Massmart on the grounds that the Competition Tribunal failed to take adequate consideration of the public interest.

The tribunal approved the deal in May subject to certain conditions.

 
 
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