The government remains concerned that the Walmart-Massmart merger will lead to job losses or will stifle job creation, the government’s director of communication, Jimmy Manyi, said at National Press Club’s briefing on Monday afternoon.
He addressed government’s controversial decision to appeal the Competition Tribunal’s approval of Walmart’s 51% stake in local retailer Massmart.
The tribunal approved Walmart’s $2.4-billion takeover of Massmart Holdings. But last week, Trade and Industry Minister Rob Davies, Agricultural Minister Tina Joemat-Pettersson and Economic Development Minister Ebrahim Patel appealed the ruling.
Manyi said that the government was bound by the Competition Act to protect the public in case mergers posed a threat to jobs.
“The government was doing what the law required it to do and was looking after the public interest.”
The government wanted consumers to benefit from cheap imports but this could not be at the expense of jobs, he added.
Manyi likened South Africa’s economy to that of a “teenager” competing with “veteran” developed countries, whose economies had “not been stifled by apartheid”.
He emphasised he was not trying to blame apartheid but was explaining the current environment surrounding of the Walmart-Massmart merger debate. Manyi added that protectionist policies in developed countries were far worse than in South Africa and was quick to state that the government was not opposed to foreign direct investment.
The government also wanted more clarity on how the R100-million set aside by Walmart for local suppliers would be spent. Manyi explained that more detail was needed on how individual suppliers or farmers would be affected and whether the money would be spent in the best possible way to stimulate local industry.
“This government does not want any assumptions. It is not clear how those things had been dealt with.”
Manyi reiterated that the government was not trying to stop the deal but was “jealously guarding jobs” and local industry.
He complained that government departments did not have the chance to raise all their concerns at the Competition Tribunal and were now trying to make sure all their fears were addressed.