(Press Release) The South African Government has spent R4.1 million in challenging the Walmart-Massmart merger at the Competition Tribunal. This was revealed today in a reply to a Democratic Alliance (DA) parliamentary question by the Minister of Economic Development, Ebrahim Patel. These costs have been split equally between the Department of Economic Development, the Department of Trade and Industry and the Department of Agriculture, Forestry and Fisheries.

Last year, Minister Patel, together with the Ministers of Agriculture, Forestry and Fisheries and Trade and Industry, Tina Joemat-Pettersson and Rob Davies, launched an application to appeal the approval of the Walmart-Massmart merger.

This appeal was unwarranted.

Walmart’s entry into the South African market is a positive development. It amounts to R16.5 billion in foreign direct investment and Walmart projects that 15 000 jobs will be created in the Walmart-Massmart operation in South Africa.

Walmart has furthermore indicated that it plans to significantly increase the number of Massmart retail outlets in South Africa and to use its activities in South Africa as a base to expand into the rest of the African continent. This creates further growth potential as South African producers would be well-placed to stock Walmart’s stores in Africa.

The government’s appeal against the investment was therefore unfathomable.

The initial decision by the Competition Commission also attached conditions to the Walmart-Massmart merger. These conditions, which included a requirement for Walmart to follow all South African labour regulations and to set up a fund to support local South African producers, were appropriate and sufficient.

Minister Patel’s desire to extract more concessions from Walmart by appealing the initial decision was little more than an irresponsible manipulation of the competition authorities to further his own agenda. And today’s reply indicates that it was a costly miscalculation.

Ministers Patel, Davies and Joemat-Pettersson should rather focus on creating an enabling environment for job creation and economic growth. Attracting investment and creating opportunities for South Africans to enter into gainful employment is the only sustainable way to root out poverty and improve the lives of South Africa’s people on a sustainable basis.

Wasting millions on appealing against foreign investment is counterproductive.

Kenneth Mubu, Shadow Deputy Minister of Economic Development

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