The intervention by the South African government seeking conditions to Wal-Mart’s “large merger” with JSE-listed Massmart was not a generalised statement of the country’s opposition to foreign direct investment (FDI), Trade and Industry Minister Dr Rob Davies told foreign correspondents on Monday.

Rather, the Department of Trade and Industry (DTI) sought the conditions in line with the legislation that governs such corporate activity, with the Competition Act laying the basis for merger control where such a merger could have implications for employment and local industrial development.

Davies added that government would also apply its mind to the employment and industrial implications of greenfields FDI, as was currently the case regarding shale gas exploration and development by Shell and others in the Karoo.

South Africa has put in place a moratorium on the issuing of hydraulic fracturing, or fracking, licences to allow it time to understand the possible environmental, employment and industrial implications of unconventional gas mining.

Davies stressed that these interventions did not imply a closing of the country to foreign investors, highlighting the fact that South Africa was actually seeking to increase its FDI level. He noted that his performance contract, as well as those of a number of other economic cluster Ministers, places emphasis on the need to boost investment, domestic and foreign.

“Generous” tax incentives have been put in place to support greenfields and brownfields investment and government was also seeking to reduce the red tape associated with such development. Government would also “engage” to ensure that these did not have “negative consequences” for jobs, economic growth and development and the environment, Davies said.