The government chases away investments in South Africa

Remgro chief executive Jannie Durand said they prefer not to work with the government and that the Competition Commission makes deals nearly impossible.

Durand shared his opinion about their challenges with the government and its institutions during Remgro’s Capital Markets Day on Monday, 14 April 2025.

He said they were cautiously optimistic about the reforms happening in South Africa. However, the regulatory environment is a challenge.

“We are trying to manage these uncontrollable. We are engaging with the government and regulatory bodies, even when we disagree with them,” he said.

The Remgro CEO said their challenges with South Africa’s regulatory authorities influence their capital allocation.

“We prefer not to be in business with the government. Doing acquisitions in South Africa to achieve inorganic growth is very difficult,” he said.

“The regulatory environment makes it very difficult, and getting deals passed by the Competition Commission is becoming increasingly challenging.”

He said the onerous conditions of the Competition Commission and the government related to acquisitions make these deals unviable.

“That is a concern considering the investment-friendly climate that you should have in South Africa to create jobs,” he said.

The challenging regulatory environment and business-unfriendly policies in South Africa have been widely criticised.

For example, in 2021, the Competition Commission blocked Emerging Capital Partners from buying Burger King in South Africa due to its lack of black ownership.

Business Unity South Africa CEO Cas Coovadia and Business Unity South Africa (Busa) criticized the Competition Commission’s decision.

They highlighted that it would slow down investment and merger activity in South Africa and make it difficult for black investors to exit companies.

Coovadia raised concerns that the Competition Commission started to engage in issues related to black economic empowerment, which was the ambit of the BBBEE commissioner.

Vodacom and Maziv deal halted

Remgro’s dismay with the regulatory authorities is unsurprising considering the debacle related to the Vodacom-Maziv deal.

In November 2021, Vodacom entered into a deal to buy a stake in the fibre assets of Maziv, which owns Vumatel and Dark Fibre Africa (DFA).

Maziv is owned by CIVH, which is, in turn, majority-owned by Remgro, which has an effective 57% stake in the business.

The Independent Communications Authority of South Africa approved the deal in November 2022, a year after it was announced.

The Competition Commission, however, dragged its feet on this issue. In August 2023, it recommended to the Competition Tribunal to block the deal.

The Competition Tribunal then conducted weeks of public hearings, which concluded at the end of September 2024.

A month later, it blocked the transaction. It said Vodacom was South Africa’s biggest mobile network and Maziv was one of the biggest fibre infrastructure players, raising concerns.

The Competition Act stipulates that the Tribunal should provide the reasons for its decisions within 20 business days of announcing them. This did not happen.

It took around half a year for the Competition Tribunal to provide reasons, significantly delaying the legal battle around the deal.

The Competition Appeal Court is set to hear Remgro and Vodacom’s case against the ruling on 22 to 24 July 2025.

This means a final ruling on the deal would only occur around four years after Vodacom and Remgro initially signed the agreement.

So much time has elapsed since November 2021 that the deal would have to be renegotiated, as Maziv is a very different company than it was four years ago.

As Durand mentioned, a four-year regulatory process makes it unattractive for companies like Remgro to make acquisitions in South Africa.