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Can Wal-Mart bring happy days to Africa? South Africa鈥檚 top union leaders don't think so, and they're ramping up pressure to make sure the Arkansas-based retail giant fails in its multibillion dollar bid to take over Africa's biggest general merchandise retailer.

Wal-Mart Stores Inc. announced Monday it placed a $4.25 billion offer to buy up the shares of South African retailer Massmart Holdings Ltd. as a way of entering South Africa's market. Wal-Mart executives called the deal 鈥渁 great opportunity."

Many economists also see Wal-Mart鈥檚 entry as a good sign for African consumers, and in particular South Africa鈥檚 growing black middle class.

鈥淵ou鈥檝e got a growing African class of consumers who can afford to buy more consumer goods,鈥� says Aly-Khan Satchu, an independent investments expert and market-watcher from Nairobi. 鈥淚 think this is going to be a win for Wal-Mart. It shows that corporate America remains nimble and it shows that they are starting to change the way they view Africa, no longer just as a source of commodities and raw materials, but as a market for consumers.鈥�

A 'compelling growth opportunity'

As the most developed country in sub-Saharan Africa, with a stable government and a steady growth rate of 7.5 percent over the past 16 years, South Africa is an attractive base for any company thinking of expanding into Africa, one of the fastest-growing economic regions in the world.

"South Africa presents a compelling growth opportunity for Walmart and offers a platform for growth and expansion in other African countries,鈥� regional head Andy Bond said in a (pdf) announcing the bid to buy Massmart, which owns 290 stores in 13 countries in Africa. 鈥淪outh Africa possesses attractive market dynamics, favorable demographic trends and a growing economy.鈥�

Wal-Mart is used to taking risks. In July 2006, the retail chain all of its 85 stores in Germany after its American model failed to take off with Germany鈥檚 quality-conscious consumers. Wal-Mart seems to be having a better run in India, with nearly by December 2009, and plans of further expansion. (Watch of Wal-Mart's domestic and international growth.)

But as a recent three-week-long public-sector strike shows, South Africa is not an easy market to enter. Nearly one-quarter of its 49 million citizens is unemployed; 40 percent live at or below the poverty line.

Labor unions 'alarmed'

The country鈥檚 largest trade union, COSATU, which makes up the largest supporter of South Africa鈥檚 current ruling left-leaning coalition, has already announced its opposition to Wal-Mart鈥檚 entry, and South Africa鈥檚 penchant for licenses and other bureaucratic paperwork could very well stall Wal-Mart鈥檚 grand opening for months, or more.

In a Tuesday, the Congress of South African Trades Unions (COSATU) said it was "alarmed" by the bid and "will oppose the setting up of any Walmart stores."

鈥淲al-Mart has a reputation for undermining labor standards, and we can expect some of that in South Africa,鈥� adds Tony Ehrenreich, secretary for COSATU in the Western Cape province. 鈥淲al-Mart has the reputation for being a low cost producer of goods, that leads to a dip in domestic South African goods. That will lead to closures in South Africa鈥檚 manufacturing sector. This is not good for South Africa.鈥�

South Africa does 鈥渉ave a very high level of interference,鈥� admits independent financial analyst Mr. Satchu, noting the power of South Africa鈥檚 trade unions. 鈥淚 don鈥檛 know how Wal-Mart is going to handle that. But it鈥檚 important for people to understand the necessity of not missing the boat鈥� on Africa鈥檚 growth.