XENOPHOBIC tensions in Gugulethu have been defused - at least for now - after business people from the area decided to start the Gugulethu Business Forum and seek talks with Somali traders next week.

The decision was made at a heated meeting of about 40 business people mediated by the Gugulethu Anti-Eviction Campaign.

The Anti-Eviction Campaign's Mncedisi Twalo, who also owns a pavement fruit stall in Gugulethu, told the business people that South Africa was a free market where anybody could do business.

But angry businessman "Boyce", who did not want to reveal his surname, said the country was a free market for South Africans only.

"Financially we can't breathe because there are no rules. I don't want this place to become like Somalia where people fight like hell," he said.

Business people said Somali shops were offering discount groceries, undercutting the profits of local businesses. They accused the big retailers of offering discounts to Somali-owned shops only.

But another businessman, who did not give his name, said big retailer Makro told him that discounts would be given to all business people.

Butcher Noluthando Koyana said: "Somali traders are a small problem compared to white businesses like Shoprite and Pick 'n Pay who will invade our communities and destroy local business when the Gugulethu Square Mall opens".

And grocery shop owner Michael Sonqishe said: "We cannot fight like cats and dogs with any black person who starts a shop here. When a white man comes we welcome him 'because he has the expertise'".

Angry business people were persuaded to drop their threats of violence against Somali spaza shops in Gugulethu.