South Africa’s government has come under mounting criticism following a legislative proposal that could potentially exempt international telecommunications companies—most notably Elon Musk’s Starlink—from some of the country’s Black Economic Empowerment (BEE) ownership requirements.
The proposed legal adjustments, published by the Ministry of Communications and Digital Technologies under Minister Solly Malatsi, suggest replacing mandatory 30 per cent Black ownership with broader “equity equivalence programmes.” These could include initiatives such as supporting local suppliers, job creation, and financing small enterprises. The revision appears tailored to address conditions laid out by Musk, who has publicly stated that Starlink would not comply with BEE laws, citing barriers to entry as the company is not Black-owned.
Malatsi’s plan has triggered significant political opposition. The Build One South Africa (Bosa) party formally approached the Speaker of Parliament, demanding transparency and a public record of decision, alleging a “backroom deal” had been made to accommodate Starlink. “The message being sent is that if you are a powerful foreign billionaire, you can sidestep South Africa’s laws, while our local businesses are forced to jump through hoops,” said Bosa’s deputy leader, Nobuntu Hlazo-Webster. Party spokesperson Roger Solomons described the proposal as “impulsive” and accused the government of undermining long-standing economic equity goals for short-term foreign investment gains.
Julius Malema, leader of the Economic Freedom Fighters (EFF), a prominent opposition party, has vowed to block the measure in Parliament, stating that his party “will not be dictated to by business interests,” especially not foreign ones.
The policy shift, if enacted, could mark a significant departure from the African National Congress’s (ANC) long-held stance on economic redress, anchored in the post-apartheid BEE framework. That framework mandates specific racial ownership structures, particularly within strategic industries such as mining and telecommunications, in an effort to reverse decades of economic exclusion experienced by the Black majority under apartheid.
In contrast, Musk’s criticism of South Africa’s empowerment policies underscores ongoing tensions between attracting foreign investment and upholding transformative economic justice. Musk remarked publicly that he could not “get a licence to operate in South Africa because I am not Black.” Starlink’s satellite internet service, offered by SpaceX, has rapidly expanded in underserved areas globally and is seen as a potential game-changer for rural connectivity in South Africa.
Several foreign companies, including Vodacom—Vodafone’s South African unit—have complied with BEE by divesting equity to Black investors. The proposed alternative of equity equivalence is widely seen as a concession to facilitate Starlink’s entry, raising questions about regulatory consistency and fairness.
Beyond telecommunications, the proposed relaxation has reignited debates in the mining sector. The Minerals Council South Africa has advocated for similar exemptions for early-stage exploration firms. Allan Seccombe, its communications director, emphasised the speculative nature of prospecting and argued that imposing rigid ownership quotas hampers much-needed investment. “Every cent that they raise should ideally go towards drilling out or finding a resource,” he stated.
The Democratic Alliance (DA), South Africa’s official opposition, is currently contesting BEE laws in court, claiming they violate constitutional principles. DA MP James Lorimer warned that provisions in the new mining bill, which seeks to codify a 30 per cent Black ownership requirement, would severely damage the investment climate. “The bill seeks to double down on racial transformation and brings back a legion of bad ideas,” he asserted.
President Cyril Ramaphosa has remained resolute in defending BEE as essential to structural reform. In a recent parliamentary session, he responded to critics by stating: “It is the partial and exclusive ownership of the means of production in our country that is holding this economy from growing.”
South Africa’s political landscape has been redefined since the 2024 general election, where the ANC lost its parliamentary majority for the first time since the end of apartheid. It now governs in a 10-party coalition amid growing public dissatisfaction over high unemployment, crime, and a cost-of-living crisis.
While the revised legislation is still under discussion, its implications may reverberate beyond telecommunications, setting a precedent for regulatory accommodation in sectors deemed strategically vital. Observers warn that while liberalisation could stimulate foreign interest, it may also erode the foundational goals of South Africa’s post-apartheid economic restructuring if not applied transparently and equitably.
