The South African government is facing intense political backlash after changes to its Black Economic Empowerment (BEE) laws, potentially allowing Elon Musk’s Starlink to operate in the country with exemptions from existing Black ownership requirements.
- The South African government is facing criticism for proposed changes to Black Economic Empowerment (BEE) laws.
- The new laws may allow foreign companies, such as Starlink, to bypass Black ownership requirements through alternative contributions.
- Critics claim this move undermines South Africa’s existing empowerment policies aiming to correct historical injustices.
As reported by the Financial Times, South Africa’s Minister of Communications, Solly Malatsi revealed plans to allow telecom companies like Starlink to sidestep the 30% Black ownership law through ‘equity equivalence’ initiatives, such as local partnerships, job creation, or supporting small businesses, in lieu of equity stakes
The proposal follows public remarks by Musk that he has been locked out of South Africa’s telecom market because he is “not Black.“
However, the timing and framing of the legislation has sparked intense criticism from opposition parties and civil society, who accuse the government of tailoring laws to benefit a powerful foreign billionaire.
Criticism spreads over SA’s BEE amendment
Build One South Africa (BOSA), a prominent opposition party, has criticized the government’s decision as a “backdoor deal” with Musk, arguing it unfairly favors the billionaire’s interests over those of local businesses bound by BEE laws.
According to BOSA deputy leader Nobuntu Hlazo-Webster “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,”
BOSA spokesperson Roger Solomons also warned that the proposed exemption would allow Starlink to enter the market “under conditions favourable to them, not the country,“
He called the move “impulsive and reckless.”
Economic Freedom Fighters (EFF) leader Julius Malema echoed this sentiment, promising to oppose Starlink’s entry in Parliament.
“We will not be dictated to by business,” Malema said, accusing the government of prioritizing corporate interests over national policy.
Defense grows amid criticism
Meanwhile, the ruling African National Congress (ANC) has defended BEE as essential to reversing the effects of apartheid, while the Democratic Alliance (DA), the second-largest party and a key coalition partner, is suing the government over existing BEE laws.
DA MP James Lorimer called the proposed rules “a death knell for foreign investment”
“These ownership demands will crush what little appetite remains for investment in South African mining,” He said.
“The bill doubles down on failed transformation policies at a time when our economy needs growth.” He added.
The country’s President Cyril Ramaphosa has stood firm against dismantling BEE, attributing South Africa’s economic stagnation to concentrated ownership rather than empowerment policies.
He said: “It is the partial and exclusive ownership of the means of production in our country that is holding this economy from growing,“
The controversy is consequent of a major political shift: the ANC, weakened by poor 2024 election results driven by public frustration over crime, unemployment, and inflation, has entered into a 10-party coalition, the first time since the end of apartheid that it has lost its wide majority.
As Parliament debates the bill in the coming week, the government faces a balancing act; modernize economic policy to attract foreign innovation and investment or risk undermining the very affirmative action framework that has defined its post-apartheid vision.
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