Elon Musk’s Starlink is poised to make a significant investment in South Africa, with plans to spend 2 billion Rand ($113 million) to expand broadband access in the Southern African Development Community region. However, the company’s efforts have been hindered by the country’s Broad-Based Black Economic Empowerment law (B-BBEE), which requires licensed telecom companies to have 30% ownership by Black South Africans or other historically disadvantaged groups.
Musk, who was born in Pretoria, has had a complicated relationship with his former home country. In the past, he has accused the South African government of failing to prevent what he termed a “genocide” against white farmers, an issue that was later taken up by former US President Donald Trump in a meeting with South African President Cyril Ramaphosa. Musk has also publicly criticized the B-BBEE, calling it “racially discriminatory” and stating that Starlink is not allowed to operate in South Africa because he is not black.
In an effort to circumvent the B-BBEE, Communications Minister Solly Malatsi proposed an amendment to the law, allowing companies to forego shared ownership in favor of Equity Equivalent Investment Programmes (EEIP). This workaround would enable Starlink to invest in local skills, infrastructure, and digital inclusion, including a 500 million Rand ($28 million) investment in free high-speed internet for 5,000 rural schools.
However, the proposed amendment has been met with resistance from the opposition and members of the public, who are concerned that a deal with Musk would undermine efforts to promote economic participation by Black South Africans after apartheid. “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 Nobuntu Hlazo-Webster, deputy leader of the opposition party Build One South Africa.
Malatsi has dismissed claims that the EEIP gives privileged treatment to Musk and Starlink, but the issue remains contentious. With the B-BBEE’s historical significance and the potential for the new amendment to be challenged in court, the process of expanding Starlink’s operations in South Africa could take upwards of two years. As the situation unfolds, it remains to be seen whether Musk’s company will be able to navigate the complex regulatory landscape and bring its broadband services to the region.
