’Black Empowerment’ law stalls Elon Musk’s $113 million investment in SA
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Elon Musk’s Starlink faces delays in South Africa due to Black ownership laws and political debate.
ELON MUSK’S STARLINK FACES LEGAL ROADBLOCK IN SOUTH AFRICA
STARLINK PLANS MAJOR INVESTMENT IN AFRICA
Elon Musk’s satellite company, Starlink, has announced plans to invest 2 billion Rand (about $113 million) to expand broadband access across the Southern African Development Community (SADC). The project aims to boost digital connectivity, especially in underserved rural areas.
B-BBEE LAW HALTS PROGRESS
Despite the ambitious plans, the investment has been delayed due to South Africa’s Broad-Based Black Economic Empowerment (B-BBEE) law. This legislation mandates that telecom companies operating in South Africa must have at least 30% Black ownership to receive operating licenses.
THE POLITICAL AND PERSONAL TENSIONS
Musk, originally from Pretoria, has a complicated relationship with his country of birth. His criticism of South Africa’s handling of violence against white farmers led to international political controversy. The matter was even discussed between U.S. President Donald Trump and South African President Cyril Ramaphosa during a White House meeting on May 23rd.
MUSK CRITICIZES RACIAL REQUIREMENT
Musk has publicly voiced his opposition to the B-BBEE law, calling it racially discriminatory. In March, he tweeted on X (formerly Twitter): “Starlink is not allowed to operate in South Africa, because I’m not black,” a post that sparked widespread debate and media attention.
GOVERNMENT PROPOSES WORKAROUND
In response to the controversy, South Africa’s Communications Minister Solly Malatsi proposed a legal amendment that would allow companies to bypass the 30% ownership requirement by participating in Equity Equivalent Investment Programmes (EEIP). This would enable Starlink to move forward without violating the existing law.
A PROMISE OF SOCIAL INVESTMENT
As part of the EEIP, Starlink has committed to investing 500 million Rand (approximately $28 million) to provide high-speed internet to 5,000 rural schools. The initiative is designed to enhance digital inclusion, local skills development, and technology infrastructure.
OPPOSITION RAISES CONCERNS
Despite the proposed amendment, many within South Africa are pushing back. Critics argue that allowing Musk to bypass ownership rules sends a damaging message. “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.
MINISTER DEFENDS THE POLICY SHIFT
Solly Malatsi responded to critics by insisting that the amendment does not offer special treatment to Musk or Starlink. He argued that EEIP is a legal and inclusive option for foreign companies seeking to make meaningful contributions without compromising the essence of B-BBEE.
LEGAL CHALLENGES COULD DELAY EXPANSION
Although the amendment offers hope for Starlink’s operations in South Africa, legal and legislative hurdles remain. The historical significance of B-BBEE means that any changes to the law could face court challenges from civil society or opposing political parties.
EXPANSION COULD TAKE YEARS
Even if the amendment passes, experts warn that it could take up to two years before Starlink is officially allowed to operate in the country. The long legislative process and potential appeals could push the timeline further, making the future of Starlink’s South African ambitions uncertain.
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