Communications and Digital Technologies Minister Solly Malatsi has rejected criticism of his newly issued policy directive that relaxes certain Black Economic Empowerment (BEE) requirements for foreign investors in the ICT sector, saying the backlash is driven by political motives rather than policy substance.
The directive, published last week, introduces an alternative investment pathway for international technology companies seeking to operate in South Africa. It allows foreign investors to meet empowerment obligations through equity-equivalent investment programmes instead of the traditional requirement to sell a 30% ownership stake to local partners.
Malatsi said the directive remains fully aligned with South Africa’s existing economic empowerment framework, including the Broad-Based Black Economic Empowerment (B-BBEE) Act and the ICT sector codes.
“The opposition to the policy directive is clearly rooted in political expediency and ignores the fact that it explicitly requires full alignment with the country’s empowerment legislation,” Malatsi said.
The policy has sparked opposition across the political spectrum. Parties including the Economic Freedom Fighters (EFF) have criticised the directive, accusing the minister of using executive authority to circumvent South African laws to accommodate foreign companies such as Elon Musk’s satellite internet provider, Starlink.
The MK Party has also raised concerns, arguing that the directive sidelines Parliament’s role in shaping policy and sets a concerning precedent for executive overreach.
Malatsi has further faced internal resistance within his own ministry, with Deputy Minister Mondli Gungubele reportedly expressing reservations about the policy shift.
Despite the criticism, Malatsi maintains that the directive is in the public interest and reflects the views of stakeholders. He said public submissions on the policy were overwhelmingly supportive and emphasised that the Independent Communications Authority of South Africa (ICASA) has been asked to consider the directive within its regulatory processes.
The minister said the policy aims to attract much-needed foreign investment into the ICT sector while ensuring that transformation objectives remain intact, adding that the directive does not exempt companies from empowerment requirements but rather broadens the mechanisms through which compliance can be achieved.